Blockchain was created as the system for running bitcoin and other cryptocurrencies.Big banks and corporate giants are racing to make the technology work for them in the belief that it will cut costs and transform the way the world does business.Finance is only the start, though.Blockchain is also being put to work on a handful of the world’s toughest problems.Think: human trafficking, conflict diamonds and land rights.How is this possible?Blockchain is a decentralized database shared among a network of computers, all of which must approve an exchange before it can be recorded.There’s no need for a trusted intermediary like a bank because the information is held securely and transparently on a digital ledger for all users on the network to see.The implications for society could be huge: blockchain may have been developed as a system for payments, but its admirers believe it has almost endless applications, from making online music sharing fairer to empowering people through registering land.

Here’s a look at a few of blockchain’s more unconventional uses: Tackling human trafficking One fifth of the world’s population – an estimated 1.5 billion people – do not have an official document to prove their identity.Most of them live in Asia and Africa and a “disproportionate number” are women and children, the World Bank says.Without legal identification, these people are “invisible” to society, and that makes them vulnerable to trafficking, prostitution and exploitation.Microsoft has announced it is working with partners on a secure identity system that uses blockchain to independently verify people’s identities.Tracking blood diamonds The Kimberley Process, an international body launched in 2003 to clean up the trade in conflict-zone diamonds, is exploring how blockchain could help trace the provenance of diamonds.One start-up, Everledger, is already using blockchain to digitally certify diamond ownership.CEO and founder Leanne Kemp believes the technology could also be applied to other problems such as ivory poaching.

“The question of authenticity is key because, for instance, counterfeit goods are funding terrorist activities,” she told WIRED: “We can apply this technology to solve very big problems: ivory poaching, blood diamonds, all these big ‘blood problems’ that are helping cartels, terrorists and criminals.” The fashion industry is also experimenting with blockchain as a method of tackling counterfeiting.Shaking up the music industry Within the music industry, blockchain is being touted as a way to level the playing field for artists by allowing them to sell direct to fans and to solve licensing issues.Grammy-winning singer-songwriter Imogen Heap released her song Tiny Human using a blockchain platform.Users paid for licences to download, stream and remix the song and each payment was automatically split between all the people involved.Heap has now launched her own blockchain project, Mycelia.Sweden is experimenting with putting its land registry system on blockchain.The plan is to use the technology to make the details of real estate transactions visible to all parties – banks, brokers, government officials, buyers and sellers.

For developing countries, building immutable title systems on blockchain could be a means of stamping out fraud and encouraging people to record unregistered land.It might also help banks to lend against land.In Honduras, one of the poorest countries in Latin America, US blockchain company Factom was reportedly in talks with the government in 2015 to create a decentralized database of land titles.bitcoin pebbleMeanwhile, a different initiative, Bitland, is looking at the feasibility of putting titles on blockchain in Ghana, where an estimated 78% of land is unregistered.ceo of bitcoin found dead in singaporeThe Georgian government is also reported to be working with Bitcoin company BitFury on a system for registering land titles using blockchain.litecoin to brl

Bitcoin became something of a sensation in 2013 when the value of the digital currency spiked from $13 in January to $1,128 in November.In March of this year, one Bitcoin was running about $1,100, despite possessing no intrinsic value, corporeal form or backing by any sovereign government.Thank ransomware rings, drug dealers and wealthy Chinese businessmen seeking to circumvent government capital controls by secretly exfiltrating cash.litecoin finding a blockBitcoin’s most valuable payoff, however, may be in popularizing digital ledger technology using cryptographically secure blockchains.bitcoin mining difficulty 2015If that mouthful of jargon looks like a foreign language, don’t worry.10 000 bitcoin pizzaThe technical sophistication belies a simple foundation.

In fact, the concepts behind blockchain are as old as accounting itself, which explains why the world’s largest financial institutions have poured significant money into development efforts for blockchain-based services.They’re not alone, though.A recent report from McKinsey & Company says the technology is poised to disrupt a range of industries by the end of the decade.After surveying 200 companies currently using blockchains, the consultancy determined that the tech could help move $80 billion to $110 billion annually, with the bulk coming from business-to-business (B2B) payments.{ad} You needn’t be a high-dollar consultant to spot opportunity, or to engage customers.Anyone who’s balanced a checkbook understands the basics of a ledger: It’s simply a list of account transactions, itemizing debits and credits.The foundation of blockchain is a decentralized digital ledger that can be shared by all stakeholders to a transaction.According to KPMG, distributed ledgers like those used in blockchains have six elements.

They are: Blockchains achieve these attributes through the use of public-key cryptography, one-way hashing algorithms and the ability to easily create distributed copies of digital ledgers.Every transaction in a blockchain is signed by the originator using its private key and the recipient’s … … public key.The recipient verifies with the originator’s public key and a private key-based digital signature.Other parties in the blockchain can validate the authenticity of the recipient by decrypting the signed transaction with the recipient’s public key.This process repeats for every transaction in a blockchain as illustrated in the (somewhat technical) video below.Blockchain transactions resist tampering by also using a one-way hash to sign every transaction and include its sequence number in the chain.Thus, changing any signed transaction invalidates all subsequent transactions by altering the hash values.You can try out different hashing algorithms using this site, and this video provides a useful visualization of the process.

The implications have Wall Street and other businesses excited.{ad} William Mougayar, a venture capitalist and author of a book on the topic, noted in a recent interview that blockchain has ramifications across technical, business and legal domains.The technology promises to disrupt business by creating a digital exchange network enabling peer-to-peer, B2B transfers.Their cryptographic, time-stamped security and immutability can also serve as the basis for legally binding digital transactions that don’t require being certified by a middleman, like a notary or escrow agent.Early use cases are for financial services — peer-to-peer payments, lending and microtransactions.However, just about every vertical has the potential to be disrupted.Governments could use digital ledgers for land and auto deeds and titles, along with all forms of registrations.As the energy grid becomes decentralized, blockchains will support distributed sales using microtransactions.Real estate firms could simplify title searches, insurance and escrow.

In health care, ledgers will make it easier to securely share medical records.Transportation and logistics firms can enhance trust among customers with no prior relationships and improve the … … accuracy, security and validity of documentation related to shipments and deliveries.The Blockchain Insurance Industry Initiative is piloting uses including streamlining paperwork and reconciliations while improving auditability.Anywhere you can imagine bookkeeping and accounting improvements, think blockchain.Although blockchain technology is rapidly advancing, turning it into useful business applications is still as much art as science.As Mougayar points out, blockchain platforms are immature and difficult to use, reminiscent of the early days of the web, when publishing a page required HTML coding.However, he expects the usability and maturity situation to dramatically improve over the next two years.While that means partners have time to be deliberative, first movers frequently get a business edge.

By establishing a blockchain advisory service early, your firm can start building a reputation as the go-to source for advice and ideas.First, get to know the popular blockchain and distributed ledger frameworks, such as Ethereum, Hyperledger, Quorum and Ripple, and related blockchain cloud services, including those from Microsoft Azure, IBM and AWS/Digital Currency Group.A number of channel-focused suppliers want to help you get started.Microsoft has advocated using blockchain to register and track products from manufacture to sale or placement in a composite SKU, and IBM and Cisco see blockchain as a natural way to securely share IoT data.At a recent conference, Dell said it has set up a dedicated blockchain practice and an innovation lab to prototype uses for smart buildings.Verizon sees uses around digital rights management.{ad} Talk with customers about business problems that may be amenable to smart contracts and digital transactions.These discussions should suggest service opportunities.