Every time we hear the term ‘Blockchain,’ the first thing that comes to our mind is Bitcoin. We associate the word Blockchain with Crypto, but there is a difference: crypto is a part of blockchain but Blockchain is a wider concept. What Blockchain is used for is several other Web3 applications beyond cryptocurrencies, thanks to its numerous attributes and features.
You can think of crypto as a subset of the blockchain technology, a use–case for that matter. (Learn about the difference between Blockchain and Cryptocurrency in our previous post.)
However, before we dive deeper into the uses and what blockchain is used for other than crypto, let us spend some time understanding some inherent properties of Blockchain.
In simple words, Blockchain is a digital ledger that records transactions, a decentralized database storing information in digital format distributed over nodes of a computer network.
A lot of P2P payment apps have a limit on the amount of transfer or geographical limitations, but blockchain resolves all these issues. It eliminates the intermediaries and expedites the payment transfers, saving up on fees charged by banks and validating transactions swiftly.
There is no need for documentation as Blockchain eases cross-border transfers. You do not have to wait for a long time for the transaction to be verified and processed, as in the case of traditional banks.
Medical institutions need to maintain a huge database with personal information relating to an individual’s age, weight, medical conditions, vaccination record, family history, etc. Blockchain offers a secure and convenient database for record-keeping and gives access solely to users possessing a key for viewing such data.
In an emergency, the data can be shared promptly with other medical institutions and it cuts short the delay in time required to send the physical documents.
Blockchain can provide process automation for efficient clearing and settlement, and a few benefits at different cycles of Capital Market:
– Pre-Trade: KYC and verification of holdings
– Trade: Transparent and Real-Time transaction matching
– Post Trade: Faster post-trade processing like fund accounting services, tax reporting compliances, and reconciliations
Blockchain will also help in raising capital through crowdfunding from members of the network. Smart contracts can trigger margin calls in real time.
Cloud storage systems remain to be the widely used storage technique for data safekeeping but they are also vulnerable and susceptible to hacking. Every now and then, we hear the news of data leakage for some famous personality.
On the other hand, blockchain is immutable and encrypts data thus overcoming this weakness. It becomes the ideal method for data backup.
Blockchain makes paper-based trails redundant ensuring prompt identification of weaknesses and inefficiencies within the supply chain. Providing real-time location of items, aiding in queueing subsequent events in the supply chain helps in understanding the effect on product quality throughout the supply chain up to the destination.
It facilitates effortless communication between logistics and supplies partners since data is maintained on blockchain’s distributed database, and also assists in resolving issues resulting in the delay of product delivery in real-time.
Companies like DHL having a worldwide presence are already embracing Blockchain.
Blockchain provides an opportunity to vote digitally ensuring transparency which allows the regulators to notice any changes made on the network. There is no single point of weakness on the network thus making the voting process more reliable and robust.
The immutability of the blockchain ensures that the votes are not tampered with. Votes under fake names will make the entire chain invalid as each vote would be linked to one single ID, disallowing fake votes to be recorded. So, no more voter fraud.
Transfer of title of real estate properties involves a huge amount of paperwork leaving behind a confusing paper trail. Blockchain can store titles digitally on its network and its encryption will lower real estate frauds and assist in the verification of finances, claims, litigation details, property value, and title.
Distributed ledger technology makes all the transactions and events involved in the transfer of title of real estate completely transparent for the buyer and seller.
Insurance smart contracts on the blockchain will be self-executed when the conditions underlying the insurance agreements have been met. There is no tampering of records stored on blockchain, therefore there can be no false claims or duplicate claims.
There is complete transparency concerning the contract and no human involvement – leading to quicker payouts and lower admin costs,
At present, confidential data of any entity can be easily hacked into, but the encryption on Blockchain makes it next to impossible for the records to be hacked and leaked.
Time stamping and immutability of blockchain will disallow the recorded financial events, like raising an invoice, to be altered, duplication of transactions, inflating original expenses, or deflating the income (showing the correct financial position to the stakeholders and eliminating financial frauds).
The authorities can directly view the financial records, audit trails of each financial event, actual sales and profit, through the records of the entity on the Blockchain.
So, blockchain can be used to demonstrate to lawmakers and tax authorities that the company has complied with applicable laws and paid its taxes before due dates to the central or federal government.
Blockchain will aid in protecting an artist’s original work i.e. intellectual property, right to content – music records, copyrights of media giants. The original file cannot be duplicated, eliminating the possibility of the media files being pirated.
While streaming media on a blockchain, smart contracts will trigger fast and direct transfer of artist royalties to original artists ensuring that original owners get paid for their work.
Currently, hotel bookings are done through agents or third-party websites where a certain amount of commission is charged for travel and hotel bookings. Blockchains like Locktrip allow people to directly list their properties.
This helps in eliminating the third parties, allowing for a commission free booking. Blockchain will also help in reducing the overheads of the corporation.
The use of renewable energy is on the rise as they are environment friendly and cheaper as compared to fossil fuels.
– Blockchain will allow peer-to-peer electricity trading amongst members on the network, as members can sell the excess generated electricity through smart contracts on the blockchain.
– Blockchain allows sharing energy efficiently for electric vehicles by connecting private owners of charging stations to the owners of electric vehicles.
– Blockchain will allow smaller generators to meet raised demand for renewable energy.
– Smart contracts can aid in grid management, to balance the supply and demand of renewable resources resulting in a real-time bazaar for the distribution of energy resources.
– To meet their carbon emission reduction goals, businesses and governments buy renewable energy certificates from clean energy producers. Right now, trading renewable energy certificates is complex and involves intermediaries. Blockchain will wipe out the involvement of third parties and offer transparency between energy producers and consumers.
Each year millions of people have their identities compromised because of hacking or personal user records with companies being exposed or sold. Since blockchain keeps the records encrypted, the personal records i.e. birth records, driver’s licenses, medical records, and passports, will be secure and it will drastically reduce identity theft.
Access to personal records will be given only to people or entities allowed to view such records, making individuals in control of their personal digital data.
The Internet of things means connecting devices embedded with software, technologies, and sensors that collect and transfer data with each other over the internet without any human intervention. The internet of things has many security concerns as any hacker can steal your data from your Google home to your WiFi-enabled lamp.
Blockchain can play a pivotal role in the Internet of things owing to its attributes of decentralization, immutability, and distribution. Data stored on different devices can be distributed in a manner that is transparent, and secure with the help of blockchain. Blockchain will also ensure that instructions and personal data shared with the devices are not corrupted thus ensuring better efficiency.
To conclude, Blockchain in itself is not just limited to Bitcoin or other cryptocurrencies. As discussed above, it has a lot of other real-world applications. Blockchain faces challenges like compatibility with different blockchains, low-skilled professionals, and costs, but its benefits and uses are abundant. As blockchain is still growing, the list of its uses will keep on expanding.
Do you want to be at the cusp of this cutting edge technology? Wondering where to get started? This can help!