While many people associate blockchain technology with cryptocurrency and bitcoin, its applications go far beyond that. With the ability to create transparency, fairness, and efficiency, blockchain is impacting various sectors in several ways.
For example, blockchain can be used to enforce contracts and automate government work. It's core characteristics - decentralization, transparency, automation, and immutability- make it a versatile tool that can be applied to various industries. The following are the most relevant blockchain use cases for enterprises, institutions, and governments as we see them.
Common Blockchain Use Cases:
Blockchain has a wide range of potential applications, some of which are already being explored and others which have yet to be discovered. Here is an overview of nine of the most significant blockchain applications being explored:
- Supply Chain Management
Supply chain management is a process of managing the flow of goods from the point of origin to their final destination. Blockchain could play an important role in supply chain management as it can help solve problems such as:
- Transparency: Blockchain provides transparency at all levels of the chain, with which transactions can be verified by anyone with access to them. This reduces fraud and counterfeiting because everyone involved in the chain knows who owns what, when they received it and where they are going with it.
- Reduced Costs: Blockchain provides data security through encryption technology which makes it harder for hackers to access sensitive information such as shipping documents or product codes without permission or authorization from authorized parties such as customers or suppliers. This reduces costs associated with data theft and more.
Blockchain can potentially reduce insurance claims fraud and speed up the claims assessment process. By securely streamlining data verification, claims processing, and disbursement, blockchain can significantly reduce processing time.
- Smart Contract
Smart contracts are self-executing pieces of code that can be used to create peer-to-peer transactions. They are executed on the blockchain and are self-enforcing, meaning they cannot be altered or modified without the agreement of all parties involved.
Smart contracts also ensure smooth workflow in DAOs. A DAO, an acronym for Decentralized Autonomous Organization, is set up to raise and manage funds with its treasury for a specific purpose that can be charitable or commercial in the cryptocurrency space. Its organization is governed by smart contracts and blockchain technology to provide them with transparency, immutability, autonomy, and security.
Smart contracts can be created for anything you can think of, from property ownership to medical records to employment agreements. The beauty of smart contracts is that they do not require human intervention to execute, which means there is no risk of human error or fraud. Smart contracts also have an immutable ledger that cannot be altered or deleted, so they cannot be hacked or tampered with by malicious actors.
- Digital Identity
A digital identity system that uses blockchain technology provides a secure infrastructure that has many benefits for enterprises, users, and management systems for the internet of things. This solution can protect against theft and give individuals more control over their data.
Blockchain technology has the potential to revolutionize several industries that rely on the internet of things, including:
The supply chain: With blockchain, businesses would be able to track the location of their products as they are shipped and ensure that they remain within specified conditions.
Asset tracking: Blockchain-based asset tracking would allow businesses to monitor their assets and machinery, recording activity and output as an alternative to cloud solutions.
Decentralized finance (DeFi) is one of the most promising use cases of blockchain in finance. It allows users to exchange assets without having to trust a third party.
For example, if you want to send money from one country to another, you usually do this via a bank transfer or by using an online money service such as PayPal or Wise. But these centralized services are not immune to fraud, which can lead to extreme fees and delays in international transfers, especially for smaller amounts of money.
Decentralized exchanges allow users to trade assets without dealing with these intermediaries. They also offer lower fees than traditional exchanges and enable more secure and private transactions.
- Equity and Currency Trading
Decentralized exchanges (DEXs), which work in a similar way to smart contracts by functioning autonomously without a centralized party managing them, have been gaining an immense amount of trading volume recently.
This shift could one day revolutionize the way people buy, sell, and trade assets of all kinds, as DEXs, allow individuals to come together and trade cryptocurrencies, equities, and other assets directly with one another.
- Media & Entertainment
The illegal copying, distribution, and use of digital content costs the entertainment industry billions of dollars each year. Blockchain technology can help track the life cycle of digital content, making it easier to identify and protect against piracy and fraud. This could potentially help to distribute authentic digital collectibles more securely.
The healthcare industry is one of the most innovative industries in the world, so it should be no surprise that blockchain technology has already found its way into this sector. Many companies have been moving medical record-keeping to the digital realm for years. Blockchain has the potential to make patient records even more secure by making them tamper-proof. Some companies are exploring the possibility of sharing healthcare data in a private way, yet both parties can verify it as accurate.
- Real Estate
Real estate has become a hot topic in the blockchain space. As the industry moves towards automation and optimization, there’s an increasing demand for solutions that help to manage real estate data.
Real estate agents are using blockchain to manage their client base, protect against fraud and make buying and selling transactions more efficient.
Blockchain technology can also help real estate agents track property ownership, collect taxes and even help them manage their clients’ properties remotely.
Blockchain technology has the potential not only to execute energy supply transactions, but also to serve as the foundation for metering, billing, and clearing processes, according to PWC. Other areas where you can use blockchain include managing assets, documenting ownership, and more.
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Blockchain has come a long way since being introduced to the world as the revolutionary backbone of Bitcoin, nearly 12 years ago. The demand for blockchain is higher than ever, and with that more and more industries are looking to integrate the technology. This has led to a number of different use cases for blockchain, with almost every industry trying to figure out how it can be used for their own goals.