Blockchain use cases in various industries.
Blockchain or distributed ledger technology (DLT) consists of a distributed, decentralized ledger, which is a continuously growing list (or “chain”) of records, are stored in the form of blocks. The blocks making up a blockchain are connected to each other through cryptography, which maintains the confidentiality of all the transactions occurring on the chain.
What results is a time-stamped series of tamper-proof or immutable data records that are not managed by a central authority. Instead, management is implemented via a cluster of computers, and the blockchain acts as a peer to peer network. Every item of data shared on this network is visible to all the blockchain participants — and each participant is accountable for their own actions.
So blockchain combines cryptography and decentralized record-keeping in a technology that enables people to create unique, specific assets online. Each digital asset backed by blockchain is unique and cannot be copied or moved.
Though initially serving as the foundational technology of cryptocurrency systems like Bitcoin and Ethereum, blockchain use cases extend to any industry or vertical that relies on permanent record-keeping and the efficient processing of financial and information transactions.
In this article, we’ll be looking at some of the various uses of blockchain technology in our present environment.
Through integration with blockchain technology, assets such as real estate, which are often constrained by liquidity or investment size, can be converted into tokens, split up, and distributed in digital form. In this way, the management of tangible, intangible, and complex assets may be accomplished with minimal operational friction, management costs, and security concerns.
Banking and Finance Payments
Blockchain provides a mechanism to securely and efficiently create a tamper-proof log of sensitive activities, making it ideal for managing international payments and money transfers. Blockchain technology can also decrease the cost of these transfers by reducing the need for banks to settle transactions manually.
An example of this is Santander One Pay FX, the world’s first blockchain-based money transfer service, introduced in April 2018 by Banco Santander. The service enables customers to make same-day or next-day international money transfers, typically reducing the number of intermediaries required in these transactions and making the process more efficient.
Blockchain Use Cases: Capital Market Infrastructure
Historically, capital market infrastructure has been a bureaucratic nightmare, with liability risks that produce high operational costs and hurdles that discourage potential investors. By optimizing the back end cost of capital market operations and introducing a single shared source of truth for stakeholders, blockchain can overcome these obstacles.
Central Bank Digital Currencies (CBDCs)
Taking the lead from the success of independent cryptocurrencies like Bitcoin and Ethereum, Central Bank Digital Currencies or CBDCs offer central banks increased financial access for individual customers and a more efficient infrastructure for inter-bank settlements. This provides benefits at both the retail and wholesale levels, and CDBC schemes are already in existence. For example, in 2020, Venezuela launched a national cryptocurrency called petro (petromoneda), backed by its oil and mineral reserves.
Blockchain Use Cases: Compliance and Regulatory Oversight
With changing industry standards and increasingly strict data privacy and governance regulations creating an additional burden on organizations in various sectors, record keeping and auditing have become mission-critical activities — particularly in light of the severe legal and financial penalties resulting from non-compliance.
Besides assuring the integrity and security of data, blockchain technology can make record updates available to regulators and businesses in real-time, thereby reducing time lags and allowing red flags and anomalies to be spotted more quickly.
Digital Identity Management
Blockchain-based digital identity systems may have applications for enterprises, individual users, and IoT management frameworks. Unified, integrated, and tamper-proof blockchain infrastructure solutions can provide protection against theft, offer security and governance for companies storing customer information, and give individuals greater control over their own data.
Blockchain Use Cases: Energy and Sustainability
Oil and gas companies typically suffer from issues concerning transparency, efficiency, resource optimization, and the problems associated with a disparate infrastructure that keeps vital assets in silos. Enterprise standard blockchain solutions can increase process efficiencies and reduce the costs associated with operations and distribution.
Healthcare and Life Sciences
Perhaps the best use of blockchain in the health sector is to improve governance and the handling of critical information. Blockchain solutions for healthcare can enable quicker, more efficient, and more secure medical data management and medical supply tracking.
For providers, this can help in easing administrative burdens and in streamlining and optimizing healthcare operations. At the patient or consumer level, blockchain solutions may significantly improve patient care, facilitate the advancement of medical research, and guarantee the authenticity of drugs circulating the global market.
Law and Contracts
It’s estimated that today’s legal system’s manual operations and processes cost a typical law firm, 9.8% in total productivity each year. Blockchain legal solutions such as Enterprise Ethereum are providing practitioners with greater accessibility to data, more transparency, cost savings, speed, efficiency, and data integrity.
An offshoot of blockchain technology, smart contracts enable the automatic execution of contract agreements when all relevant conditions are met. As an example, Insurers AIG is currently piloting a blockchain system that allows for the creation of complex insurance policies.
Blockchain Use Cases: Music and Entertainment Media
One of the more interesting uses of blockchain is in the realm of music, entertainment media, and intellectual property. In the analog days before the internet, an entertainment company could sell a record or movie and know that they had sold a single copy to a single person. The effort and expense involved in making and distributing multiple bootleg copies of such commodities kept piracy at more manageable levels.
After the emergence of the web, a single copy of a song or online video could be mass-produced and distributed in minutes. By signing each digital copy of a single song or movie to a single purchaser, blockchain technology could put an end to all that. The distributed public ledger mechanism can make it impossible for someone who isn’t the designated owner of a piece of intellectual property to play or duplicated anyone else’s copy.
With piracy, fraud, and intellectual property theft of digital items costing the entertainment industry an estimated $71 billion annually, blockchain technology can create a distributed ledger to track the life cycle of any type of digital content.
Supply Chain and Logistics
In the areas of supply and logistics, blockchain’s distributed ledger infrastructure facilitates the accurate tracking of assets and enables the enhanced licensing of services, products, and software. Blockchain also improves transparency into the origin of consumer goods and components — from sourcing ingredients and raw materials to the point of consumption.
For companies transporting goods and raw materials, using a blockchain opens up several options. Entries on a blockchain can be used to queue up events within a supply chain, for example, in an intelligent asset management system that can allocate items newly arrived at a port to different shipping containers.
These are just some of the uses of blockchain in current vogue. New applications and use cases are being thought up and developed each day.