Blockchain: Infinite Possibilities in the Future

You may have heard of Bitcoin, or perhaps a network wallet technology called blockchain; but you may not know that blockchain will not only take away business from banks, stock brokers, and credit card companies, but may even change all the transactions we currently use.

This will be a financial revolution and will completely shake up the trading habits of the entire business market.

How Blockchain works

One of the things that makes Blockchain so cool is that it has almost no transaction costs, and it’s a simple and clever way to automatically and securely transfer information from point A to point B. It works like this: The party that initiates the transaction creates a block of information, which is then verified by thousands or even millions of computers on the network.

After verification, the block will be added to a link on the network. This action will not only create a record, but also a history of changes to this record. Therefore, if someone tampers with a block, it is equivalent to changing millions of other records on the link. It is almost impossible to tamper with a specific record without affecting other information.

Because of this feature, Bitcoin uses this mechanism to ensure the security of money transactions; but in fact, in addition to Bitcoin, the same model can be applied to many other things.

Let’s take buying train tickets as an example. When we buy tickets through apps or websites, the credit card company will handle the payment process and charge a handling fee. However, if the railway company adopts the blockchain mechanism, it can not only save the fees paid to the credit card company, but also move the entire ticket purchasing system to the blockchain.

In this case, the two parties to the transaction are the railway company and the passenger, and a ticket is a block of information that is added to the ticket blockchain when the transaction occurs. If the passenger's monetary transaction to buy a ticket is carried out through the blockchain, then this ticket is a unique, individually verifiable, and difficult to forge record, just like Bitcoin.

And the resulting link of tickets could become a transaction history of a route or even the entire rail network, including every ticket sold and every journey taken.

But the point is, blockchain is free; not only can it transfer or store money, it can even replace all business models that rely on "processing and charging fees", or any existing methods of transferring money between two parties.

Here is another example: Fiverr, which provides online transaction intermediary services, makes a profit by charging transaction fees; but if blockchain is used, such services can be obtained for free, and Fiverr will find it difficult to survive. By the same token, other service providers such as auction websites or trading markets will be in danger.

Disrupting an already disrupted industry

Even the more recent rise of Uber or Airbnb could be threatened by blockchain; simply by encoding and sending the transaction information for ordering a ride or booking a room, you can use this secure way to disrupt these new models that are just beginning to challenge the traditional economy.

In other words, this new model will not only eliminate middlemen who make money from commissions, but will also eliminate platforms that operate by matching transactions.

Although transactions conducted through the blockchain are fee-free, service providers can still charge, for example, $0.01 for each video played or each time a reader reads an article. If we can pay this little bit every time we read a good article on Facebook or other apps, why bother paying for a full year's subscription?

Importantly, because blockchain has no transaction costs, no matter how you charge money, you don’t need to worry about the fees charged by third-party service providers eroding your profits. For example, although we all know that charging only 0.01 yuan to read an article is not a big deal for readers and can add up to a lot, this approach is impossible given the current online financial service fees.

Music Industry

Therefore, with the emergence of blockchain, which does not require record companies or intermediaries such as Apple or Spotify, musicians may have new profit opportunities; and the songs purchased by users can also be encoded and become part of the blockchain, making this system a cloud archive of songs that have been sold.

Furthermore, since the fees can be very small, it doesn’t matter whether it is “subscription” or “streaming”.

E-book industry

By the same token, e-books are also an industry suitable for blockchain; instead of letting Amazon take a profit and then having credit card companies take a little more, it is better to put the encoded book files into the chain. As long as the reader sends the fee to the author, the author can immediately unlock the book and receive every penny the reader uses to buy the book, rather than just a small royalty.

In this way, we no longer need a marketplace like Amazon. All we need is a new book introduction website like Goodreads or even the author's own website. If there is book review information or other external reports about the book, it can be added to the book's coded information, which will be even more perfect.

Financial Management

In the field of financial management, the application advantages of blockchain will be more obvious and the speed of transformation will be faster; including stock trading, loans, and insurance business forms may all change due to the emergence of blockchain.

Once this secure and fee-free transaction model becomes popular, traditional bank accounts and account-related services provided by banks may disappear; existing financial institutions may collapse or have to undergo a complete transformation.

In the past, the basis for the existence of financial institutions was to "take a small part of your wealth, but provide mechanisms and opportunities to promote transactions", but in the future, financial professionals will be closer to the role of "advisors" rather than "administrators". In the future, securities traders may no longer be able to earn commissions, and the behavior of profiting from the bid-ask spread will also disappear.

