Blockchain technology, popularly connected to bitcoin and other cryptocurrencies, brings features to the software industry that businesses everywhere use on a daily basis. Every business wants to increase their profits, and one of the simplest ways of achieving that is by saving time or saving money on processes that are already in place. Blockchain is the technology that can help save time and in greater effect, save money.
By: Mrugakshee Palwe | Apr 3, 2020 | Modified Apr 10, 2020
Whether it be a large corporation, or a small to medium business, everyone benefits from utilizing some aspect of blockchain. If you have ever sold anything using a payment gateway, you have experienced the jumps money has to make before it gets to your bank account. In those jumps are the particularly famous transaction fees that merchants lose on every single transaction. This is possibly the first blockchain use case that businesses can get relief from – elimination of hefty transaction fees.
Besides several use cases in finance, blockchain is used in many other industries – Health Care, Real Estate, Supply Chain, Certificate and Compliance, and Oil and Gas, only to name a few.
It is a method to record information that uses cryptography, making it extremely difficult for bad actors to edit or delete any information that has been recorded. The popularity of the term arises from the way records are stored and chained to one another cryptographically, forming a chain of blocks. The more technical term for it is a “back linked list”.
For an in-depth read, check out this article explaining What is Blockchain? – Everything you Need to Know
Blockchain technology allows for enabling traceability, trusted insights, automation, and trust by eliminating third-party participation. Operations inside a business such as requiring a record of who did what when and where or knowing the life of a product from source to destination with a trust in the data gathered can all be implemented by adopting blockchain technology.
For accounting of goods, services, or finances, a daunting number of businesses still use pen and paper to keep a record of every transaction. For businesses that do maintain records digitally, like on an excel sheet, the task of auditing any particular chain of transactions becomes extremely difficult.
Blockchain by nature timestamps every event recorded on its digital ledger, making it extremely efficient to audit a transaction. Leveraging the aspect of immutability (the inability to edit or modify an existing record), it is very cost-effective to identify fraud.
As mentioned above, the nature of blockchain technology is to timestamp every event recorded. This way, all events are recorded in sequence of occurrence. A perfect example of this is gathering insights for a recall of goods. Currently, recalls are a nightmare for any industry since there is no elegant method to recall affected products. This problem can be solved by blockchain by giving more trusted insights to any business owner on their products.
In no regards is blockchain a be-all, end-all solution. It is something that can be adopted and implemented alongside a software already in place.
Some of the biggest companies to embrace blockchain are FedEx, Walmart, IBM, Mastercard, Pfizer, DHL, Maersk, Siemens, and many more. Let’s look at some examples:
Merck has launched a pilot to trace and track drugs from factory to patient furthering consumer trust in the origin of their meds.
FDA (Food and Drug Administration) announced a blockchain platform pilot in 2019 to track and trace pharmaceuticals targeting the problem of drug counterfeiting.
Walmart has launched two blockchain pilots focusing on the traceability of food.
FedEx’s blockchain interest comes from recoding the temperature, vibration levels, and many more details about transportation of goods to ensure tamper-proof delivery.
An aspect of blockchain called Tokenization is the biggest factor of using this technology in the real estate industry. Tokens are very similar to shares. While shares represent ownership in a company, tokens represent ownership in real estate.
Finexity is a platform that enables making small monetary investments in any real estate listed on their platform.
Estonia, Switzerland, Malta, China, are some the leading countries that have adopted blockchain technology into their government processes.
Estonia is the first country to establish a program that utilize blockchain to residency digitally.
China has announced their plans to move the entire country’s monetary policy on a blockchain-based system.
Yes! Currently, there exists a huge technological gap when it comes to the healthcare industry. Paper-based reports, records, requisitions, and prescriptions are still the predominantly used record keeping method. This, along with the lack of innovation in digital patient record keeping ultimately makes the healthcare industry inefficient considering current digital standards.
Blockchain technology enables traceability, immutability, and auditability of patient healthcare data, making the storage of patient data safe and compliant with regulations, as well as giving every patient the ability to have complete control and access to their data.
As mentioned above, companies like Merck and organizations like the FDA are working with blockchain technology to secure consumer trust in the provenance of drugs and other pharmaceuticals.
Downsides of using blockchain for business occur when the reasons for its use are flawed by nature. There are two aspects to this argument: implementing blockchain for the wrong reasons and incorrectly implementing blockchain.
In the crypto bubble of 2017, a lot of companies not only used the term blockchain to lure investors to buy into an illegitimate company, but also to increase name and fame when not one feature of the company used blockchain.
The chain in blockchain comes from usage of cryptography to achieve assurance of the secure record keeping of data.
One company used this feature to produce a chat application that records and transmits chat history using the blockchain, promoting extra security. This is an inefficient use of blockchain technology as the encryption techniques currently used when transmitting messages on chat applications works perfectly well. In other words, messaging encryption works fine and implementing a blockchain to handle security is an overly complicated and perhaps unnecessary solution.
The possibilities to use blockchain are limitless, in every industry. In most cases, it is an addition to an existing software, and in some cases, a replacement to an existing software system to increase efficiency.
An idea to get you thinking is implementing a distributed insurance scheme where a company isn’t in charge of deciding whether or not a payout is just, but instead a community of people, all of whom have the common interest of equalizing the fairness of payouts.
Blockchain is a technology that is ripe and ready for innovation and implementation. After reading this article, where would you use blockchain in your business?