If your business has not gone digital or you haven’t heard of Blockchain technology, you are probably living under a rock that has not yet been hit by the storm. Blockchain is one of the most disruptive technologies today, which has the potential to change our lives for better. With any new technology, there are insecurities among people, and early adopters are to benefit here. This benefit is because they know more about the technology and can leverage this to catapult their business to unprecedented success.
Bitcoin was the word that put Blockchain on the lips of the common man. As you might know, Bitcoin is a cryptocurrency, a digital currency which is not controlled centrally, because everyone collectively controls it. Because it is not controlled by any government and chances of duplicity and fraud happening in a bitcoin transaction was mere to none. The cryptocurrency gained huge momentum, and its value was once pegged at $1000. But, more interesting than Bitcoin is the technology behind it, Blockchain.
In the Blockchain technology, a ledger records all the transactions between all stakeholders. The benefit of Blockchain technology is that the ledger is permanent (cannot be altered or deleted or overwritten), open (anyone in the system can view it) and distributed (every computer in the network has a copy of the ledger). For example- In bitcoin, whenever someone transfers 100 bitcoins to your account, the ledger which is maintaining the bitcoin transactions between the two of you would be automatically updated in a decentralized bitcoin transaction chain, with a time-stamp.
The remaining balance of bitcoins in both of your accounts would also be updated simultaneously, and all these transactions are verified by thousands of bitcoin “miners” spread across the world.
The bitcoin mining software which is installed into these mining computers verifies a “private” key which is a secret set of 64 characters, numbers and symbols which is sent by both the sending and receiving wallets. The private key is not visible to anyone and is securely stored in the bitcoin wallet of the user.
Once verified the mining software adds “blocks” containing the details of the transaction to the ledger. Thus, an entire chain of time-stamped blocks is created, and no-one can delete it. Apart from this, no user can add consecutive blocks to the ledger, and this blocks another point of rigging the system.
Hundreds of startup are experimenting with the Blockchain technology in various industries and sectors, ranging from government records, bank transactions to health records.
Let us explore the various areas where Blockchain has the potential to change our future for good.
Banking and Finance Sector
Big banks like JP Morgan Chase, Citigroup, Barclays, Wells Fargo are slowly but surely waking up to the power of Blockchain technology. They are future-proofing themselves by investing millions of dollars in developing their Blockchain-based systems. JP Morgan Chase has developed a new Blockchain-based system which would speed up the transaction times by reducing the number of parties involved in verifying a transaction. The Intercontinental Exchange, a company which owns the world-famous New York Stock Exchange, has invested in Blockchain technology. The Blockchain technology can prove to be a boon for the Banking and financial sector, as it gives an impregnable level of security and a high level of transparency in financial transactions.
Financial institutions are mulling over adopting Blockchain for updating the KYC details of the customer. As the record in a Blockchain system is transparent and irreversible, uploading KYC details in a shared ledger through which an independent verification of KYC documents once done by one bank can be accessed by other banks, thus eliminating the need for re-verification of KYC documents.
Logistics and transportation is another potential area which stands to benefit from Blockchain technology. There is a major communication problem in the international logistics industry with multiple stakeholders like carriers, forwarders, agents, terminals, haulers, shippers, customs officials involved in the process. It is a headache to keep track of the package without the intervention of computers. The application of Blockchain in the documentation process of shipping and logistics can help in increasing efficiency and in reducing the costs. Companies like Everledger are changing the paradigms of doing business in the diamond industry by leveraging the power of Blockchain technology. Everledger ensures that each point of transaction right from mining to retail sales of the diamond is electronically verified in an open ledger. In this manner, customers can be sure that they are buying real diamonds from conflict-free areas.
According to an estimate, around $140 billion are tied up in the transport sector. Using Blockchain in transportation could improve the clearance of dues.
The real estate sector has been technologically averse, traditionally but with the onset of Blockchain technology, this scenario is bound to change. Paper records can be tampered, while tampering a Blockchain record, is next to impossible. Taking advantage of this feature, the entire process of record-keeping in real estate can be shifted to a Blockchain-based system. This would ensure that there is no fraudulent transaction in the process. The cost of documentation would be drastically reduced with various intermediaries like the title companies and real estate lawyers being replaced with smart contracts at some places. These smart contracts are executed once all the conditions of the transaction are met, leading to a rule-based system which is protected from Human errors.
Another potential application of Blockchain in Real Estate would be using Blockchain in conducting online property searches. Many times it is seen that in third Party real estate platforms like Zillow, the property listed on the website is sold, but the information has not been updated on the website. To eliminate this issue Blockchain can be integrated into such applications, creating a shared ledger of properties with all the details like price sold, date sold, the names of the buyer and seller. This would ensure accuracy in the data regarding properties. An online real estate platform called Imbrex is using Blockchain in this manner.
Governments all across the world have been plagued with corruptions scandals since time immemorial. Blockchain has the potential to stop this by introducing a public ledger for all the government services. For example, the bidding for a government contract can be recorded in a Blockchain to prevent corruption. Governments of countries like Estonia, Georgia, and Sweden have started experimenting with Blockchain technology by introducing it in their land record management. The distrust among the public decreases when the record is un-alterable and open for all.
The security of data in government organizations can be increased by implementing Blockchain. Governments are large holders of data and hence are the prime target for hackers. Applying Blockchain, the failure points of data can be distributed, therefore eliminating the chance of a large scale data breach. Agencies such as the Department of Homeland security in the U.S.A are investing millions into Blockchain technology.
There is a thriving market for fake drugs worth $30 billion all over the world. Counterfeit drugs are a menace that threatens to kill the Pharma industry. There is an unprecedented rise in the number of pharmaceutical crime-related incidents.
(Image courtesy: https://www.raconteur.net/business-innovation/counterfeit-medicines-killing-people-and-brands)
If we have a supply chain system of pharmaceutical products which is based upon the Blockchain technology, then this problem of counterfeit drugs can be tackled effectively. Using
Blockchain technology can be implemented in drug trials. Applying Blockchain technology, the drug trials can be expedited, leading to shorter drug discovery cycles. Around 6 in 10 big Pharma companies have already started experimenting with Blockchain. When you use Blockchain, the data security of participants is ensured, which means that more people would be interested in participating in clinical trials by providing their data.
Companies like Medileger are already building industry-owned blockchains for the pharmaceutical sector.
Uganda is using Blockchain technology to track counterfeit drugs.
With the rapidly changing technology and business environments, it has become inevitable for the businesses to be on their toes. Thus, data securing becomes an important aspect, and including Blockchain technology is a must. It can be used in various industries and sectors right from the government to private. Blockchain will form a digital ledger that will be used in recording all the transactions in secured blocks.