The world around us is getting digitized further every day. Due to this digitization, information of any kind is easily accessible. But certain sensitive data, like monetary and business transactions and exchange of assets, cannot depend on intangible trust, they need a solid foundation on which trust can be built upon. A trust that is based on facts and figures. Bringing in solicitors and intermediaries to assist in verifying documents and data to build an essential attribute of trust was the norm up till now.
But this norm is being disrupted!
In our previous article, “Blockchain: Building Trust In Digital And Global Economy – An Introduction” we have attempted to discuss albeit superficially the new burgeoning trust economy. It is moving away from traditional trust instruments and centralized authority, towards trust that is built based on word-of-mouth reviews by peers. Putting the faith back in humanity, with the notion that positive remarks by peers that show up under a person, allows us to ‘trust’ that person.
Egging the trust economy further is the disruptive technology of blockchain.
Blockchain transfers the authority from a central body to everyone in the community, the network. It affords transparency in data storage and exchange within the network. Ensures that validated data recorded after encryption is tamper-proof and any further edits or modification to the data are created as a new data block (changes are authorized through consensus) tracing back to the previous, thus establishing data provenance.
In the trust economy, the identity of individuals or a company, vis-à-vis their financial and professional histories, tax information, consumer preferences, medical records – those that help to build reputation can be stored safely and managed efficiently in blockchain through;
- Storing digital records
- Exchange digital assets without friction
- Execute smart contracts
Store Digital Records
Society at large has a central authority (the government, hospitals, banks and regulatory bodies) to record everything of importance – a ledger recording of events of the individuals. Like births, deaths, marriages; buying and selling of goods; transfer of property deeds; loans; election results; legal judgments and anything else that has happened between two individuals of the society.
These records are the identity that marks the individual’s presence in society.
Now, all these vital data or the digital info of physical assets can be recorded on the blockchain. Utilizing distributed programming and advanced cryptology for encryption, blockchain can offer a secure, transparent, immutable registry of identities – the truth of individuals. It is even better than usual public ledger, as it is resistant to manipulation.
An individual and not any 3rd party can manage their own digital identity. They will be able to create a digital representation of themselves that can be managed and shared across corporate and organizational boundaries.
They could store digital formats of their traditional identities – driver’s license, birth certificate, passport details, voter records and other ID’s.
They could store comprehensive medical records and choose to selectively share it with hospitals, clinics and insurance agencies for better interoperability.
Property ownership details and exchange of assets like vehicles and property can be stored on the blockchain.
Even financial documents like investments details, bank accounts, tax filing, income statement etc can be stored and managed.
By creating their own repository of important and valuable data, individuals will enjoy far more control on the accessibility and management of digital identity. This will curb identity thefts and misuse of records, which goes unnoticed and unknown to the individual in today’s centralized mode of storage of identity data.
Exchange digital assets without friction
Be it property ownership exchange or payments, in the current scenario, it is impossible to execute these transactions without a 3rd party involvement. By storing digital identities on Blockchain, trusted digital reputations are embedded to the individual’s interaction within the network. With immutable trust in place executing such transactions can happen peer-to-peer, in real-time without much operational time loss.
One of the foremost use cases of blockchain was cross-border payments. Many banks and such conglomerates are experimenting with ‘blockchain-as-a-service’ option to offer seamless and quick asset exchanges.
Execute smart contracts
Apart from a distributed ledger system to record and share valuable data, another formidable tool that blockchain offers is smart contracts. To make seamless and quick transactional exchanges a reality, a contract must be executed to transfer the ownership of assets or to receive payments.
Smart contracts are a self-executing computer program that can be designed within a blockchain network to execute itself when pre-existing conditions are met.
With smart contracts, Blockchain extends from being a simple record-keeping system to implementing the terms of multi party agreements automatically.
Blockchain’s three aspects make it an integral part of building a resilient trust economy.
EMURGO Academy offers blockchain certification courses by Blockchain practitioners themselves. We are a Global Blockchain Learning Solutions entity of EMURGO Global established in Jan 2019 to focus on incubation, training and evangelizing Blockchain to foster deep fundamental understanding of blockchain technology and thus establish an education program to drive practical usage of blockchain technology around the globe.
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