According to a recent Blockchain Market report, the blockchain market is anticipated to grow from $411.5 million in 2017 to $7683.7 by 2022. – PR Newswire, 01/2018
An IBM study surveying 3000 executives found that 80% of them are already using, or planning to use blockchain technology in their day-to-day business.
Gartner analysts have also claimed in their recent report that the blockchain technology will revolutionize every industry, (financial and otherwise).
All these insights point to why blockchain has become a favorite topic of digital industry news outlets. The technology is set to disrupt a myriad of industries; including healthcare, education, law enforcement, retail and more.
So, what is all the hype about?
In this article, I will uncover some interesting blockchain use cases across different industries and reflect on its benefits. Before that, let’s quickly understand what blockchain technology is and what it isn’t.
What is Blockchain Technology?
Blockchain is not an app, or a company, but a novel revolution in system of records models (like databases, registries, and file management). Blockchain is a global, public ledger of file information to record, transact, and verify large volumes of data. It has come to prominence in the cryptocurrency arena as it is the transaction and verification structure for Bitcoin and other digital currencies.
The blockchain framework is implemented using a combination of these three technologies –
- Private Key Cryptography
- Protocols for transaction processing to ensure security.
- Distributed peer-to-peer networks for a shared (decentralized) ledger.
Blockchain Use Cases
Compared to other existing technologies, blockchain has the capability to record and distribute a single, immutable version of data to different parties. This ensured multiple sourced version of a single truth, makes it ideal for enhancing the efficiency and effectiveness of any industry’s value chain. The best way to appreciate the potential of blockchain technology is to understand how various industries are extracting value from it. Here’s a quick look at some of the potential blockchain use cases that are changing business paradigms.
Blockchain in Banking
Millions of people and businesses are served, and trillions of dollars move through banks every day. However, most of the banks still depend on paperwork. Although we live in the digital age, many of these large and old institutions, like banks, are very dependent on physical paper records. As you might imagine, there are several issues with paper reliant systems, resulting in additional expenses, and fraud, and crime. It’s calculated that 45% of financial intermediaries like money transfer and stock exchanges suffer from economic crime and fraud every year. – Harvard Business Review, 03/2017. Blockchain has the potential to combat much of this crime and fraud because the ledger is continuously reconciled by the peer-to-peer instances that make up the blockchain framework.
Files and records built on blockchain can only be updated when it is verified by all of the transacting end users by way of their private keys. Blockchain technology also enables the use of smart contracts (goodbye paperwork), where programmed contracts are created and financial transactions are executed only when some specific criteria are met, such as an invoice being paid, an alert message sent, or after the confirmed delivery of a product.
Blockchain in Retail
Blockchain technology has emerged as an exciting new development in the retail industry. Blockchain finds extensive use in supply chains to make the processes more accurate, secure and paperless. Blockchain stores the product story (a history log) in what is sometimes called a chronological order of custody. Meaning a customer can see the data associated with a product and a breadcrumb trail of the handoffs from party to party at every point in the supply chain. For instance, if a retail shop sells an orange flavored cake, blockchain data will not only give you accurate information on when and where the cake was made and by whom, but it also helps you track the individual ingredient data, and potentially the ingredient supplier data. This provides an assurance to the retailer that the confectioneries are made with fair trade oranges ethically sourced vanilla, and shipped in safely stored conditions.
It’s not just supply chains that will bare the benefits in retail, but blockchain will also ensure that a luxury brand product is what it seems to be. Knockoffs products don’t have the authentication history log which guarantees that the product originated from the actual brand manufacturer, so the true luxury product can be verified.
Authenticity of pricey brands has always been a major issue for big fashion houses as customers are fooled by facsimile products. These knockoffs are usually available at lower prices and equally lower quality, which diminishes the exclusivity and of the authentically branded products. Using blockchain technology, data tracked right from the sourced materials, to the end customer’s purchase will give everyone involved an assurance that the product is a genuine article. By tracking the ownership of items, retailers will also be able to combat the resale of stolen goods and put an end to theft of pricey-end products.
Blockchain in Legal Industry
Blockchain is on pace to revolutionize the legal industry and will help the legal system run more efficiently and smoothly. For example, in developing countries, it is often challenging to maintain and track who owns a particular piece of land. Blockchain will clear this confusion, as all land deeds will be maintained in a blockchain ledger that is easily verifiable. All people involved in a land deed (from government to owners) will have access to the same information on who is the legal landowner, when the ownership transferred, and other real estate details.
Blockchain will not just benefit land registry and deed management, but can also be used for protecting legal intellectual property rights through indisputable record of filings. Blockchain is secure, time-stamped, transparent and inalterable. It will provide a proof of evidence for authorized use, and will fuel great applications for protecting any kind of copyrights, trademarks, and patents.
Blockchain in Insurance
Blockchain technology can help maintain data transparency, which is extremely important in insurance claims. Insurance policy rules can be written into smart contracts which will help automate the entire claims processing process. Having a shared database and ensuring that records are not altered will prevent insurance fraud. Insurance customers can expect timely payouts based on verifiable and shared access to data. The end-to-end service of need and paying insurance premiums will be made more efficient.
Blockchain in Healthcare
Blockchain technology can solve healthcare’s more difficult problems by facilitating drug development and ensuring supply chain integrity. Also, for the reasons stated above, drug authenticity can be traced to stop misdirection of drug shipments. Blockchain will foster the development of new drugs by making patients medical records more widely available to doctors (who’s systems have the secure keys), but not accessible to bad actors (who don’t have keys and cannot change all copies of the records across the peer to peer network). It will curtail the counterfeit drug market, which results in approximately $200 billion dollars in annual losses for pharmaceutical companies and developers.
The Bottom Line
Blockchain has now gone beyond the trigger of innovation and is now at the highest peak of inflated expectations. There is a lot of hoax and hype in the marketplace concerning the technology. Even so, one thing is certain, blockchain has taken a clutch of industries by storm in the past year, and we can expect significant investments across many other industries for the blockchain framework in the future.
If you think I have missed any other important blockchain use cases, please send me your comments below. In the meantime, if you’re interested in finding out more breakthroughs in technology that will soon to have an affect on us all – then you’re in for a treat!