The Role of Blockchain in IT and Technology: Beyond Cryptocurrencies to Real-World Applications
COLLINS BELL
•
September 20, 2025
When most people hear the word "blockchain," they think of Bitcoin and other cryptocurrencies. While this application introduced the technology to the world, focusing solely on it is like looking at the invention of the internet and seeing only email. The real revolution of blockchain is not as a digital currency, but as a foundational machine technology for a new era of information technology—a tool that can fundamentally reshape how businesses, industries, and governments handle data, trust, and transactions.
At its core, blockchain is a new kind of database, or "distributed ledger." Its power comes from three core principles that make it dramatically different from any traditional IT system.
Decentralization: In a traditional database, all data is stored on a central server controlled by a single entity (like a bank, a government, or a company). This creates a single point of failure and a single source of control. A blockchain, by contrast, is a decentralized network. The ledger is copied and spread across thousands of computers, meaning no single person or entity owns or controls it.
Immutability: Data on a blockchain is "immutable," meaning it is tamper-proof. Transactions are bundled into "blocks," and each new block is cryptographically linked to the one before it, creating a "chain." Once a block is added, it cannot be altered or deleted. To change a transaction, one would have to alter every subsequent block on a majority of the computers in the network simultaneously—a feat that is considered computationally impossible.
Transparency: All participants on a permissioned blockchain can see the same "single version of the truth." Because the ledger is shared, it creates a new level of trust and accountability. Instead of multiple companies keeping their own separate, private records, they all share one immutable ledger, eliminating disputes and the need for costly reconciliation.
It is this unique combination of features—not cryptocurrency—that is enabling a new wave of real-world applications that are solving some of the biggest challenges in IT and business.
The "Machine" in the Chain: Smart Contracts
The most powerful "machine technology" enabled by blockchain is the smart contract. A smart contract is not a legal document; it's a piece of software code that is stored and executed on the blockchain.
Its function is simple but revolutionary: it automatically enforces the terms of an agreement. It is a simple "if-this-then-that" program.
IF a shipment is marked as "delivered" by an IoT sensor, THEN automatically release the payment to the supplier.
IF a flight is officially delayed by more than three hours, THEN automatically trigger the insurance payout to the customer.
Smart contracts are the engine of blockchain automation. They remove the need for intermediaries (like banks, lawyers, or auditors) to manually verify and execute agreements, making business processes faster, cheaper, and less prone to human error.
Real-World Applications: Blockchain Beyond Bitcoin
The true potential of this technology is being realized in industries that are plagued by inefficiency, fraud, and a lack of transparency.
1. Supply Chain Management and Logistics
The global supply chain is a fragmented, complex web of manufacturers, shippers, ports, and retailers, all of whom use their own separate, paper-based systems. This creates a "black box" where fraud, counterfeiting, and inefficiency thrive.
Blockchain provides a solution for end-to-end traceability.
How it Works: A product (like a head of lettuce or a pharmaceutical drug) is given a unique digital identity on the blockchain at its point of origin. At every step of its journey—from the farm to the processing plant, to the shipping container, to the retailer—its status is recorded as a new, immutable transaction on the chain.
The Impact:
Food Safety: IBM's Food Trust, used by giants like Walmart, is a prime example. If an E. coli outbreak occurs, a retailer can use the blockchain to trace a head of lettuce back to its exact farm and batch in seconds, rather than the days or weeks it took with paper records.
Preventing Counterfeits: Luxury brands and pharmaceutical companies are using blockchain to create a tamper-proof digital "passport" for their goods, allowing a consumer to scan a QR code to verify that their high-end handbag or life-saving medication is authentic.
Global Trade: TradeLens, a platform developed by Maersk and IBM, aimed to digitize the complex, paper-heavy world of global shipping. By placing bills of lading and customs documents on a shared ledger, it promised to reduce delays and streamline trade for everyone involved.
2. Healthcare and Secure Data
Healthcare data is one of our most sensitive, yet least accessible, assets. A patient's medical history is often fragmented across dozens of different, non-communicating systems (hospitals, labs, specialists).
How it Works: Blockchain allows for the creation of a secure, interoperable, and patient-controlled medical record. A patient's data (e.g., an X-ray, a lab result, a prescription) is encrypted and recorded on the chain.
The Impact: This "single source of truth" solves two problems at once.
Interoperability: A doctor in an emergency room, with the patient's permission (granted via a private key), could instantly access that patient's complete medical history, regardless of what hospital it was created in.
