Blockchain Use Cases & Potential
Blockchain Use Cases and Potential
Blockchain has the potential to transform virtually every industry. Distributed ledger technology holds immense potential for improving efficiency, providing real-time information, and reducing costs—in many cases, due to streamlining operations and removing intermediaries. Businesses can unlock new business models through untapped markets and digital assets, improve business network accountability, and modernize/ digitize outdated systems that are slow and susceptible to risk and fraud.
This list is by no means exhaustive, but can give you a glimpse into how others across various industries are already using blockchain.
Banking and Capital Markets: Blockchain enables banks to transact directly, reducing friction for settlement. The nature of blockchain’s distributed and immutable ledger also simplifies regulatory reporting for government agencies and auditors.
Supply Chain: Blockchain networks create a shared IT infrastructure, streamlining workflows for stakeholders along the supply chain. It provides transparency, traceability and accountability of goods and commodities from provenance to point of consumption. Read more about how blockchain can improve your supply chain in this blog.
Media and Entertainment: Reduce piracy of intellectual property, protect digital content, and enable the distribution of provably scarce digital collectibles through token economy use cases.
Energy: Blockchain can significantly reduce costs associated with the oil and gas commodity marketplace. Combined with IoT devices, a blockchain-enabled power grid could automate billing and settlement, clear payments in real time, and reduce utility costs. It also opens new markets for peer-to-peer energy trading.
Commodities and Letters of Credit: The commodity trade finance industry is plagued by inefficiencies due to fraud-prone, paper-based processes that have been around for years. Rapid globalization outpaced the sector’s ability to standardize and digitize its system of record-keeping and operations. Furthermore, compliance requirements reduced operating margins and left stakeholders waiting weeks or months for payment. These antiquated processes are deeply embedded and complex due to the number of participants, hindering innovation for the entire industry and causing massive losses in income and opportunity.
Blockchain can serve as a secure, streamlined, and paperless platform on which only authorized parties — banks, commodity traders, inspection companies, and governments — can exchange data and transaction records.
Take, for instance, komgo: Comprised of 15 of the world’s largest institutions including international banks, traders, energy majors, and a certification company, komgo successfully leveraged blockchain to transform global trade finance on a blockchain-based platform. komgo: Catalyzing the Global Trade and Commodities Finance Network with Blockchain
Telecommunications and Communication Service Providers (CSPs): Due to high competition in an increasingly demanding digital world from infrastructure providers, paired with decreasing revenues from voice and increasing costs of bandwidth needs, CSPs need to both reduce costs and find new sources of revenue.
The greatest potential for blockchain in this sector lies in improving core management systems and new services. Fraud management, identity-as-a-service, 5G enablement, data management, and secure IoT connectivity are prime examples of blockchain’s potential.
Healthcare: Blockchain-based data sovereignty and permissioned exchange scenarios will lead to better, faster, and cost-effective medical discoveries, while advancements in medical data management will result in more competent patient care. Blockchain technology not only solves healthcare’s operational challenges such as interoperability, compliance and secure data exchange for EHRs, but also enables new patient-centric business models, fostering personalized medicine and advanced clinical research.
It’s no secret that healthcare organizations run on many complex, data-intensive processes, often performed by covered entities who handle data and trust mechanisms; blockchain can simplify and automate these processes—in many cases, from months to days—and offers a single, immutable source of truth that can easily and securely be accessed, updated, shared and audited.
Real Estate: Smart contracts can be used to remove middlemen, automate rental payments, or transfer title deeds. Tokenization can be used to fractionalize properties, unlocking capital and providing more people access to real estate assets who may otherwise not be able to afford it.
Government: Encrypted ledger and smart contracts can help government agencies to reduce paper load, document processing time, and duplication errors.
Is Blockchain Suitable for my Business Objective?
Consider the following when determining if blockchain is suitable for your business needs:
- Are there multiple entities that need to collaborate to do business together? (Although you can use blockchain solely for your own organization, the value of blockchain increases as more participants are added into your business network.)
- Are there any areas of your business that rely on trust agents or a centralized authority to act as an intermediary? (Blockchain is ideal for those who are trying to remove middlemen from their business processes.)
- Is there a lack of trust in your processes or transactions?
- Do you need a traceable, auditable and verifiable tracking mechanism for your assets?
- Are there parts of your business operations that can be automated and placed in a smart contract to be executed without the need for a manual, human touch?