We often receive questions about blockchain technology. The most common question being “what does blockchain mean for businesses?” In this article we’ll look at some well-known businesses already using blockchain technology. Then we’ll explore exciting blockchain use cases for 8 different industries.
Due to the craze of cryptocurrency, blockchain’s potential was never addressed in mainstream media. Many people remain confused about the role of blockchain in business. While many were caught up in the the cryptocurrency hype, large corporations invested millions into this new field.
What companies use blockchain technology?
Bank of China, Ford Motor Company, and even Nestle have invested in blockchain and are using blockchain technology in some form. Here is our list of some of the biggest brands that are using blockchain for unique purposes:
Facebook started investing in blockchain technology in 2016. It has since started developing its own cryptocurrency, acquired a blockchain startup, and softened its ban on blockchain ads. Facebook has also been aggressively hiring for blockchain positions.
- Ford Motor Company:
Last year Ford patented a new system to control traffic through car-to-car communications. “Cooperatively Managed Merge and Pass (CMMP)” will manage traffic by working around drivers’ behaviors which often lead to traffic jams.
Insurance company Prudential is working with Singapore-based telecom firm StarHub on a blockchain-based trade platform. Called Fasttrack Trade (FTT), it helps small and medium-sized enterprises to buy and track goods, make payments, and buy insurance.
While others are using blockchain to create services, Intel is focused on creating hardware better suited for blockchain applications.
This Russian bank is showing us what blockchain based corporate bonds will look like. Sberbank is launching its own blockchain lab focusing on smart contract-based corporate bonds.
These examples of blockchain use case are only a small percentage of the new business ventures that are possible. Let’s look at some of the most promising use cases of blockchain in different industries.
Blockchain is not just a way to avoid the government.
Blockchain has often been associated with anonymity and secrecy, and rarely associated with benefits to the government. It’s often perceived as a disruptive technology meant to avoid government oversight. However, you’d be surprised to know how many governments are exploring blockchain-based alternative approaches in place of conventional methods.
The distributed and decentralized nature of blockchain applications is perfect for many traditional government roles. Take Delaware for instance, where blockchain based incorporation services that would make business filing much more efficient are being tested. Taking this to another level, Dubai is planning to become the world’s first blockchain-powered government by 2020. According to the Smart Dubai initiative, the city will see up to 25.1 million man hours saved per year.
Companies around the world are expecting significant improvements in efficiency and reduction in costs with blockchain-based applications. Following are some of the major industries that will benefit from this technological shift.
1. Blockchain use cases for the healthcare industry
Healthcare as an industry stands to benefit most from blockchain integration. Here’s how:
- Identity Management:
A blockchain-based patient identification system would improve the most dangerous and toughest problems – mismatching patient health records.
- Data Protection:
The healthcare industry is often victim to the highest number of data breaches. This data includes confidential information of patients, physicians, and medical records. A decentralized system protects data from attacks or failure of local nodes. A blockchain based system will also make data-sharing between hospitals and patients safer and faster.
- Preventing Fraud:
Unfortunately, this issue is common in almost every industry (albeit with variations). In the healthcare industry, fraud often refers to falsified medical records, claims, and proof of work. However, a tamperproof ledger of hashes can solve this problem.
2. Blockchain use cases for the insurance industry
Blockchain technology stands to save billions of dollars for the insurance industry while improving billions of lives as well.
- Preventing Fraud:
The insurance industry loses $80 billion annually due to insurance fraud. No surprise then that almost everyone in the insurance industry employs different anti-fraud systems to prevent this. But so far, fraudsters have managed to breach these systems. Blockchain technology can improve anti-fraud systems through an immutable distributed ledger, shared information, and error-proof monitoring.
- Claims Processing:
Processing premiums and claims takes up most of the insurer’s time. This paperwork is where most errors are likely to occur. In 2016, over $1 trillion worth of premiums were processed. Billions of dollars in claims were rejected only to be accepted the second time filed. Using blockchain-based applications, information can be shared and updated safely, quickly, and without error. Not to mention the tons of paper and work hours saved.
- Improved Operational Efficiency:
The insurance industry involves hundreds of routine tasks that are being carried out manually – resulting in longer turnarounds and more mistakes. Blockchain can improve these processes by using computational power to replace routine manual tasks. This can drastically reduce the number of errors that cause billions of dollars of losses to all parties involved.
- Providing New Services:
Services like P2P Insurance, Microinsurance, On-Demand Insurance, Reinsurance, and Parametric Insurance are all developing at a much higher rate thanks to blockchain technology.
3. Blockchain use cases for the telecom industry
Traditionally, the telecom industry has been highly centralized with independent entities owning entire supply networks and bearing all the costs. With increasing more and more data being transferred daily, they’re seeing greater demand for improved infrastructure. This cuts into profit margins and increases costs for consumers. A decentralized way for telecom companies to share data, computational power, and infrastructure, will lead to a more sustainable and scalable business model.
- Improved Management:
Fraud prevention, network and customer management, reporting, and analytics are all areas that can be improved through cost reductions and efficiency gains.
- 5G Enablement:
The shift from 3G to 4G was expensive, and telecom companies still haven’t reached their expected return on this investment. But now in order to stay competitive, communication service providers are pushing competitive 5G services as soon as possible. Blockchain allows telcos to move away from the traditional client-server model, to a system of localized access nodes. This will result in faster, more reliable, and more competitive costs.