Security: It enhances HIPAA compliance by creating a perfect, immutable audit trail. Every time a doctor, insurer, or pharmacy accesses the record, that "view" is recorded as a transaction, ensuring 100% accountability. The CDC has explored this technology for sharing tuberculosis surveillance data between health departments.
3. Finance (Beyond Speculation)
While cryptocurrency gets the headlines, the underlying blockchain technology is poised to revolutionize traditional finance by automating trust and removing intermediaries.
Insurance: Smart contracts are being used to automate insurance claims. For example, a flight-delay insurance policy can be connected to a real-time flight data feed. If the data shows the flight was delayed, the smart contract automatically executes the payout. This "parametric insurance" requires no claims adjuster and no paperwork.
Cross-Border Payments: Traditional international bank transfers are slow (taking 3-5 days) and expensive, as they must pass through multiple intermediary "correspondent" banks. Blockchain-based solutions can settle these payments in seconds, 24/7, and at a fraction of the cost.
4. Digital Identity and Voting
In the digital world, proving "you are you" is a constant security challenge. Blockchain offers a model for self-sovereign identity.
How it Works: Instead of a company (like Google) or a government holding your identity, you hold it in a secure, encrypted digital wallet on the blockchain. You can then grant specific, temporary access to parties who need to verify it.
The Impact: This could eliminate the need for dozens of different passwords. To log into a new service, you would simply grant it permission to verify your identity from your blockchain-based wallet. This same principle—a decentralized, tamper-proof, and verifiable record—is being tested as a solution for secure, auditable, and reliable digital voting systems.
The Challenges: Why Isn't Blockchain Everywhere?
Despite its immense potential, blockchain is not a magic solution. Its widespread adoption is hindered by significant technical and practical challenges:
Scalability: The most critical hurdle. "Proof-of-Work" blockchains, like Bitcoin's, are notoriously slow. Bitcoin can only process about 7 transactions per second (TPS), and Ethereum handles around 12-30. For comparison, Visa's network handles over 24,000 TPS. This makes traditional blockchains far too slow for high-volume applications like global retail.
Energy Consumption: The "Proof-of-Work" consensus mechanism (where "miners" compete to solve complex puzzles) requires a vast amount of electricity, with the Bitcoin network alone consuming more energy than many small countries. This is an enormous environmental and cost barrier. (Note: Many new blockchains use a more efficient "Proof-of-Stake" model to solve this).
Interoperability: There is no "one" blockchain. There are thousands of them, and they are all isolated ecosystems. Getting these different chains to communicate and share data with each other is a complex technical challenge.
At its core, blockchain is a new kind of database, or "distributed ledger." Its power comes from three core principles that make it dramatically different from any traditional IT system.
Decentralization: In a traditional database, all data is stored on a central server controlled by a single entity (like a bank, a government, or a company). This creates a single point of failure and a single source of control. A blockchain, by contrast, is a decentralized network. The ledger is copied and spread across thousands of computers, meaning no single person or entity owns or controls it.
Immutability: Data on a blockchain is "immutable," meaning it is tamper-proof. Transactions are bundled into "blocks," and each new block is cryptographically linked to the one before it, creating a "chain." Once a block is added, it cannot be altered or deleted. To change a transaction, one would have to alter every subsequent block on a majority of the computers in the network simultaneously—a feat that is considered computationally impossible.
Transparency: All participants on a permissioned blockchain can see the same "single version of the truth." Because the ledger is shared, it creates a new level of trust and accountability. Instead of multiple companies keeping their own separate, private records, they all share one immutable ledger, eliminating disputes and the need for costly reconciliation.
It is this unique combination of features—not cryptocurrency—that is enabling a new wave of real-world applications that are solving some of the biggest challenges in IT and business.
The "Machine" in the Chain: Smart Contracts
The most powerful "machine technology" enabled by blockchain is the smart contract. A smart contract is not a legal document; it's a piece of software code that is stored and executed on the blockchain.
Its function is simple but revolutionary: it automatically enforces the terms of an agreement. It is a simple "if-this-then-that" program.
IF a shipment is marked as "delivered" by an IoT sensor, THEN automatically release the payment to the supplier.
IF a flight is officially delayed by more than three hours, THEN automatically trigger the insurance payout to the customer.
Smart contracts are the engine of blockchain automation. They remove the need for intermediaries (like banks, lawyers, or auditors) to manually verify and execute agreements, making business processes faster, cheaper, and less prone to human error.
Real-World Applications: Blockchain Beyond Bitcoin
The true potential of this technology is being realized in industries that are plagued by inefficiency, fraud, and a lack of transparency.
