There are countless possibilities for blockchain use cases and applications, from streamlining international payments to improving transparency. It is more than just cryptocurrencies and bitcoins.
Initially designed for cryptocurrency, blockchain technology has evolved significantly, transforming various industries, such as finance, healthcare, business, and government. By 2024, global spending on blockchain technology is expected to reach $19 billion.
Blockchain does not require a centralised authority to manage it. All nodes on the network can verify the data stored in the general ledger. It's highly secure, and there is no room for the attacker.
It's one of the most revolutionary tools of the 21st century, providing a tamper-resistant ledger that all industries can benefit from. In this post, we will wrap up some blockchain use cases.
Types of Blockchain
IBM explains that blockchain is a secure, shared ledger that enables businesses to record transactions and track assets. It functions like an immutable and encrypted database that can manage tangible and intangible assets. This technology can track all valuables and reduce the risk of attack.
There are four types of blockchain networks: private, public, hybrid and consortium/federal.
- Public Blockchain: Open to everyone and require significant computing power.
- Private Blockchain: Decentralised, peer-to-peer networks that businesses can host on-premises.
- Hybrid Blockchain: It’s controlled by a specific organisation but accessible to the public with a licence.
- Consortium Blockchain: It’s suitable for businesses as organisations can determine who can access data.
Benefits of Blockchain
1. Security
Blockchain helps prevent fraud and unauthorised activity with immutable records. It allows anonymising personal data, so it requires permission to access it. Data information is stored on computer networks making it difficult to hack. Data is important and sensitive, and the blockchain can secure it.
2. Transparency
With blockchain technology, every database and transaction is detailed on a distributed ledger. All network participants who have access can see the information. Also, it enables members to view the entire transaction history.
3. Instant Traceability
Blockchain technology creates an audit trail that records an asset's origin and journey. It delivers proof of authenticity and reduces the risk of fraud. Instant traceability is especially useful for counterfeit-prone industries.
4. Efficiency and Speed
Traditional is synonymous with paper, time and human error. Blockchain technology streamlines the transaction quickly and efficiently. It eliminates the need for paper exchange and ledger reconciliation.
5. Automation
Smart contracts can automate and increase efficiency. In traditional processes, it requires a third party to verify. Smart contracts reduce human intervention and dependency on third parties.
Blockchain Use Cases in Banking and Finance
Blockchain technology has great potential in financial services. It can make payments more efficient and provide a sense of security.
1. Capital Markets
McKinsey identifies that blockchain technology can offer solutions on capital markets, such as clearing and settlement, consolidated audits, and operational improvements. Besides that, it also benefits issuers, fund managers, and investors.
- For Issuer: Blockchain allows easier, cheaper and faster access to capital through digital securities. New securities can be issued in minutes after rights and obligations are met, allowing issuers to increase event funding velocity.
- Fund Manager: Blockchain enables peer-to-peer trading of any asset on a verifiable ledger, which helps complete clearing more quickly and transparently. The ability to issue digital assets creates a broader investor comfortable with digital assets.
- Investors: Blockchain technology reduces barriers to issuing new financial assets and products. Since costs are lower and the issuance process is faster, issuers can adapt new instruments to meet investors' needs.
2. International Payments
Blockchain technology can securely and efficiently track international payments.
In 2018, Santander Bank launched "Santander One Pay FX", the world's first blockchain-based money transfer service. It enables customers to make same-day international transactions. Santander automates the entire process on the blockchain and reduces the number of intermediaries in transactions.
3. Money Laundering Protection
The public ledger can monitor, validate and record a complete transaction history, immediately blocking unverified transaction phases. Its encryption of the blockchain also helps against money laundering. Also supports KYC (Know Your Customer), whereby businesses identify and verify clients' identities.
4. Insurance
IBM Blockchain Platform and the American Association of Insurance Services are building a network to automate insurance reporting and simplify compliance requirements. This technology, built through smart contracts, enables customers to manage insurance claims transparently and safely.
Blockchain in the Government and Public Sectors
In a blockchain-based government, individuals, governments and businesses share resources through a distributed ledger. This structure protects the sensitive data of citizens and governments.
1. Smart Cities
Governments can use technology, IoT, cloud computing and blockchain. Blockchain provides a mechanism to create a secure infrastructure to manage these functions. Specifically, enabling all smart city functions to operate securely and with interoperability.
2. Transparent Budgeting
How good it is to live in a world without corruption. But, Data from Corruption Perceptions Index shows that two-thirds of countries have high levels of corruption. However, blockchain technology can help promote transparency in government budgeting decisions. It allows communities to access data and hold governments accountable for their actions fully.
3. Digital Voting
The New York Times revealed that blockchain technology has the prospect of cutting millions of red tape yearly. Blockchain technology can decentralise the electoral voting process to be safe and transparent.
A startup called FollowMyVote uses blockchain technology to ensure a platform that allows for transparent online voting.
Blockchain Applications in Business
Many industries and businesses are also adopting blockchain technology. Here are some examples of its implementation:
1. Healthcare
One of the initial uses of blockchain was to reduce costs in healthcare, improve access to information, and streamline business workflows. The main challenge in healthcare is data silos, but blockchain can connect those silos.
By using blockchain, patient data can be securely stored and shared across laboratories, hospitals, pharmacies, doctors, and nurses. The technology will identify errors and improve the transparency and efficiency of data sharing. An example is Estonian X-Road Solution, which links various information systems and services.
2. Real Estate
HomeInsight revealed that the landlord sells their house every five to seven years, and people move 11.7 times during their lifetime. With its fast movement, blockchain is definitely helpful in the real estate market.
One benefit is that it allows anonymous data to be used in property investment evaluations. All parties involved in a transaction can transparently access the data. What's more, the property buying process will be streamlined and reduce costs and human errors.
3. Media
MarketWatch showed that the global media and entertainment market using blockchain is expected to reach $1.54 billion in 2024. The technology is mainly used to protect intellectual property rights and prevent fraud.
In 2019, Eluvio launched Content Fabric which uses blockchain to distribute and manage premium videos to consumers and business partners without a delivery network.
4. Retail & eCommerce
The Ethereum virtual machine is the most common blockchain technology used in eCommerce. It provides safer, faster and cost-effective online transactions. Plus, its immutability ensures that manufacturers and retailers get exact and sure prices and prevent substitution or selling at a higher price.
5. NFT Marketplace
NFTs (Non-Fungible Tokens) are the newest and hottest blockchain applications. They are unique anti-counterfeit tokens as proof of digital, physical and intellectual property ownership. NFTs allow consumers to own digital moments and cultural arts that last longer.
Conclusion
Blockchain technology is versatile and impactful, with potential applications across many industries. As a result, many startups and industries are taking advantage of this technology. This demonstrates the significant influence of blockchain on various businesses.
