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Why is Blockchain Important?

Last updated on August 30, 2020

Why is Blockchain Important

Some people think blockchain technology starts and ends with bitcoin. No way! 

Bitcoin is just one cryptocurrency, out of thousands, and cryptocurrency is just one use case for blockchain! 

Why is Blockchain Important?

First, let me define blockchain: A blockchain is a digital series of encrypted bits of information (called blocks) that form a chain. The encrypted blocks store and exchange data securely.

I’ll use bitcoin to illustrate: 

If I send $100 to my mom, both our banks and government regulatory agencies see this transaction. This is because today’s financial system is centralized. A centralized system means that a few players (in this example, banks and government) own and have access to all the data.

Bitcoin, by contrast, is decentralized. Instead of one central authority owning all the data, everyone does. The recipients and senders of bitcoin are anonymous, but the transactions themselves are public. If I want to send my mom 2 bitcoin, the transaction must first be verified (do I really have 2 bitcoin?) and this is done through cryptographic protocols. These cryptographic protocols, which are 100% transparent, is what makes blockchain technology so special.

In today’s world, when the banks and the government can see whether I have $100 in my account, but I can’t see what’s in their account — is unfair. The relationship is one that gives banks and the government way too much power over the people.

To sum up what blockchain technology does: It allows users to process transactions and share information themselves in a secure, transparent and democratic way. Blockchain explained in two minutes:

Related Reading: Why Cryptocurrency is the Future

Blockchain Can Reduce Voting Fraud

Voting in America is a joke. It is rife with incompetence (Iowa), human error (Florida), and old-fashioned corruption. Blockchain would eradicate these inefficiencies in America’s voting process and allow every citizen to vote online.

Remember, blockchain relies on digital encryption and verification, so each citizen would have a unique code and that unique code would allow them to vote for a candidate one time. The technology itself makes it impossible for a unique code to vote twice, or to ever go back and change a vote.

Instead of long lines, in-person voting, missing ballots, or mail-in voting — our government could implement blockchain voting tomorrow if it wanted to. Companies such as FollowMyVote already exist and are ready to help whenever the politicians are ready.

But nope.

They would rather us mail in pieces of paper sealed in envelopes using the United States Post Office.

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Change is slow in Washington because no one wants to give up their power. But voting digitally using blockchain would increase participation, make the process *actually* democratic, remove the risk of fraud, and eliminate human error. If countries like India can implement blockchain for voting, so can America.

Blockchain for government

Related Reading: The Real Reason Weed is Still Ilegal

Blockchain is Important for Global Supply Chains

I’m not holding my breath for blockchain-based voting in America. The government can’t fix health care, the IRS, the USPS, resist Wall Street’s bribes, or really do much of anything. Thankfully there are other ways to adapt blockchain. For example, look at each stage food goes through before reaching our plate:  

blockchain supply chainAs with all supply chains, there are always chances the product to be damaged, lost, contaminated or worse. Today, when something like this occurs, it’s difficult to trace who is responsible or how much of the product was affected (to know what exactly to recall). As a result, corporations end up recalling everything and billions of products are thrown out every year. This is the ledger of waste from the FDA:

Blockchain supply use casesWhen you think about people in some parts of the country who are hungry, this much unnecessary food waste is a crime. Especially when you consider there is a viable solution to prevent it. 

Implementing blockchain technology in food supply chains would help distributors and manufactures pinpoint exactly what was affected and when. Each stage of the supply chain would become a ‘block’ and those who handled the food at each stage would have to verify the safety and quality of the product. The information would be on a public ledger, making it quick to identify at what point the problem occurred and recall only those items. Once a block is verified on the blockchain, the user can not go back and change it.

Blockchain technology is an incredible human achievement and the possibilities are endless.

Related Reading: What Happens at Burning Man?

Why is Blockchain Important? Just Ask Your Lawyer!

Using the food supply chain example above, what if a user verifies a block without actually inspecting the food?

Normally, we would find a lawyer to tell us the answer. Lawyers create contracts to hold two or more parties accountable and detail the consequences if the contract is ever broken. The problem with lawyers, however, is they are human who often make mistakes.

Blockchain’s answer to lawyers are smart contracts. Smart Contracts replace lawyers but still hold a blockchain users accountable. For example, if the food supply chain was managed on a blockchain, the food inspector wouldn’t be able to verify his block until the food safety check was completed; there would be a digital verification that the food was tested for safety. In other words, 2 years of law school and years practicing law can be replaced by just a few lines of code.

Let’s consider more examples.

We’ve all agreed to hundreds, even thousands, of contracts in our lives. Whether it’s terms and conditions when downloading an app, agreeing to a salary, ordering a new passport or even paying rent — every one of these agreements required a team of expensive lawyers somewhere in the background. But can the lawyers guarantee that all parties will adhere to the terms outlined in the contract?

Of course not!

For example, let’s say a local government raises taxes to pay for a bridge. We take the government at their word and expect to see the bridge built. Except they never build it. The tax increase has already been enforced but the people don’t have a bridge to show for it.

There are plenty of examples of the government promising something to us in exchange for increased taxes, but then they never deliver the results. In a blockchain world, the government would actually face consequences for not making good on their promise to the people.

I think they call that accountability?

Related Reading: Why Taxation is Theft

Blockchain Will Change the World

The use cases for blockchain span far and wide, and are growing by the year. Whether it’s blockchain in healthcare, blockchain out in sea, blockchain to support artists, or blockchain for immigration — the use cases are endless.

If you suspect that blockchain technology could take people’s jobs away, then you are right. The technology is so efficient and removes the need for middlemen. This could be another reason why our governments are slow to invest in rolling out its capabilities. 

The problem with that, however, is humans are meant to evolve. If our species created a technology, it should be up to us to decide whether or not to use it — not a small group of other humans who want to control us.

After all, the best use case for blockchain technology is to finally have a way to hold government accountable.

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