1. Supply Chain Management and Logistics
The global supply chain is a fragmented, complex web of manufacturers, shippers, ports, and retailers, all of whom use their own separate, paper-based systems. This creates a "black box" where fraud, counterfeiting, and inefficiency thrive.
Blockchain provides a solution for end-to-end traceability.
How it Works: A product (like a head of lettuce or a pharmaceutical drug) is given a unique digital identity on the blockchain at its point of origin. At every step of its journey—from the farm to the processing plant, to the shipping container, to the retailer—its status is recorded as a new, immutable transaction on the chain.
The Impact:
Food Safety: IBM's Food Trust, used by giants like Walmart, is a prime example. If an E. coli outbreak occurs, a retailer can use the blockchain to trace a head of lettuce back to its exact farm and batch in seconds, rather than the days or weeks it took with paper records.
Preventing Counterfeits: Luxury brands and pharmaceutical companies are using blockchain to create a tamper-proof digital "passport" for their goods, allowing a consumer to scan a QR code to verify that their high-end handbag or life-saving medication is authentic.
Global Trade: TradeLens, a platform developed by Maersk and IBM, aimed to digitize the complex, paper-heavy world of global shipping. By placing bills of lading and customs documents on a shared ledger, it promised to reduce delays and streamline trade for everyone involved.
2. Healthcare and Secure Data
Healthcare data is one of our most sensitive, yet least accessible, assets. A patient's medical history is often fragmented across dozens of different, non-communicating systems (hospitals, labs, specialists).
How it Works: Blockchain allows for the creation of a secure, interoperable, and patient-controlled medical record. A patient's data (e.g., an X-ray, a lab result, a prescription) is encrypted and recorded on the chain.
The Impact: This "single source of truth" solves two problems at once.
Interoperability: A doctor in an emergency room, with the patient's permission (granted via a private key), could instantly access that patient's complete medical history, regardless of what hospital it was created in.
Security: It enhances HIPAA compliance by creating a perfect, immutable audit trail. Every time a doctor, insurer, or pharmacy accesses the record, that "view" is recorded as a transaction, ensuring 100% accountability. The CDC has explored this technology for sharing tuberculosis surveillance data between health departments.
3. Finance (Beyond Speculation)
While cryptocurrency gets the headlines, the underlying blockchain technology is poised to revolutionize traditional finance by automating trust and removing intermediaries.
Insurance: Smart contracts are being used to automate insurance claims. For example, a flight-delay insurance policy can be connected to a real-time flight data feed. If the data shows the flight was delayed, the smart contract automatically executes the payout. This "parametric insurance" requires no claims adjuster and no paperwork.
Cross-Border Payments: Traditional international bank transfers are slow (taking 3-5 days) and expensive, as they must pass through multiple intermediary "correspondent" banks. Blockchain-based solutions can settle these payments in seconds, 24/7, and at a fraction of the cost.
4. Digital Identity and Voting
In the digital world, proving "you are you" is a constant security challenge. Blockchain offers a model for self-sovereign identity.
How it Works: Instead of a company (like Google) or a government holding your identity, you hold it in a secure, encrypted digital wallet on the blockchain. You can then grant specific, temporary access to parties who need to verify it.
The Impact: This could eliminate the need for dozens of different passwords. To log into a new service, you would simply grant it permission to verify your identity from your blockchain-based wallet. This same principle—a decentralized, tamper-proof, and verifiable record—is being tested as a solution for secure, auditable, and reliable digital voting systems.
The Challenges: Why Isn't Blockchain Everywhere?
Despite its immense potential, blockchain is not a magic solution. Its widespread adoption is hindered by significant technical and practical challenges:
Scalability: The most critical hurdle. "Proof-of-Work" blockchains, like Bitcoin's, are notoriously slow. Bitcoin can only process about 7 transactions per second (TPS), and Ethereum handles around 12-30. For comparison, Visa's network handles over 24,000 TPS. This makes traditional blockchains far too slow for high-volume applications like global retail.
Energy Consumption: The "Proof-of-Work" consensus mechanism (where "miners" compete to solve complex puzzles) requires a vast amount of electricity, with the Bitcoin network alone consuming more energy than many small countries. This is an enormous environmental and cost barrier. (Note: Many new blockchains use a more efficient "Proof-of-Stake" model to solve this).
Interoperability: There is no "one" blockchain. There are thousands of them, and they are all isolated ecosystems. Getting these different chains to communicate and share data with each other is a complex technical challenge.