5 Applications of Blockchain Technology
Humans have always been in search of creative innovations to improve the lives of mankind. Though we have undeniably advanced greatly, when we look back at history, we shall never forget all the failed innovations that got crushed by the wheel of time. Think about Napster, VCR players, and all the products or technology that are either long gone or were never able to reach the masses.
With the growing interests and hype in recent years, will blockchain join the list and be just another flop or is it a real game-changer that’s here to stay, like the Internet?
What Is Blockchain?
Blockchain is a growing list of records made up of “blocks”. Each block carries the relevant information, timestamp and a digital signature. They are broadcasted to the network and verified by network nodes in order to be officially added to the chain of blocks.
Every blockchain has its own specification. The most widely known form would be the Bitcoin Blockchain, which is a permissionless, irreversible and inerasable blockchain. It is completely transparent and publicly accessible on the Internet. Once a block is added to the blockchain, it cannot be changed nor removed, making it tamper-proof and immune to malicious activities. Since it is decentralized and all data are identical across the network, it carries no single point of failure and will not be controlled by any single party.
But how can these features be applied to different sectors and how can different industries reap the benefits of blockchain technology?
Applications of Blockchain
1. Financial Services
45% of financial services organizations suffer from economic crime every year, compared to only 34% across other industries. One of the key reasons is that most corporations rely on a centralized database. Once a weak point is breached, the whole system could be compromised. By keeping the identical version of truth across the network, blockchain eliminates the single point of failure. Even if one of the data sets is jeopardized, the records are kept intact and free from contamination. Fraud could be greatly reduced if information and data are preserved accurately.
The permanent and unchangeable feature of blockchain can be useful when applied to storing medical records. Blockchain can be permissioned to allow only authorized parties to access the complete medical history of a patient, which could come in handy for designing better treatment. It helps reduce situations where allergies or diseases are overlooked when the doctors are prescribing medicines. Blockchain also enables claim adjudication to be automated, eliminating the need for intermediaries and thus cutting costs.
3. Public Sector
Blockchain enhances the accuracy and efficiency of record-keeping in the public sector. Data management is especially important when it comes to government registries. Land ownership, voting rights, birth records and more are all documented and stored in the government system. With blockchain, one’s digital identity is securely stored and therefore could streamline the provision of government services. In light of the risks of cyber-attacks, Estonia has already started to incorporate blockchain technology to its e-Residency project.
4. Supply Chain
Supply chain management largely involves negotiation and liaison among companies. Since each company relies on its own database system, it is often difficult and time-consuming to reach a consensus. Maintaining a completely transparent and traceable blockchain could help the industry in streamlining logistics, enhancing inventory management, reducing friction and errors, and improving trust between partners. IBM and Maersk, one of the largest container ship operators in the world, have already partnered to incorporate a distributed and permission blockchain platform to handle workflows and exchange data.
5. Internet of Things (IoT)
The growth of the Internet of Things (IoT) has brought about a lot of concerns regarding security and privacy. Due to the fact that more and more smart devices are being interconnected, the stake at hand is greater than ever. Backed by cryptographic encryption and algorithm, data stored on a blockchain enjoys high resistance to data tampering. It allows more efficient data sharing and storing, and thus can maximize the potential of IoT.
The above applications are just the tip of the iceberg. With blockchain technology, ledgers could become more reliable, transparent and efficient. Most, if not all, business sectors will be impacted one way or another. The blockchain is here, and it is here to stay. It is only a matter of time until we witness a mass adoption.
To learn more about how you can apply blockchain to your business, get in touch with us.