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Blockchain is no longer a buzzword and has developed permanent implementations across industries. In 2020, many industry leaders claimed blockchain as a top-five strategic priority and already increased investments in blockchain technologies. Based on Deloitte’s 2020 research, businesses view blockchain as a top priority, edging up to 55% of respondents (versus 53% in 2019 and 43% in 2018).
Blockchain’s maturation could be seen in the diverse responses of surveyed CEOs and the barriers they faced along with the distinguished benefits of blockchain. Such diversity of thought shows an enhanced sense of seriousness in considering the technology’s possibilities and limitations.
Imagine that sensitive data in healthcare or banking could be shared using the highest encryption and data protection levels to enhance service efficiency and quality.
Let’s dive deep into the future of blockchain, its dynamics, and how it can transform industries and shape the way businesses operate.
Blockchain is a distributed database that contains information about all transactions made by participants in the system. The information is stored as a chain of blocks, and each block contains a certain number of transactions.
According to the Bank of England, blockchain is “a technology that allows people who do not know each other to trust and share a record of events”. It is impossible to covertly tamper with the data within this system, which is why it has been found to be corruption-resistant.
As blockchain technology evolves, organizations in almost every industry are investigating how to seize new opportunities. This part of the article will cover promising and disruptive examples of blockchain use cases and examine how these can inform future courses.
Let’s review blockchain markets use cases by industry vertical and its potential for the market.
The banking industry is one of the most sensitive and attackable fields. Therefore it requires high-security measures, and blockchain can eradicate the risk of fraud in all areas of banking. Moreover, it enables faster cross-border transactions, ensures compliance, and simplifies auditing and reporting processes.
Here are some examples.
Once data is placed into the blockchain, it cannot be changed, making the blockchain inherently secure. Since multiple users store the data, it is hard to deactivate or hack into, and data can be viewed by any system user, increasing transparency between users. The distributed nature of the network ensures that blockchain technology has no central point of failure and is more resilient to attacks. Blockchain uses unique digital signatures based on public and private decryption ciphers to exchange transaction values, subject to strict cryptographic rules, reducing the risk of fraud.
Blockchain eliminates the need for intermediaries, drastically reducing settlement time of global, cross-border transactions from days to seconds, saving cost and reducing risk. Moreover, it can solve issues such as transparency and traceability of worldwide transfers.
For instance, in 2018, Banco Santander launched the world’s first blockchain-based money transfer service that enables customers to make same/next-day cross-border transfers. Through automation of the entire process, Santander has decreased the number of go-betweens, making the process more efficient.
Experts think that the technology will simplify compliance and traditional double-entry bookkeeping systems. Instead of storing separate records based on transaction receipts, companies can add transactions straight into a joint register where all entries will be distributed. As a consequence, the records will become more transparent and secure.
Blockchain can also be beneficial for accounting and auditing because it significantly minimizes human error and ensures the integrity of the records. Accounting has been a relatively leisurely area to digitize due to strict regulatory requirements regarding data integrity and validity, which is why accounting is likely another area that blockchain can transform.
P2P payment services such as Venmo and Google Pay are convenient, but they have limitations—some restrict transactions based on location or set limitations for transferring funds. And what’s more important, many of them are vulnerable to hackers that threaten customers’ information integrity. Blockchain can fix those pitfalls, ensuring high-level security.
Traditional banking institutions approve loans by using a system of credit reporting. To get all the needed information such as credit score and any violations, they inquire reports from specialized credit agencies—in the U.S, it’s only three. Such centralized systems storing such sensitive information within a small number of institutions make it very vulnerable. For instance, Equifax has hacked last year and the credit information of over 145 million users was exposed.
Blockchain P2P loan trends guarantee a faster, more secure, and cheaper way of processing loan applications.
Blockchain applications enable better efficiency, streamline processes, and boost high-level security and transparency in the insurance field.
A smart contract is a set of digitally described promises, including a set of protocols by which parties fulfill their agreements.
Decentralized blockchain-based systems are environments in which the execution of a smart contract is independent of a third party and its code cannot be arbitrarily changed. Outside of such an environment, a smart contract would just be software code.
Smart contracts can completely replace the claims process and save time on verifying. There is no need for other documents with blockchain, only predetermined rules to resolve claims, resulting in faster processes, enhanced efficiency, and decreased costs.
According to the FBI, the total cost of non-health insurance fraud is more than $40 billion per year. Blockchain can be used as a distributed registry of data to validate the authenticity of documents, check for police theft claims history, and identify patterns of fraudulent behavior related to a specific identity.
Blockchain-specific applications empower the insurance industry exceeding traditional database solutions and current forms of cooperation. Enhanced transparency will decrease and even eliminate fraud cases since anyone can view transactions logged in a blockchain database.
