What are the benefits of blockchain technology?
As the age of blockchain ushers in a wave of new innovative businesses, the question on most people’s minds remains – how will this technology impact my industry? But before we delve into some examples of industries that are currently being disrupted and some that will be affected by this technology in the future , it’s important to highlight some of the benefits of adopting blockchain.
Blockchain creates an opportunity for organisations to become more transparent, decentralized, democratic, secure, and efficient. By creating an ecosystem where there is reduced third-party risk, it means that transaction times can become much faster and transaction fees lower as a result of having no central organization tasked with the responsibility of controlling transactions.
The true scope of the benefits of blockchain technology is unlimited. Some of the advantages of blockchain uptake include:
- Facilitating better tracking of orders and assets
- Reducing errors in payment processing and auditing
- Fair and equal access since there’s no central authority to limit participation in decentralized ecosystems
- Increased transparency and better anonymity of transactions to reduce, fraud and identity theft
- Giving people greater control of their assets by eliminating third party risk
- Greater user empowerment and ability to monitor all activities concerning transactions
- Enhanced security and better reliability due to the attack-resistant qualities of the cryptographic system
- The growth of trustless exchanges
- Faster value transfers
- Low cost cross-border transactions
- Faster and more efficient transactions with no need for confirmation via centralized organizations
- Integrity of processes and more simplified ecosystems
- Enabling decentralized applications for better information management
Examples of industries that will be transformed by blockchain technology
Stock trading
tZERO, a subsidiary of Overstock s working to make stock transactions online possible using blockchain. The platform integrates distributed ledgers with existing trading processes to reduce settlement time and costs and increase transparency and auditability.
Hedge funds
First Round Capital and Union Square Ventures backed Numerai which is a decentralized hedge fund model that rewards data scientists and focuses more on collaboration instead of competition.
3D Printing
Increasing decentralization of manufacturing could result in blockchain technology being utilized for on-demand manufacturing and production according to research by Deloitte.
Cloud computing and storage
Blockchain-based cloud computing services will leverage idle computational power spread across hundreds of millions of computers around the globe instead of relying on centralized data farms. Blockchain platforms such as Storj operate as decentralized storage markets.
Accounting
Blockchain automates accounting functions by recording every transaction on a public distributed ledger that is incorruptible.
Advertising
By connecting brands directly to ad publishers through distributed ledgers, it is possible to create an audit trail for tracking ads from the point of deployment to the consumer. The Brave browser allows users to earn Basic Attention Tokens by simply being exposed to and engaged by advertisements while browsing the internet, allowing advertisers to directly purchase user attention, instead of the potential of capturing it.
Ride-sharing
Popular ride-sharing apps such as Uber and Lyft operate as dispatching hubs and use algorithms to control their fleets of drivers. They also dictate what they charge drivers and consumers. Blockchain could change that dynamic with a distributed ledger, whereby drivers and riders could create a more user-driven marketplace.
Entertainment
Blockchain makes content sharing fairer for creators using smart contracts, whereby the revenue on purchases of creative work can be automatically disseminated according to predetermined licensing agreements.
Supply chain management
As products change hands across a supply chain from manufacture to sale, the transactions can be documented in a permanent decentralized record on the blockchain, reducing time delays, costs, and human errors.
Energy
Major power companies such as Acciona Energy are using blockchain to certify that energy is clean by tracking its origins. Using blockchain, they can provide certainty to clients, in real time, that the energy supplied is 100% of renewable origin.
Law
Since blockchain can store copious amounts of data including Smart Contracts, this development is bound to change how contracts agreed between parties can be executed. Due to the fact that these contracts automatically enforce contracts when conditions are met, this will make the role of law practitioners redundant. Therefore, companies working within this arena and taking advantage of this phenomenon stand to gain.
Crowdfunding
The current model of crowdfunding through third party platforms such as Kickstarter, Indiegogo, or GoFundMe will be disrupted. Blockchain will make it possible for project creators to provide tokens to their backers, which they will then be able to exchange for services or goods at a later stage.
Insurance
Some companies are already making headway in providing a public, open-source, blockchain-based distributed computing and digital-asset platform that builds upon decentralized cryptographic P2P technology. This project builds tools that can be useful in the insurance industry.
Reputation and Credit Checks
Blockchain makes it possible to have a distributed database that is centred on reviews and caters to people and businesses with respect to credit worthiness verification without the need of third parties. This presents an opportunity for businesses looking to capitalise on this potentially cost-cutting measure.
Online media
Blockchain is set to revolutionise the way independent artists transact with their audiences, for instance, they will be able to sell and license their music without depending on today’s online dominant forces such as Apple Music or Spotify. With enhanced cataloguing and elimination of third parties, even content publishers have an opportunity to process transactions at low costs which could mean writers could charge customers on a per article basis instead of monthly subscription models.
Healthcare
Using blockchain will reduce fraud in the industry by having insurance companies, medical facilities, and health experts as part of the blockchain. The industry will also greatly benefit from the introduction of digital signatures which will strengthen privacy while making records available anonymously for research purposes.
