It is moving currency swiftly, performing self-executing smart contracts, and digitizing business data and processes. It is dramatically improving the efficiency of supply chains. Blockchain technology is offering solutions across the board affecting scores of industries and businesses. It is no wonder that established corporates and budding entrepreneurs are transitioning to enterprise blockchain solutions that deliver higher business efficiencies.
With blockchain becoming the Holy Grail of businesses in 2018, we thought it prudent to outline how the technology is translating ideas into achievable business goals. We explain how blockchain is driving the boom in business profits and productivity.
Key Businesses That Are Backing Blockchain in a Big Way in 2018
There are hundreds of industries that stand to benefit by using blockchain, but we turn the spotlight on the industries that are aggressively inducting blockchain and powering transformative change:
The Banking Sector
Within the span of a decade, Bitcoin Cryptocurrency, Blockchain’s biggest transformative application, zoomed to $60 billion in market capitalization. The figure for the cryptocurrency market as a whole is $133 billion. The startling growth forced the global financial system to integrate blockchain into the existing banking framework to boost efficiencies.
In 2017, a consortium of the globe’s biggest banks partnered the creation of a cryptocurrency called the Unity Settlement Coin (USC). This is a digitized currency backed by the cash deposit value of major fiat currencies like the USD, EUR, and GBP. In the future, banks may move to create a single centrally controlled cryptocurrency to speed up global institutional settlements.
This development opens the doors for blockchain experts to provide even more selective blockchain solutions for big and small financial institutions.
The Impact of Smart Contracts Across Various Industries
The smart contract is one of Blockchain’s most innovative applications. Each smart contract is a sequence of code written in blocks residing in a distributed ledger (an accounting platform). The code is stacked with conditions and protocols that contractors are expected to fulfill. The terms of the contract, once coded in software, can’t be changed, and payment is processed only if conditions are met.
The system is transparent and incorruptible. As computer programs handle the contract, and not humans, there’s little scope for fraud or malpractice. Let’s take a closer look at how smart contracts are becoming a part of business processing.
The journey of an industrial product starts with the sourcing of raw material. This is followed by the assembly of component parts in a factory. The last three stages are storage, distribution, and sale of the finished product. In a human administered system, inefficiencies at different levels slow down manufacturing and decrease productivity.
The solution is to code the manufacturing sequence into the blockchain framework. Component stages are coded as independent smart contracts.
Let’s assume there’s a smart contract for Quality Control in an electrical circuit board factory. The smart contract can be programmed to prevent circuit board testing till certain preset QC checks are completed.
If one stage is incomplete, work in subsequent stages won’t be permitted. The blockchain will record every step of the manufacturing cycle. Once data is coded, it can’t be altered by anybody. The management can pinpoint administrative weaknesses and technical deficiencies and move quickly to rectify them. Profits and productivity get boosted when the manufacturing process becomes more efficient.
The Automobile Industry
There is a transformative change sweeping the automobile industry. The Internet of Things (IoT) and blockchain are powering a new concept; the connected car. This is a car that is internet enabled and connected 24/7 to devices around it and to the driver’s mobile, home, and office.
By partnering with the IoT in connecting cars, Blockchain extends three crucial benefits:
- Stores large batches of information safely and securely in distributed ledgers.
- Verifies the identity of the vendors in the supply chain.
- Engage vendors through smart contracts having preset conditions.
All three of Blockchain’s fundamental benefits boost efficiencies in the supply chain side of automobile manufacturing.
A connected car generates enormous data which needs large storage space, faster communication, and a secure and encrypted environment to function. This is necessary because the underlying asset (the car) is of high value and so are its occupants. Blockchain creates a huge space for cryptographers, OEMs, cloud hosting services, and applications developers to provide innovative services.
Automated payment is another service that blockchain will integrate into a connected car. Such a system will create a highly secure wallet acting as a repository of cryptocurrency. Crypto units can be used to pay for goods and services. Cryptos can be changed to the fiat currency of the receiver’s choice. Blockchain’s encryption protocol and distributed ledger will be strong enough to keep hackers at bay. Blockchain eliminates intermediaries, lowers costs and protects the business bottom-line.
Logistics and Supply Chain Management
The logistics industry controls the movement of men and materials from one point to another. Let’s assume that a trucking company has tied up with a farm to collect fresh farm produce. A smart contract can be programmed to reject farm produce that was harvested before a specified date. If the farmer fails to verify the harvesting date, the smart contract prevents the trucker from accepting the consignment.
The blockchain stores incorruptible data that can be verified at each stage. In this way, retailers can source authentic, quality controlled products for consumers. At the receiving end, the consumer can use a mobile app to scan the product and confirm its origin, ingredient mix, and quality certifications. Blockchain creates a distributed ledger of verifiable transactions that help the consumer to authenticate an item as genuine, and get alerted to fake products. Companies stand to save billions of dollars in profits that would normally be drained by counterfeiters.
The Healthcare Industry
The sheer volume of data that the healthcare sector generates is unparalleled and covers patient admission, surgery, treatment, and convalescence. Patient information is a complex and ever-changing entity. The data is confidential and requires a safe storage environment which can be accessed with secure codes provided to authorized users. The system must allow data to be sequentially updated and retrieved quickly in emergencies. No existing technology satisfies all these conditions with the brutal efficiency of blockchain.
The Blockchain is an efficient storage system because it permits the sequential updating of records, with each data packet becoming a unique record with its own time stamp.
The real challenge is to integrate private blockchain networks into one nationalized solution that integrates all healthcare services. Till that becomes a reality, private blockchain networks will develop a market of their own in the coming years.
The Scenario Unfolding in Artificial Intelligence (AI) and the Internet of Things (IoT)
Homes, cars and offices and a host of connected devices are becoming integrated with a unified environment using cloud technology, AI and IoT. The new frontier in our technological evolution is already demanding $6 trillion in investments in the coming five years. The Blockchain is the only technology possessing the flexibility and scalability needed for moving AI and IoT generated data with super speed in a secure environment using a distributed ledger architecture.
When computer scientist Tim Berners-Lee invented the “network of networks” in 1990, it was inconceivable that the internet would connect and transform the lives of 3.2 billion users. Blockchain technology is poised to spark a similar revolution in the lives of corporates and entrepreneurs.
It is conservatively estimated that not less than 26 billion devices or things will be connected to the Internet of Things by 2020. How do you store, move, and secure vast data that AI and IoT will generate? How can startups protect their ideas? How would you function with transparency, yet shield your secrets from competitors? How can the government secure its defense secrets from foreign powers?
There’s not the shred of a doubt that solutions will emerge through the triumvirate of Blockchain, IoT, and AI. Corporates and entrepreneurs are excited because emerging solutions like cryptocurrencies, smart appliances, smart contracts, and supply chain sensors are boosting profits and productivity in a smarter way. The billion dollar question is, are you ready to build with blockchain?