At its core, Blockchain is a distributed ledger of transactions. Each transaction is verified by all nodes through the consensus mechanism ↗. Here, for all network participants to partake in the validation and approval process, a copy of the complete transaction history of the whole blockchain i.e., all the transactions recorded on the given blockchain, is needed. This is disruptive compared to traditional data storage systems because all data stored in a blockchain can be accessed and leveraged by its users, whereas in more conventional digital environments the underlying data of a network is stored by the third party providing the service (e.g., Facebook or Alphabet). Together with the immutability of the blockchain, the fact that every transaction within the network is auditable by every other participant leads to full transparency becoming an automatic feature of Blockchain. Blockchain creates an unforgeable, transparent record of all transactions - accessible for everyone across the network.
Now, let us think about some possible ways in which this feature might be leveraged thanks to its transparency:
or any other system that may require an audit. Because of the indelible record of transactions, no central, trusted unity is needed. By means of smart contracts, a guarantee that any kind of agreement will bear out can be provided without a third party.
#2 Record of supply chains
Any product could be tracked through all different stages, securing that no tampering has happened with the final product. For products such as medical devices, this could revolutionize whole industries.
#3 Digital Identity records
Full transparency on blockchain has potential to solve major problems that we have today with digital identities - as they appear fragmented and with few standards or interoperability. New identity frameworks based on the concept of decentralized identities could provide secure, unfakeable and reliable digital equivalents of physical world credentials. An initiative of the European Commission, The EU Blockchain observatory and forum, currently discusses feasibility (see here ↗ for a full report).
As blockchain guarantees a transparent and traceable list of records, elections and their results could be equitable and non-fakeable, this could disrupt the way election fraud and transparency issues could be combated. The state of West Virginia started deploying such systems for its elections in 2018.
Increasing transparency is important to combat a wide arrange of social issues like corruption, information asymmetries and unaccountability. Investments in tokens supporting the blockchain ecosystem e.g., through staking, are investments in a technology with the promise of increasing transparency in many different aspects of our daily lifes.
Photo by Mitchell Luo