Blockchain’s unchangeable ledger allows for real-time tracking of goods during the supply chain. Companies can queue up events with a supply chain—for example, allocating products newly arrived at a port to different shipping containers.
For instance, it is estimated that there are over 500,000 trucking companies in the US alone. Such a huge amount of stakeholders involved in the supply chain frequently creates low transparency, non-standardized processes, and mixed levels of technology adoption. Inherent security mechanisms of blockchain technology can assist in overcoming these pitfalls and achieve tangible gains in process efficiency.
“An incorruptible record of where a diamond was sourced, its supply chain and its certification, could eradicate counterfeiting and the proliferation of blood diamonds.”Graham Richter, managing director at Accenture Technology.
“An incorruptible record of where a diamond was sourced, its supply chain and its certification, could eradicate counterfeiting and the proliferation of blood diamonds.”
Data sharing and tracking across the supply chain could increase transparency, predictability of logistics operations, and cost savings by powering error-free processes.
In healthcare, where data is often stored in silos and security is pre-eminent, blockchain has enormous potential for private and secure deployment. The current blockchain trend is serving the healthcare industry in many ways—better supply chains, resolving drug counterfeiting, and enhanced data storage and security.
Blockchain can use general health data like age, gender, and prior medical history to identify a particular patient on a shared blockchain that numerous individuals could access without undue privacy concerns. When health institutions need to know more about a patient’s medical history, it’s impossible to do so without contacting their previous care provider. Such a process takes some time and often results in slips due to human error.
Recently, New York Governor Andrew Cuomo announced a pilot program to test an IBM blockchain-based application called IBM Digital Health Pass to store vaccination data and confirm COVID-19 test results. The blockchain-based app will allow people to share their medical data through an encrypted digital wallet securely stored on their smartphones.
The wide range of blockchain solutions includes clinical trial results, health records storing, pharmaceutical serialization, and more. Blockchain trends can help solve operational hurdles such as interoperability, compliance, and secure data exchange for EHRs, and enable business models, cultivating personalized medicine and high-level clinical research.
Media organizations have already started adopting blockchain technology to eliminate fraud, reduce costs, and reduce intellectual property theft. MarketWatch predicts that the global market for blockchain in media and entertainment will reach $1.54 billion by 2024.
Blockchain can also facilitate the distribution of provedly scarce digital collectibles by using tokens in the economy. Artists can control their content licensing and eliminate likely illegitimate third parties. Creators can record transactions of a distinct asset, instantly transfer ownership, and manage smart contracts.
Governments are responsible for individuals’ records such as birth/death dates, marital status, or property alterations that are very difficult to manage. Even nowadays, some of these records only exist in paper form and require citizens to visit government offices to make changes, which is time-consuming and unnecessary. Digitizing most data using blockchain technology will dramatically reduce maintenance costs, lower data processing time, and ensure data integrity.
Blockchain technology trends could simplify recordkeeping and identity management and prevent fraud. Blockchain tech experts claim that people would only need to provide the minimum (date of birth, e.g.) to prove their identities with enough information on the blockchain.
One of the examples is making the voting process more accessible and ensuring top-level security. Even if hackers could get access to the blockchain terminal, they wouldn’t harm other nodes. Each vote can be connected to one ID, and without the ability to create a fake one, government executives could count votes more efficiently.
As with many emerging technologies, there are some challenges that organizations need to overcome before blockchain can reach far and wide adoption across industries:
As with any technological innovation, blockchain will need to mature enough before entering the market, following the slow trajectory of adoption over the following years. Although there are many opportunities, it will still take some time to eliminate existing challenges and use them as benefits.
Blockchain markets are starting to emerge from its initial deployments in crypto and is expected to reshape almost all industries significantly.
In 2021, new blockchain-inspired business models will enable diverse organizations to approach decision-making more efficiently. These models will help to standardize data from various sources and obtain more robust data sets. According to IBM Institute of Business Value, almost sixty-eight percent of CTOs and CIOs assume a scalable governance model for synergies across blockchain networks to be a vital piece of their organization’s blockchain ecosystem in the following years.
“We believe that blockchain technology will be transformative in the tech and IT sector in the coming years, similar to what the internet did for the world back in the 90s and early 2000s.” John Zanni, President of the Acronis Foundation, in Forbes.
“We believe that blockchain technology will be transformative in the tech and IT sector in the coming years, similar to what the internet did for the world back in the 90s and early 2000s.”
While blockchain still has various challenges to overcome, NIX has vast expertise in implementing blockchain technology based on the clients’ precise needs and requirements. We can draft the most suitable blockchain solution for your business and ensure its smooth adoption.
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