Practical applications of the blockchain as a database and as a platform, the detailed explanation of both categories as well as their benefits
Finrazor guide dedicated to blockchain is continued by an overview of the blockchain technology and how it can be used considering two main application areas — database and platform.
Blockchains brought about a new way of recording and storing information. While their applications are countless, there are two major categories of their use cases: as a database and as a platform.
As a database
As a database, blockchain presents a new approach to identity. Unlike traditional databases, blockchains do not require permissions associated with accounts. Instead, blockchains use a much more sophisticated, yet simple in its principle, technology of cryptographic keys. If you have the key, you own the asset. You do not need any kind of authorization. With blockchains, we can create systems of digital identities without sharing little if any personal information.
Blockchains can change how we establish ownership of an asset by introducing a concept of smart assets. Blockchains will allow us to attach a digital token to a physical real-world object, such as your car or house. This technology can be used to trace supply chains, to secure rights to intellectual properties, and to detect frauds.
As a shared database, blockchains can improve communication and interaction between organizations, such as banks, international companies, and even governments. Blockchains will help two parties to share information without the involvement of a third-party mediator. The parties rely on technology, and the technology has no bias.
Distributed ledger technologies (DLT) can also revolutionize accounting and audit trails as they offer an automated way of recording data. DLT-based systems eliminate human factor by keeping the true history of records. This can be put to use in healthcare, finance, and business to fight fraud and corruption.
As a platform
Today in the age of highly advanced technologies we still use paper contracts to make important agreements and transactions. But this can change with the introduction of smart-contract platforms. Powered by blockchains, smart-contract systems can fully automate the way we deal business with others. With their help, we will be able to establish strong digital relationships.
Smart-contract platforms offer us a means of expressing business logic in code. This ensures that contracts are not subject to subjective interpretation and reduce the surface for loopholes and fraud.
Realized to their full potential, smart-contract systems will grow into decentralized autonomous organizations. This may sound futuristic but there are many ideas being proposed about automating structural departments or even entire governments. Distributed control over information and decentralized consensus systems have the potential to bring people closer to an absolutely democratic governance.