If you are a consumer of financial or business news, you have undoubtedly heard about blockchain technology. Usually, analysts and pundits argue that blockchain technology is a game-changer in that it will disrupt nearly every sector or industry.
The headlines are tantalizing. That said, you still may be unclear about what blockchain technology is and how it will impact our world.
If you feel this way, don’t worry. We have your back. While the inner-workings of blockchain technology can be complicated, we have broken down what blockchain technology is and how a startup called carVertical is leveraging blockchain technology to solve a particular problem in the auto industry.
Understanding what blockchain technology is and how it can be used in one discrete industry will better prepare you for a world that relies on blockchain technology to solve long-standing problems.
Blockchain Technology: A Quick Primer
One of the better ways to explain blockchain technology is to look at the term itself. A blockchain is composed of a series of blocks that are composed of digital information. That information is stored in a public database (the “chain” part of blockchain) and secured through the use of cryptography.
The blocks themselves store three kinds of information. This information includes data about a certain transaction, the parties on both sides of the transaction, and a unique code (called a “hash”) that distinguishes one block from another. Each block, depending on the size of the transaction, can contain thousands of transactions.
What separates blockchain from payment processors, for instance, is that transactions on a blockchain are not verified by a central authority. Instead, networks of computers confirm the transactions. Once the transaction is confirmed, it is stored in a block, which is later hashed and then added to the blockchain. While anyone can view the contents of the blockchain, they can only view usernames rather than identifying information about the users making those transactions. The actual mechanics of confirming transactions and securing the blockchain can be complicated.
Blockchain Technology: One Application
But ultimately, what does this all mean? Blockchain technology promises to be a game-changer due to its decentralized nature and security. It is virtually impossible to hack the blockchain. Along with this, the fact that the blockchain is a public ledger means that some much-needed transparency is brought to certain industries and transactions that occur in our day-to-day lives.
As just one example, let’s say that you want to purchase a used car. You may go to your local dealership or car lot and find a car that you love. Before making the purchase, however, you are not 100 percent sure whether the vehicle has previously suffered damage or been in any prior accidents.
This is a perfect example of where blockchain technology can help. In fact, a startup called carVertical is already tackling this problem. Specifically, carVertical uses several different sources to collect as much information about a vehicle as possible. That data is then processed, verified, and confirmed through blockchain technology. What this means is that carVertical clients can be 100 percent sure about the condition of a vehicle they intend to purchase.
carVertical continues to innovate in this space, as it recently announced a partnership with GPSWOX on a new project called CarVertical.CITY. CarVertical.CITY leverages IOTA (distributed ledger technology), GPS, and other technologies to create a “global unified solution for automatic car parking.” Users simply need to install a carVertical ODB device and download the carVertical.CITY app to seamlessly pay for parking. Ultimately, this solution (which is being rolled out in municipal parking zones in Vilnius, Lithuania) would not be possible without blockchain technology. This is just another example of how blockchain technology promises to transform our world and to make our lives even easier.
The Blockchain Revolution
Blockchain technology is still in its infancy, yet there are already applications like carVertical that are changing the way that we work and play.
The technology certainly is not going away. Because of this, it is important to understand how it works and how it will continue to affect our world. Blockchain technology is truly revolutionary and it will impact our lives in more ways that we can imagine.