To put it more seriously, blockchain technology may even bring down Google. Most of Google's revenue comes from advertising, but if there were no "transaction fees" in the world, no one would need this centrally controlled advertising model; blockchains that contain text and images for advertising purposes (such as the e-book ads and purchase mechanisms mentioned above) could do all the functions of Google AdWords now, and Google would not charge for them.

That is to say, both the website owner and the reader who clicks on the advertisement can pocket the profits generated in the process. If other search engines can take advantage of this trend and profit from it, it may be the beginning of Google's decline.

e-mail

Blockchain could also be the death knell for email, which is already under threat from instant messaging apps like Line and WeChat, and is being threatened by Facebook Messenger and WhatsApp; compared to these tools, email is limited to one-to-one communication.

In the blockchain system, the information exchanged will be verified, encoded, executed, and finally become a record stored in a distributed network that does not belong to anyone. "Email" delivered through blockchain will be safer and can even solve the problem of spam. If the cost of sending emails is extremely low, perhaps we will be willing to pay some service fees for higher security.

For spammers, sending millions of emails to such a secure system would probably be a non-economical move.

Medical records

Another suitable application is in medical records; the blockchain mechanism can not only be used to pay doctors, but also to store personal medical records, as long as the data is unlocked during the consultation.

In this way, no matter where in the world you seek medical treatment, you can carry your complete personal medical records, physiological characteristic data, and even the complete DNA coding sequence in a secure blockchain record without having to rely on data centers such as insurance companies or Apple Health.

educate

Education is the next area where blockchain may be applied. For many people, school is just a place where they use money (their own money or taxpayers' money) to buy a diploma. In other words, it is also a transaction. Since it is a transaction, of course blockchain can be used and academic qualifications and grades can be recorded.

The Potential of Blockchain

If all of the above use cases are combined, everyone will have a complete, unique, permanent record of every transaction in their life. Blockchain may not replace all banking or transaction processing services at once, but it may replace ID cards, passports, fingerprints, and other biometric features. Because a blockchain record will have millions of copies on the network, it is difficult to change it; even if you try to change a bit in the data, you will be caught immediately.

Indeed, even the Bitcoin mechanism has been hacked, but blockchain has never been; so to be honest, I don’t think Bitcoin will be the future trend, but it can be said to be one of the stops in the development of blockchain. Although blockchain cannot be free of hacking, it has its own security mechanism, so there should be more room for development in the future.

Generally speaking, trying to log into a system under a false name is one of the most common methods used by hackers; but in the blockchain system, the login action is also a "transaction behavior." If someone wants to log into a system that has adopted blockchain under a false name, it is equivalent to trying to change the "login data chain" logged in on millions of computers, so there is almost no possibility of success. Under this premise, technologies such as fingerprint or pupil scanning are not so necessary.

To build such a system, it may be necessary to significantly improve the computing power of computer systems, but I think this is not a big problem because quantum computing technology can be used. In the future, there will be some dedicated computer systems that can manage blockchain at a speed that is unimaginable now.

In my imagination, there are few industries, processes, or technologies that will not be affected by the concept of blockchain, and for this reason, I think it is the most interesting and disruptive invention since the advent of the Internet. It has the ability to erode the authority of the government, but it may also become a weapon for the administrative system.

Because every interaction between a citizen and the government, from issuing a birth certificate to transferring real estate ownership, can technically be considered a transaction; and these transactions can be simplified and protected through the blockchain mechanism.

Infinite possibilities in the future

Since each transaction information is linked to its own change history and verified by millions of computers, the credit problem from the existing transaction model can be solved. I think even its inventor did not expect that blockchain would have such a wide range of applications in the future.

Although blockchain technology is not complicated, it has the potential to prevent many corruption and crimes, and even make government supervision useless. Even non-anonymous personal information will be safer than current documents such as passports; it is also difficult for people with ulterior motives to tamper with money data, because in the blockchain system, every copper coin and every banknote you have ever held will have a historical record, and the record will always follow you.

In the short term, blockchain will definitely have an impact on the financial industry, and then gradually replace the business model of charging transaction fees for profit. However, since it can be used to encrypt any transaction, it has the potential to become not only the first "global currency", but also a universal way of storing transaction data in the world.

Once we understand the unlimited potential of blockchain in economics and information security, I believe more experts will come up with other more meaningful applications.