Blockchain’s decentralized and autonomous approach to technology is being touted as a means to innovate transparency and accuracy of information. Though it is often associated with Bitcoin and other cryptocurrencies, it is already being applied to many other sectors that impact people’s lives.
Banking:
As a system designed to process, secure, and finalize transactions, blockchain appears to be the perfect tool to incorporate into the banking world.
A post from BraveNewCoin.com states that 60% of financial organizations plan on using blockchain for international money transfers. Those transactions would be much faster than the current standard and less expensive for a bank to utilize. An international money transfer typically takes two to five business days, the current runtime for Bitcoin takes around an hour or less. Blockchain could also be applied to security, anti-money laundering services, and know your customer (KYC) regulations. Thompson Reuters found that some banks spend upward of $500 million to keep on top of KYC regulations, but through a blockchain network, that work could be easily streamlined and reduce administrative work and costs.
The Depository Trust & Clearing Corporation (DTCC) is already partnering with IBM to provide a distributed ledger technology.
Despite the potential benefits, there is some concern with the technology. A PwC report looking at financial services technology advancements to 2020 and beyond surveyed banking leaders across the globe and 70% responded that they were concerned that the speed of change in technology is too fast.
Cyber Security:
Image via Government of Canada.
Blockchain advocates constantly point to its security as being essentially “unbreakable” or “un-hackable”. While the authenticity of that claim is debateable, a lot of work goes in to encrypting the data sent through blockchains and companies in the field are taking notice.
Each “block in the chain” contains code that relates back to the original file with info on each transaction, when it happened and who was involved. Tech start-up REMME is using blockchain to make passwords so secure, a user wouldn’t even need a password in the first place. The easiest way for a hacker to get into a system is to crack a password, but REMME uses blockchain to generate a specific certificate to each device a person would use. This would keep client data more secure and if a hacker tried to intrude with a fake certificate the blockchain would show where, how, and when it happened. Hacking a blockchain requires simultaneous hacking of all blocks in the chain. The older the blockchain, the harder it is to hack.
Insurance:
In a blog posting on InsNerds.com, Nick Lamparelli breaks down how blockchain’s decentralized and transparent nature is a perfect fit for the insurance industry. As detailed an insurer’s investigation is, there is a lot of redundancy and mistrust from the asset owner to the reinsurer, despite the billions spent annually on inspections, outside reports, and audits.
Image via InsNerds.com.
A blockchain of insurance information would contain every useful detail from the colour of a car when it was bought to whether or not the sprinklers in a heritage home worked properly, to every owner and every alteration made to the asset through its lifespan.
Nick Lamparelli predicts that blockchain will eliminate the following:
- All applications
- Repetitive inspections
- Expensive certificates of insurance
- Audits
IBM has studied how to use blockchain to reduce fraud. The detailed transparency would lay so many details out “on the table” that many, if not most of the opportunities for fraud would be eliminated. However, by studying the data and using predictive analytics to identify anomalies, there is potential to reduce fraud even further.
Retail:
Some companies, such as Burger King and Kentucky Fried Chicken have had promotions where they sold food for cryptocurrency. This could be seen as more of a marketing technique to generate buzz than an overhaul of business, but it shows major companies can listen to trends.
Image via Kentucky Fried Chicken.
The transparency of blockchain opens a lot of doors for customer accountability. As Nikki Baird points out in her Forbes piece, counterfeit items would be identified immediately. Tracking items, such as food, would be so easy that a barcode on a piece of fruit could tell a consumer everywhere it went from when it fell off the tree to when it landed in the supermarket, not to mention all the chemicals it was exposed to along the way. However, cryptocurrencies can be hard to set up and manage, it wouldn’t be easy to convince people to give up their credit or debit cards when they’re shopping.
Deal Street Asia reported on Singapore start-up TenX, a company that is working to make digital currencies easier to spend with a debit card that is an instant converter of multiple digital currencies. The company takes 2% of each transaction. Stockhouse recently reported on Graft Blockchain’s initial coin offering (ICO) of it’s own blockchain network built around merchants’ systems, but without the high transaction fees.
Crowdfunding:
Image via Starbase.
According to The Market Mogul, crowdfunders have invested more money into blockchain technology than any other sector. “Be it due to the alluring reward system or due to their desire to support efforts analogous with their beliefs.”
