There are multiple use cases of Blockchain technology in various areas. It is helping multiple sectors streamline their financial operations, making them more secure and reliable.
In this blog, we would look at the use cases of Blockchain technology in different fields. However, let’s start with a brief understanding of the technology and then look at some of its benefits.
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What is Blockchain Technology?
A digital database that permanently records transactions, Blockchain technology is known for its high security as it runs a thorough check and verification. Without a central authority, it gives people the flexibility to manage their transactions.
This technology came into application in 2009 and has widened significantly in scope since then. The data added and stored in the blockchain cannot be compromised, and thus is highly trusted by many.
We have categorized blockchain technology and applications into different sectors/ industries to make it easier to learn/ understand for our readers.
Let’s look at different use cases of Blockchain technology across different industries:
1. Blockchain in Banking and Finance
a. Oversees Payments
Features of Blockchain technology allow it to create a data tamper-proof log of highly sensitive exchanges, whilst prioritizing security. This makes it a suitable technology for international payments and money transfers.
Recognizing the benefits of this technology in the payments segment, Banco Santander, a financial services company launched the world’s first blockchain technology-based money transfer service in 2018.
By using blockchain, Santander automated the entire process and reduced the number of intermediaries required for these transactions. This made the whole process more hassle-free and efficient.
Blockchain technology can further be used to bring down the costs of international transfers by reducing the need for financial institutions such as banks to settle transactions manually.
b. Capital Markets
One of the use cases of blockchain technology is its role in capital markets. A McKinsey report stated that the technology offers benefits such as faster clearing and settlement, operational efficiencies, etc., to capital markets.
c. Trade Finance
Traditional trade finance methods have had a lot of bottlenecks. These processes are slow and make liquidity harder to manage for the parties involved. There are multiple variables involved in communication required for cross-border trade, such as information related to the country of origin and product details. For this reason, transactions produce piles of documentation. Furthermore, the parties often face compliance and trust issues, and low profitability.
Blockchain facilitates solutions to these issues. Blockchain technology authenticates documentation, streamlines operational processes, and ensures coordination between different stakeholders.
Additionally, blockchain simplifies access to alternative investors through marketplaces. This increases sources of funds for smaller players.
d. Regulatory Compliance and Audit
Blockchain ensures the integrity of the records and reduces the room for human errors, making it effective for accounting and auditing. Additionally, the locked-in account records cannot be changed/altered by anyone, with the use of blockchain technology.
e. Money Laundering Protection
The encryption feature of blockchain technology makes it useful in avoiding or dealing with money laundering cases. It maintains records and supports KYC, allowing businesses to identify and verify the details of their clients.
Blockchain technology in insurance could be best used in smart contracts. Customers and insurers manage claims in a transparent and safe manner through these contracts.
Blockchain can record as well as validate all the recorded contracts and claims. This would help both parties avoid any confusion, and eliminate invalid claims, as Blockchain rejects multiple claims on the same accident.
An example of Blockchain technology in insurance is openIDL. It is a network built on the IBM Blockchain Platform with the American Association of Insurance Services. This network automates insurance regulatory reporting and streamlines compliance requirements.
g. Peer-to-Peer Transactions
Peer-to-Peer transactions or P2P payment services come with both convivence and limits. Some services have geographical constraints, and others levy a fee for the same. Furthermore, many of these services are prone to hacking, which is unappealing to customers trusting these services with their financial information.
However, these issues could be addressed by Blockchain technology that is secure and reliable whilst being cost-effective.
2. Blockchain Technology and Applications in Business
Blockchain technology will help with background and employment-history checks. This is enabled through its distribution network. The permissioned applicant is able to acquire virtual credentials (tokenizing their identity). These credentials would provide an immutable record of their work history.
Further, Blockchain can help with employee data security and access. Additionally, smart contracts could be created using the technology for the contract or temporary workforce.
Blockchain would also help with compliance and regulations. Using the technology, HR would be able to ensure that employees can control their data. Lastly, Blockchain will help with employee pay and benefits. Transactions would be encrypted and hence more secure and reliable. Moreover, Blockchain will eliminate the need for intermediaries such as banks.
b. Supply Chain Management
Blockchain technology and its applications in supply chain management streamline the entire process. With a complex network of multiple stakeholders, Blockchain’s shared IT infra simplifies workflows for all the players involved. This is facilitated regardless of the size of the business network.
Blockchain technology offers auditors greater visibility into the other party’s activities along the value chain. At the same time, it enhances customer experience as it offers traceability, transparency, and tradeability. It additionally drives cost efficiencies for all the parties involved.
c. Media and Advertising
As per MarketWatch data, the global market for blockchain in media and entertainment is estimated to reach $1.54 billion by 2024.
Media and advertising companies are employing blockchain technology to combat fraud, reduce costs and protect Intellectual Property (IP) rights of content, such as music records. Furthermore, the open and decentralized nature of Blockchain platforms such as Ethereum, allows actors in the entertainment industry to reduce IP infringement, and directly monetize copywritten assets using smart contracts and p2p micropayments, among other things.
Eluvio, Inc., is a platform that leverages blockchain for media. Launched in 2019, Eluvio Content Fabric makes use of the technology to enable content producers the management and distribution premium video to users and business partners sans content delivery networks.
The energy sector has always been driven by innovation. Enterprise Ethereum blockchain is the next emerging technology that can boost growth in the energy sector through its smart contracts and systems interoperability.
The Blockchain use cases in the energy industry include documenting ownership, new business models for energy markets, assent and data management in real-time, and moving emission allowances or carbon credits, or renewable energy certificates onto the blockchain.
Blockchain or Distributed ledger technology can enhance efficiencies for utility providers. This can be done by tracking the chain of custody for grid materials. It can also ensure privacy and trade secrecy, which is especially important for oil and gas companies.
3. Use of Blockchain Technology in Healthcare
Blockchain in healthcare comes bearing a lot of fruits. It can store information such as age, gender, and basic patient medical history data like immunization history or vital signs, in a shared blockchain. This shared data can be accessed by multiple healthcare givers without undue privacy concerns.
Furthermore, blockchain also plays a role in the working of popular connected medical devices, that are increasingly being linked to patient’s health records. Blockchain connects both devices and enables storage of the data generated and append it to personal medical records. Blockchain also could ensure the siloing of the data generated, which currently is an issue with these devices.
Blockchain thus has a major part to play in some of the most crucial global industries. While in one industry it streamlines operations, it offers the much-required security and reliability in another. But it constantly offers efficiency across all the industries it has made its place in.
If you are also looking to incorporate this distributed ledger technology into your business, then just contact us and we would make it a smooth sail for you!