What is the China block and what is its application in business? The launch of Bitcoin in 2009 took Blockchain from the application of theory to the real world and showed that the technology really works. Since then, organizations have been experimenting with how they can apply the China Bloc to themselves.
Large corporations, government agencies, and nonprofits use the Chinese blockchain to improve existing processes and activate new business models.
The value of the China Blockchain stems from its ability to share data quickly and securely between entities, without any entity taking responsibility for data protection or facilitating transactions.
“This is a general ledger that has unique features that help solve problems in our systems and processes,” said Ayman Omar, an associate professor in the Department of Information Technology and Information Analysis at American University and a researcher at the Kogud Cyber Security Management Center…
In fact, the Chinese blockchain and its features can provide many benefits to businesses; Whether they use a public blockchain network or select private or licensed blockchain-based applications.
Experts identify the following as the top benefits of the Chinese block:
1- Building trust
The Chinese bloc builds trust between different institutions, where trust is usually either non-existent or unproven. As a result, these entities tend to engage in business transactions that involve transactions or data sharing that they might not otherwise have done or would need an intermediary to do so.
Enabling trust is one of the most important benefits of the Chinese bloc. Its value is evident in the early use of the Chinese blockchain, which facilitated transactions between entities that were not directly related to each other and had to share data or payments. Bitcoin and digital currencies are generally prime examples of how the Chinese blockchain builds trust between participants who do not know each other.
2- Decentralized structure
Daniel Field, President of the China Bloc at UST, the global provider of digital technology and services, explained that the China Block really proves its worth when there is no central player that makes trust possible. Thus, in addition to activating trust when participants do not trust each other due to anonymity, Blockchain enables data sharing in an ecosystem of businesses for which no single entity is solely responsible.
The supply chain is one thing: many businesses, from suppliers and shipping companies to manufacturers, distributors, and retailers, want or need information from others in the chain, yet no one is responsible for facilitating this information sharing. The Chinese bloc solves this problem with its decentralized nature.
3- Improving security and privacy
Security of blockchain systems is another major benefit of this emerging technology. The advanced security provided by Blockchain stems from how the technology works: Blockchain creates an unchanging record of end-to-end encryption transactions that prevents fraud and unauthorized activity.
In addition, data on the blockchain is stored on a network of computers, making it almost impossible to hack it (unlike conventional computer systems, which store data together on servers). In addition, Blockchain can better address privacy concerns than traditional computer systems by anonymizing data and requiring permission to restrict access.
4- Reducing costs
The nature of the Chinese blockchain can also reduce the costs to organizations. Creates efficiency in transaction processing. It also reduces manual tasks such as collecting and modifying data, as well as facilitating reporting and auditing processes. Experts point to the savings that financial institutions see when using blockchain, explaining that the ability of blockchain to simplify clearing directly translates into cost savings.
More broadly, blockchain helps businesses reduce costs by eliminating intermediaries (sellers and third-party providers) who traditionally provide the processing that blockchain can perform.
5- High speed
By eliminating intermediaries as well as replacing manual processes remaining in transactions, the blockchain can execute transactions significantly faster than conventional methods. In some cases, the blockchain can complete a transaction in seconds or less. However, this time can be different. How fast a blockchain-based system can process transactions depends on several factors, such as the size of each data block and network traffic.
However, experts have concluded that the Chinese block usually defeats other processes and technologies in terms of speed. In one of the most prominent applications of the Chinese blockchain, Walmart used this technology to track the source of fragmented mangoes in seconds; A process that used to take seven days.
6- Ability to view and track
Walmart’s use of the Chinese block is not just about speed. It also has the ability to trace the origin of mango and other products. This allows retailers like Walmart to better manage inventory, answer problems or questions, and verify their merchandise history.
If a particular farm has to return its produce because of contamination, a retailer using the Chinese block can identify and remove the product that comes from that particular farm, and at the same time sell the rest of its produce. Experts say the Chinese blockchain could help trace the origins of various items, such as drugs, to verify their legality instead of counterfeit and organic drugs to verify that they are truly organic.
