Blockchain technology has been described as a “trustless” system. That term can be confusing and even intimidating to people who might be on the fence about using the tech. After all, how can you make sure that your money is going to the right people if the tool is not based on trust? Furthermore, how can a “trustless” technology build trust in business?
Basically, it comes down to the concept of “distributed trust.”
We’ve talked about the growing use of blockchain by start-ups, and one real-world application some of them are putting forward is the use of “smart contracts.” To reiterate, these smart contracts ensure that both parties involved in an agreement fulfill said agreement’s terms, whether it be about business or a personal transaction. In the case of smart contracts, the need for an intermediary (a bank, a lawyer, etc.) is eliminated.
These intermediaries operate on a system of trust because they are centralized. This essentially means that you trust a bank to wire your money to a receiver, and vice-versa. This is where blockchain technology offers an alternative. It is a decentralized network, which means that there is no single point of authority, unlike in financial institutions. It is not “trustless” as we might typically define the word in a vacuum, but it is in the sense that it’s based on a system of distributed trust. It requires a consensus or the agreement of the majority (in this case, of nodes comprising the blockchain).
To illustrate how blockchain can potentially build trust in different industries, here are three more real-world applications of blockchain technology:
In this modern world, data continues to prove itself as one of the most valuable assets. This is why cybercriminals hack networks and steal precious information from which they can profit. They can steal identities from real people, for example, and sell them on to the next buyer; they can pick up credit card information, and commit fraud; they can even gather personal information and use it to blackmail victims.
Tech giants like IBM have found a logical solution in blockchain technology. And again, the idea goes back to the technology’s decentralized nature. Basically, there’s no single point of failure that hackers can exploit to steal information from – and they can’t make a change to something in the system without the consensus of the majority, which they can’t get. Beyond this, the blockchain also doesn’t require passwords (which have proven to be weak measures of cybersecurity). Instead, it uses a specific SSL certificate – a digital certificate that encrypts data so that it’s virtually impossible to exploit.
There’s a major lack of trust in the gambling industry. In sports betting, for instance, there’s a need to review betting sites that are licensed and legal before signing to place any wager. And while there are fortunately a lot of sites that are properly regulated and secured now, this need arises from a history of players not getting their winnings as expected, or falling prey to other mishaps (whether careless or nefarious). Blockchain can further relegate these concerns to the past, essentially by keeping a permanent record of all agreed-upon transactions. This means a bettor can’t be duped, a bookmaker is automatically held accountable, and payouts occur just as they ought to. Additionally, blockchain inherently facilitates anonymous transactions, which should eliminate any worries people might have about being singled out or treated unfairly.
3. Sexual Harassment In The Workplace
There’s an ongoing problem with offices being unable to protect their employees from sexual harassment. And while we can be frustrated to no end that this isn’t a simple problem to solve, it has unfortunately proven to be anything but. One answer to the issue, however, is the program Vault, a tool that uses blockchain to track and report workplace misconduct anonymously. Since blockchain is tamper-proof, it eliminates the risk that identities or confidential details relating to relevant cases will be revealed. There are also timestamps that ensure better record-keeping of reported incidents. Now, this will by no means eliminate issues of harassment in workplaces – but having this kind of technology in place may just deter some offenders and hold others accountable.