Blockchain — the technology that underpins popular cryptocurrencies such as Bitcoin and Ethereum — has been touted as revolutionary by a host of industry and market leaders, including tech giants Microsoft, Amazon, and IBM. While blockchains were initially only used to record digital currency transactions, several non-currency and non-financial applications have emerged within the past few years.
Consequently, a growing number of companies, including the likes of Walmart and Samsung, are making massive investments in blockchain technology. In a study conducted by professional services firm, PwC, 84% of surveyed executives said that their organizations had experimented with the technology to at least a certain degree. Statista, meanwhile, estimated that global spending on blockchain-related applications will grow from $1.5 billion in 2018 to a whopping $11.7 billion in 2022.
In the following sections of this article, we take a look at what blockchain technology excels at and how entire industries are now realizing its true potential.
A blockchain system or network offers a way for information to be distributed in a completely decentralized manner. Blockchains offer a high degree of transparency since stored data can be read and interpreted by all participants, even in the complete absence of a trusted third party. Furthermore, records on the blockchain ledger are immutable and cannot be modified or changed by another party in the future.
As a result, fraud prevention was one of the first non-financial use-cases of blockchain, and is still gaining ground in many industries. In Latin America, Chile’s Santiago Exchange expressed interest in leveraging the technology’s unique strengths to reduce instances of fraud, while simultaneously increasing efficiency and reducing costs.
Supply chain is yet another sector that could benefit greatly from increased transparency and efficiency. Existing systems in the industry rely heavily on human input, manual validation, and antiquated IT systems. With millions of tracking events logged each year, it is hard to keep track of malice, fraud, and errors. In a bid to solve this problem and improve traceability in the supply chain industry, IBM partnered with shipping giant, Maersk, in August 2018 to launch TradeLens, a “blockchain-enabled shipping solution designed to promote a more efficient and secure global trade.”
In a letter addressed to the Securities and Exchange Commission published in February 2019, American tech company, Apple, also suggested the use of blockchain technology to ensure that its mineral supply chain remains conflict-free and environmentally sustainable. By utilizing a blockchain-based smart contract, companies like Apple can ensure that goods are automatically checked for authenticity, quality, and sustainability before the supplier is paid.
When combined with other emerging technologies such as Internet of Things (IoT) and Artificial Intelligence (AI), blockchain has the potential to automate a significant portion of the supply chain industry. An array of IoT sensors, for instance, can help a retailer keep track of produce-related metrics such as temperature and humidity. Once logged onto a blockchain, this information can also be presented to the end customer, along with data related to harvest and transport. In fact, Walmart announced a trial program for a similar blockchain-based supply chain system roughly one year ago, in September 2018.
Smart Contracts and DApps
A smart contract is a programmable contract that automatically executes a task when a certain predefined condition is satisfied. While considered to be a big disruptor for many industries, smart contracts are perhaps most versatile in use cases such as insurance, where processing times range from weeks to months due to mandatory human intervention. With smart contracts, insurance providers can automatically approve claims related to well-documented events such as floods and travel delays or cancellations. All in all, the technology has the capability to disrupt the insurance sector by minimizing fraud, reducing expenditure, eliminating processing delays, and improving overall customer satisfaction.
Besides insurance, smart contracts have shown immense potential in a number of sectors, including governance, real estate, and fintech. Decentralized Applications (DApps), which use smart contracts to interface with a blockchain, have also risen in prominence of late, due to their intuitive nature and similarity to traditional web applications. The Alluva DApp, for example, helps financial analysts and investors sift through market noise and subjective opinions in the cryptocurrency and blockchain space. Alluva uses crowdsourced sentiment data to predict and identify viable investment opportunities.
Even now, many blockchain developers and evangelists believe that we have only scratched the surface of the technology’s full potential. Now that the public and private sectors have both taken interest in blockchain’s capabilities, it’s likely only a matter of time before the technology is near-ubiquitous.
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How Blockchain Technology Is Changing The World was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.