6 Ways Blockchain Is Being Used That Will Help You Understand It Better
Most people associate blockchain with bitcoin, but now it's so much more than that! These use cases can help you understand how blockchain is being used today.
Since its inception in 2008, blockchain has grown into one of these super-cool, incredibly flexible technologies that can practically be used to do anything. The implementation of blockchain has moved far beyond cryptocurrencies alone and today is not just bitcoins anymore. It is so versatile and efficient that it has all the potential to become a mainstream technology by serving multiple roles and functions, from enhancing security, to streamlining services, and even ameliorating our daily lives by making the world a better place. But how is this tech going to be used in practice in the upcoming years by tech experts, corporations and governments as well?
Blockchain as a Service
According to Gartner, as more companies and organizations invest in blockchain-related projects to be implemented in their businesses, this technology’s value-add will grow to slightly over $360 billion by 2026, and up to $3.1 trillion by 2030. Bank of America estimated that companies such as Amazon, Oracle and Microsoft could benefit from the adoption of this technology, creating a $7 billion market as it becomes mainstream.
Literally everyone’s going to adopt blockchain at some point because of its versatile approach to smart contracts, but the main challenge now is to make it simpler and more streamlined than it is in its current form. Similarly to what we saw a few years ago, a rapid surge of cloud-based SaaS companies is emerging, this time to offer streamlined blockchain-based applications. These new blockchain-as-a-service (BCaaS) organizations will offer multiple solutions that allow larger corporations to take full advantage of the smart contract environment without having to deploy and manage their in-house blockchain technology. To put things into perspective, this industry seems so profitable, that even Google itself has already jumped on the bandwagon.
Revolutionizing the Financial World
Financial transactions are, still today, extremely complex processes – especially cross-border ones. The need for security whenever funds are transferred is obvious, but the infrastructure and intermediaries used by banks are still the same ones that have been in place since the ’70s. Right now, digitization serves one sole purpose: to speed up sorting information in private databases. Smart contracts use blockchains to establish complex and completely secure legal agreements and digital relationships. The inherently strong emphasis on transparency and security of the distributed ledger can vastly improve the current system, starting from the fact that it can help build direct connections between two international correspondents and cuts out any middlemen in between through disintermediation.
A really interesting application of the decentralized ledger is using it to “tokenize” real and financial assets and transform literally anything into liquidity. Tokenization has a huge impact on markets and can revolutionize the finance world – the cryptocurrency market has currently grown to $287 billion, but the total value of illiquid assets (including gold and real estate) caps at a whopping $11 trillion. Tokenization can help investors trade on these assets without the burden and the complexities of paper. Blockchains can also assist regulators by serving as a fully accessible system of record where only compliant transactions can be authorized automatically. (Just how secure is blockchain? Learn more in Can the Blockchain Be Hacked?)
Due to the inherent nature of the distributed ledger, there’s no centralized point of weakness for hackers to target to steal private data. Digital identities can be used to collect all kinds of information about an individual, such as credentials and social security info, which will be stored in the safe environment provided by the blockchain.
The digital identity can be always verified with a single key with no need for paperwork or documents, and no need to provide any personal information. Companies that actually trade information by grabbing private data for free and then resell it will be stripped of this absurd power, and control will be given back to users. Unbanked people will enjoy a new verifiable digital identity and will have access to the financial services they’re currently banned from.
Skyrocketing Peer-to-Peer into the Future
Few initiatives have been as innovative and pioneering as the invention of the peer-to-peer (P2P) networks. An efficient, scalable and creative solution to reduce the cost of distributing files during the early days of the World Wide Web, P2P has evolved in a powerful grassroots movement to resist the overwhelming hunger of the largest multinational corporations of the world. Early platforms such as Kazaa, eMule and Azureus forever changed our way of consuming entertainment. P2P was the “granddad” of decentralization, and those who cared for anonymity or wished to fight for neutrality and against censorship, gathered under its banner.
It’s not so hard to see the invisible thread that connects blockchain to P2P – and it was only a matter of time before one of the biggest players of this freedom-based industry would build a bridge to cross that divide. Who else if not the blue frog itself? Yes, we’re talking about the former-Vuze, former-Azureus, now BitTorrent Foundation which joined with the TRON Foundation to introduce a new cryptographic token called BTT to let torrent technology meet the blockchain. The principle is so simple and intuitive, that anyone who has used torrent software would simply think “why didn’t anyone implement this until now?” Simply put, users will receive and use BTT tokens for seeding and sharing bandwidth with the rest of the community. In other words, the same thing we’ve been doing for years – except we finally get a physical (well… digital) reward this time.
Given the actual numbers of torrent users (more than 100 million monthly active users), the introduction of these cryptocoins can truly revolutionize the economies of scale of the computational resource exchange. Very few projects have the potential to fulfill and achieve the dream that Nakamoto expressed in his original white paper. This one is definitely one of them.
Helping the Environment
Blockchain provides us with a unique opportunity to reduce the impact that most technologies have on the environment. First, it can help monitor all the stages of the supply chain to catch a problem before it occurs – think about Volkswagen’s fuel emission scandal of 2015, for example. As more transparency is provided on each step of the process, companies will be forced to conform to better standards, as well as providing neutral third parties who should oversee their work with the necessary flexibility to check on their work. Smart contracts will provide consumers with real-time information on the reliability of that manufacturer’s management standards, which will inevitably steer towards efficiency to preserve its reputation.
Blockchain-based energy grids are also being experimented with to move away from uneconomical and inefficient centralized power supplies to the smarter and more environmental-friendly decentralized microgrids. Every bit of electricity generated by individual consumers, such as through solar panels, can be recorded and traded on a ledger, transforming energy into a commodity which can be easily monetized by anyone. Energy prices will drop, as they will be forced to follow the dynamics of the free market, reducing costs and forcing larger corporations to improve their efficiency as they cannot shakedown consumers because of their monopolistic advantage.
No, you can’t use bitcoins to heal people, I’m sorry – but that doesn’t mean that blockchain technology isn’t useful for health care. In fact, we can use the blockchain to improve the efficiency of the healthcare system in multiple ways. First, blockchain can be used to improve the efficiency of the supply chain; it can curb the production of counterfeit drugs. The decentralized record will make every member of the supply chain accountable for fraud, so that counterfeit batches can be easily identified. (For more on this, see Countering Counterfeit Drugs with Blockchain.)
But one of the amazing potential uses of blockchain may literally revolutionize medical research. It can provide immediate access for all doctors to an immense, bulletproof medical records database that can be shared with medical professionals from all four corners of the world. The best part is that it can be accessed instantly by anyone across the globe to get all the most important info with no risk for violating patients’ privacy. This would be immensely beneficial for medical research and clinical trials as well, since it would open the doors to studying millions of patients without having to recruit them or have them file endless paperwork.
Blockchain is one of these rare instances where the technological innovation is truly horizontal, and may very easily affect practically every industry. The list of use cases keeps growing as we speak, and new applications are found every day as this technology keeps evolving and being developed at an amazing pace.