Can blockchain technology become mainstream?

Blockchain as a form of distributed ledger technology (DLTs) enables parties with no trust in each other to exchange any type of digital data on a peer-to-peer basis with fewer or no third parties or intermediaries. In terms of data, the latter can be represented as money, contracts, titles, records such as medical history, and so on.

   Indeed, the European Commission explains that blockchain as a subset of DLTs employing cryptographic techniques to record and synchronize data in chains of blocks is about buying and selling goods and services or any other type of transaction or asset that can be translated into a digital form. Blockchain technology is a database (ledger) operating in a distributed network of multiple nodes (computers) that keeps track of data transactions.

   A blockchain is categorized as public or open when anyone can access a whole blockchain and read its contents. On the contrary, when only authorized entities have access, a blockchain is considered closed or private. Also, there are hybrid blockchains combining different aspects of public and private systems.

   The main concept behind blockchain is decentralization. When two or more parties do not trust each other and at the same time they want to make a transaction, then blockchain technology offers a place as an unofficial referee where no one has access to the whole picture when it is set as a private system. Also, blockchain technology claims a transparent environment in terms of an open blockchain set.

   Whether the technology used is open or closed security is quite critical. Cryptography is a vital part of this technology and participants have a distinct identity based on a combination of public and private keys. However, management of such sensitive information cannot be secured by technology itself as its human users can exploit data breaches for the best of their interests.

   In practice, a great example on how blockchain works stems from the Swedish Land Registry which is responsible for storing land titles. The blockchain only stores the state of the system after the execution of each step in the workflow. The entire transaction process underlying a property transfer (involving buyer, seller, real estate agent, banks, and land registry) is described perfectly by the following figure that European Commission published recently.

   In any case, many countries are trying to take full advantage of such developments. The largest number of blockchain firms was recently established in China, the United States, and European Union. Business and financial services are leading this technology, followed by information technology, and consumer services.