Companies who use Starbase’s software can create their own cryptocurrency tokens and can use the market to raise money to bring engineers on board to their ICO investments.
Real Estate:
The efficiency of blockchain means that in theory, the usually tedious process of manually transferring property rights can be done in a single step. Medium.com’s Anika Ley went into detail on this with an article published in December 2017. Much like insurance, a protected ledger can secure the owners’ rights and resolve disputes. It can also save money by minimizing contractual, labour, and registration costs (not to mention fees and taxes).
The Swedish government launched a blockchain-based program in 2016 to mange land titles and real estate ownership.
Anika Ley writes, “The program will facilitate the transfers of property using smart contracts, while banks, Land Registry Authority and other related parties will be able to check the workflow of the deal, such as due dates for payments. Moreover, all involved actors will have full access to the digital files related to the agreement and will be able to confirm each step of the deal. It has been estimated that the successful implementation of blockchain technology could save the government € 100 million per year.”
Health Care:
President and CEO of the University Health Network, Peter Pisters is optimistic that blockchain technology could put health care records “back in the hands of patients”.
In a blog post he wrote for the UHN’s Michener Institute, he states that health records could be maintained more accurately, with a comprehensive history of visits, tests, surgeries, medications. This would be available for any hospital a patient would visit.
Such data would also give clinicians the ability to make more accurate diagnoses and deliver faster treatment. The data could also open the door to potential medical breakthroughs.
UHN is a founding member of the Blockchain Research Institute, studying the implications this technology has on health care:
The main crux of healthcare data right now is that valuable information is stored at a single point that is accessible from other hospitals. This was easily exploited by ransomware hacks in 2017, but would be far more challenging, if not nearly impossible to crack if the information were held through a blockchain. It would also save hospitals and patients tens of thousands in ransom payouts.
Energy:
The energy sector, like healthcare, is another centralized industry that would be turned on its proverbial head by blockchain.
Massive power plants generating energy to be transmitted over long distances costs energy to produce energy. Blockchain’s peer-to-peer model combined with distributed energy grids would allow solar panel users to sell excess energy to each other, as opposed to selling it back to the grid.
One start-up taking advantage of this is Brooklyn Microgrid. Even if the power goes out in a neighbourhood, if the microgrid has enough communal energy, it could keep the lights on and services running. British Petroleum p.l.c (NYSE: BP, Forum) and Wien Energie out of Austria conducted an energy-trading trial in early 2017.
MIT’s Technology Grid goes a step further, explaining that renewable power plants spit out data that is logged over a series of intermediaries before it finally gets into someone’s home. If a meter could send its data directly to the blockchain, most of those steps would become redundant.
Voting:
Possibly the most contentious sector that blockchain could overhaul is voting. Many want to see a fully transparent, accountable, and efficient process, but many others would be concerned about the basic method of marking a paper ballot becoming corrupted.
Hackernoon has done the math on this. Imagine using a smart contract on a phone valid only on election day. Using a private key through the blockchain the votes would be secure and accurate. No “dimpled chads” or “lost / found ballots”, no “voters coming back from the dead”.
There are some challenges. One would be that blockchain can be overly transparent, so some steps to ensure privacy would need to be taken. Also, getting time off to vote could be a thing of the past.
Dr. John Patrick, author of Election Attitude was recently interviewed on the subject of using blockchain in the voting process.
IoT (the Internet of Things):
Of all the changes blockchain could bring to any one of the above-mentioned areas, IoT is probably the one that could impact people’s daily lives the most.
Gartner Research predicts 20 billion devices will be connected by 2020. From cars, to homes, businesses, phones, even down to wristwatches. One thing that is missing is security and as discussed, blockchain can reduce vulnerability by eliminating a single point of attack from a malicious hack.
In a Forbes article, Dell Technologies’ Jason Compton writes that while IoT on its own will likely revolutionize people’s lives, if there is a problem in the mix, it will cause serious headaches.
“The problem of IoT security needs solving because data flowing from sensors and embedded processors can change the way urban planners lay out hospitals and bus stops.”
He stresses that a small, private IoT network would be easier to hack than any widely-distributed network, given enough determination.
Start-up company Xage (pronounced “zage”) is already working on blockchain-based IoT security solutions.
Blockchain may only play a part in revolutionizing any of these sectors, but even a small change is a step in a new direction.