PROCESS OF BLOCKCHAIN

1. Smart Contracts

The term ‘smart contract’ was first coined in 1993, but it’s recently become a buzzworthy term thanks to the 2013 release of the Ethereum Project. The Project “is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.”

Chris DeRose further explains on American Banker that ‘smart contracts’ are “self-automated computer programs that can carry out the terms of any contract.” In essence, “it is a financial security held in escrow by a network that is routed to recipients based on future events, and computer code.” Businesses will be able to use ‘smart contracts’ to bypass regulations and “lower the costs for a subset of our most common financial transactions.” Best of all? These contracts will be unbreakable.

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Companies like Slock, which is an Ethereum-enabled internet-of-things platform, uses this application to allow customer to rent bicycles where they can unlock a smart lock after both parties agreed on the terms of the contract.

2. Cloud Storage

Cloud storage will be another application that businesses can take advantage of. Storj, which at the time of this article is still in beta-testing, is one such company that’s offering secure cloud storage while decreasing dependency. Storj founder Shawn Wilkinson told VentureBeat that “Simply using excess hard drive space, users could store the traditional cloud 300 times over,” much like how you can rent out your home or room on Airbnb. Wilkinson also said, “Considering the world spends $22 billion + on cloud storage alone, this could open a revenue stream for average users, while significantly reducing the cost to store data for companies and personal users.”

3. Supply-Chain Communications & Proof-of-Provenance

Phil Gomes says on Edelman Digital “Most of the things we buy aren’t made by a single entity, but by a chain of suppliers who sell their components (e.g., graphite for pencils) to a company that assembles and markets the final product. The problem with this system is that if one of these components fails 'the brand takes the brunt of the backlash.'” Using blockchain technology would “proactively provide digitally permanent, audit-able records that show stakeholders the state of the product at each value-added step.”
Provenance and SkuChain are just two examples of companies attempting resolve this issue.