Immutability means that transactions cannot be changed or deleted after being registered in the Chinese blockchain. In the blockchain, all transactions have a timestamp and a date, so there is a permanent record. In this way, the blockchain can be used to track information over time, enabling reliable and reliable auditing of information. (This is in contrast to old, malicious computer systems that may crash.) As an example of the potential of this advantage, Omar pointed to Sweden’s use of the Chinese blockchain to digitize real estate transactions to track asset titles even if the hand is changed.
8- Individual control of data
Experts say China’s Blockchain enables unprecedented levels of personal control over digital data. “In a world where data is a very valuable commodity, this technology inherently protects your data while allowing you to control it,” says Michelle Manting, ABI Research Director. With the restrictions imposed by China’s Blockchain-based smart contracts, individuals and organizations can decide with whom and for how long they want to share their digital data.
Tokening is the process by which the value of an asset (whether physical or digital) is converted into a digital token, which is then recorded on it and then shared through a blockchain. Joe Davey, technology director at West Monroe Global Consulting, said tokenization has gone hand in hand with digital art and other virtual assets, but tokenization has a wider range of applications that can facilitate business transactions. For example, utilities could use tokens to exchange carbon emissions under carbon roof programs.
Various industry leaders are exploring and implementing China-based blockchain systems to solve unsolvable problems and improve long-term cumbersome practices. Field cited the use of the Chinese blockchain to verify job application resume information as an example of such an innovation.
Studies have consistently shown that a large percentage of people falsify their resumes and expose hiring managers to the time-consuming task of manually reviewing information. But pilot programs that allow participating universities to block graduate data and credentials that are then accessible by authorized recruiters help solve both problems: Getting to the truth quickly and efficiently…
Examples of industries that benefit from the Chinese blockchain
The benefits of the Chinese blockchain include industry segments, but this technology is better suited for some sectors and companies than others. Businesses that are, by definition, decentralized have multiple parties that need access to the same data and a better way to ensure data manipulation, are test programs or have completed test cases. Below are some examples of industries that benefit from the Chinese block.
Financial institutions (and their customers) are seeing faster and cheaper settlements.
Health care providers have found that blockchain can ensure the security of patient records and patient privacy, while at the same time allowing patient data to be shared only if the patient allows it.
Nonprofits and government agencies have adopted smart contracts and other blockchain-based applications to create immutable records that comply with the terms.
Disadvantages and challenges of the Chinese bloc that must be considered
Experts warn that the initial implementation of the China Bloc has also revealed some of the disadvantages and challenges of this technology.
- To get started, blockchain-based applications require that everyone in the process ecosystem use the system. This, in turn, requires everyone to invest in technology implementation and process changes that go hand in hand with moving to a new blockchain-based program. In addition, experts point out that many companies do not believe that blockchain can still provide high enough returns to justify the cost of replacing existing systems at this stage.
- In addition, many China Blockchain solutions require the support of other systems and processes to verify the data added to the China Blockchain. For example, consider using a blockchain to manage your supply chain. Companies can use such systems to verify the payment of taxes applicable by suppliers. But if they rely on suppliers for approval, the value of the China Blockchain solution weakens.
“This is the biggest weakness in the Chinese bloc today,” Manning said. This technology [assumes] that all parties involved adhere to the standards, but someone may be lying. Therefore, checks should be made to confirm the information. There should be a mechanism behind the information to verify it. These organizational uses of the Chinese block, despite the decentralized nature of technology, often require central control. “There is still the question of who will deal with breaches of trust and protocols.”
According to experts, given these precautions, managers need to carefully consider where they are investing in the Chinese blockchain.
They stressed that the real value of the Chinese blockchain is achieved when it is used in areas where a normal database does not work and in situations where there is no central control or trust.
“If there is a high level of trust, there is no problem for the Chinese bloc,” Omar said. But the more you face a lack of vision or the potential for corruption, the greater the benefits. “This is where the Chinese bloc becomes a solution.”
Blockchain-based programs are paired with artificial intelligence, machine learning, or other decision-making layers, he said.
However, experts still believe that the Chinese bloc will disrupt the business, even if the revolution does not happen soon.
“It is important to understand that there has been a lot of publicity about the Chinese bloc, and although it is theoretically revolutionary, it will not change society today,” Manning said. “It may happen in the next 10 to 20 years, but it is not a short-term technology.”