- New Sources of Revenue:
Identity-as-a-service, data management, IoT connectivity, and new partnerships that will become possible due to blockchain implementation. These are all additional sources of revenue for the telecom industry.
4. Blockchain use cases for the energy industry
The energy sector is already in the middle of a major technological shift, and Blockchain is playing a major role. According to EY, over 100 blockchain use cases have already been identified. Some of the biggest use cases being:
- P2P Energy Trading:
In 2016, New York residents used smart contracts to trade renewable energy on the public Ethereum Blockchain platform. Soon, most households may generate their own energy and use blockchain-based smart contracts to trade extra energy with others.
The United States loses $130 billion of energy every year due to long distance transmission. Microgrids aim to solve this problem by creating small, localized power stations that can execute energy transaction through a tamper-proof ledger.
- Regulation and Compliance:
The energy industry and the government spends billions to stay compliant and regulate business. The logistical and operational cost of this can be significantly cut down through blockchain based applications. This can eliminate data loss, inefficient use and sharing of information, and fraud.
5. Blockchain use cases for supply chains
According to IBM, blockchain implementation in supply chains can increase global trade volume by 15%. Most of these gains can be made in three areas:
Tracking is a major aspect in any supply chain. Blockchain-based tracking applications are perfect solution to this. The have the ability to process huge datasets, real-time data access, and faster data sharing. Walmart and Bext360 are two companies already using blockchain to trace their products.
Food safety and counterfeit goods pose a serious threat to health and cost trillions in lost jobs and revenue. Blockchain offers a verifiable and reliable method of authenticating goods and services as they travel the world. Blockchain implementation is already proving useful in automotive, pharmaceutical, and food supply chains already.
Middlemen and manual transaction cost $1.6 trillion every year and slow down the entire system. Blockchain-based companies like SecurCapital have developed a safer and faster alternative to automate inter-supply chain communications and operations.
6. Blockchain use cases for cybersecurity
With thousands of cyber attacks every year, cybersecurity is becoming more important. Traditional methods of using the web are becoming increasingly unsafe. An internet based on blockchain technology is fundamentally safer from cyber attacks. Redoing the entire internet right away isn’t feasible, but we can still implement blockchain technology to protect ourselves.
For instance, a distributed ledger can verify users and completely block unauthorized users. Decentralized databases and decentralized domain name systems make it harder for hackers to find a way to breach firewalls. A centralized system is much more vulnerable to attacks.
Blockchain was created to be reliable and verifiable which is the perfect foundation for cybersecurity applications.
7. Blockchain use cases for the retail industry
Many of the use cases that we’ve already mentioned above are also applicable to the retail industry. Smart contracts can be used to automate payments, unique hashes can be used to track and verify goods and prevent fraud. A real-world example of this is IBM’s TrustChain.
More unique use cases include a decentralized and improved customer relationship management platform. A decentralized ledger can also be used to monitor inventory changes, cash flow, and supply chain without mistakes.
8. How is blockchain used in finance?
Out of the many industries set to be impacted, the financial industry will likely see the biggest changes of all. In fact, it was for this industry blockchain was first created. After seeing the volatile nature of banks in 2008, the blockchain-based currency Bitcoin was created to stand independent from the global financial institutions.
There is a global effort underway to integrate blockchain technology into the financial industry to improve banking, rather than replacing it.
Blockchain Financial services
Traditionally, the finance industry has revolved around a centralized banking system. This can be slow, inefficient, and (as we witnessed in 2008), prone to regular collapse. Blockchain technology can revolutionize traditional financial services like clearing payments, POS systems, trading, and lending by removing layers of middlemen.
Blockchain use cases in fintech
One of the biggest signs of blockchain-based financial innovation is the change in how consumers and businesses make payments. Companies like Ripple and Airfox have been created to cater to this demand for faster and safer payments.
Platforms like ShoCard, BlockVerify, and Identifi are leading the charge in the field of identity and information validation. These digital identity systems help prevent identity fraud, makes ‘knowing your customer’ easier, and allows users to sign in without passwords. All this while still being safer than traditional methods.
Finally, there are also global micropayments. Blockchain-based applications like Sentbe and Abra offer a platform to send and receive money internationally with 60% lower fees than traditional methods.
Blockchain technology in banking
A bank’s main role in society is to store wealth and provide credit to those who need it. But according to the World Bank, over 1.7 billion people do not have access to credit products like loans and mortgages because they lack credit scores. This leads to banks losing around $380 billion every year in potential revenue. Platforms like Enigma, Bloom, and one developed by the Royal Bank of Canada are able to analyze data sources to create accurate credit scores.
Blockchain technology is also being used to create bookkeeping software, better loyalty programs, and auditing software. These products are more accurate, more reliable, and faster than incumbent options.
Blockchain use cases in capital markets
Trading and stock markets have always required a middleman to process transactions. This process often includes fees and increased processing time, creating delays to up to 3 days. However, that can change with blockchain powered platforms that will enable superfast and automated transactions.
Major stock exchanges have already started implementing blockchain technology, such as NASDAQ’s Linq blockchain ledger. Other examples include the Australian Stock Exchange working with Digital Asset Holdings, Japan Stock Exchange working with IBM, and the London Stock Exchange.
These new decentralized platforms will allow more opportunities for companies to raise capital as well as result in more investment opportunities.