The usage of blockchain has increased significantly. Not long ago, it was little-known technology powering a payment method popular only with a small clique of early adopters, mostly tech-savvy individuals on the internet's fringes.
In less than a decade, major mainstream companies such as IBM, Microsoft, and Amazon have embraced it. It is being applied as the backend of numerous enterprise applications, some of which are on the verge of revolutionizing various industries.
Indeed, a new blockchain application is launched every other day, and keeping track of emerging projects is becoming difficult. Nevertheless, the following are 25 common use cases of blockchain applications coming into the mainstream:
Sending money from one corner of the globe to the other remains a major use case of blockchain applications. Bitcoin, the first-ever application of the technology, was designed for this purpose, and its use has continued to grow.
According to data from Blockchain.com, the number of unique wallet addresses has grown from less than 100,000 in 2013 to about 700,000 in 2022.
Besides Bitcoin, many other payment solutions on the blockchain have been launched. The list includes other cryptocurrencies (altcoins), wallets, and exchanges.
Some of the advantages blockchain offers with this use case include high speed, low cost, privacy, wide global reach, cross-border transactions, and censorship resistance (see future trends within blockchain).
Over time special protocols for international payments that work through commercial banks and other traditional financial institutions have been established.
The first of these protocols include the likes of the Ripple Network. Later, mainstream financial institutions set up consortiums to build private cryptocurrency networks that they could easily use for various functions, including international payments, with few regulatory issues. The blockchain platforms in this category include Hyperledger Fabric and Corda by R3.
Most recently, central banks worldwide have embarked on building Central Bank Digital Currencies (CBDCs). According to the Atlantic Council think tank, over 100 countries are in the process of building CBDCs. While these are designed for national use, they could make an international money transfer easier, more secure, and less costly.
A smart contract is an algorithm on the blockchain that auto-performs or self-executes when predefined conditions are met. It is an application on the blockchain used to automate processes and systems. This use case is the most critical enterprise application of the blockchain.
The advantages of automating processes and systems on the blockchain using smart contracts include improved security, immutability, reliability, scalability, efficiency, privacy, and global accessibility.
A supply chain is a product or service path from the producer or provider to the end consumer. Generally, even a seemingly simple product has a long supply chain with numerous stakeholders.
For example, bread has a chain that starts at the bakery, through the distributor warehouse, and to the retail store where the consumer picks it. That chain also includes transportation, documentation of new transactions between the different stakeholders, and accompanying payments.
But the chain is even longer and more complex when considering the raw materials the bakery acquires to produce the bread. The wheat flour comes from millers, and the millers get the wheat from farms. The wheat farms have to source their own raw materials, such as seeds, fertilizer, pesticides, and equipment from others.
Meanwhile, the bakery needs more than wheat to produce bread. It needs sugar, yeast, salt, milk, eggs, oils, and more. Each of these ingredients has its own complex supply chain.
Indeed supply chains of even the most basic products have numerous stakeholders. Besides the movement of the actual products, collecting and distributing information between the different stakeholders is an enormous challenge, especially when consumers want to trace the products they use from their origin, especially for health and carbon print reasons.
The blockchain ledger makes it easier to collect, secure, and make information accessible to all stakeholders, including the end consumer. Distributed ledger technology also enables easy backward movement of money in payments and the documentation of financial transactions.
The internet has revolutionized nearly every aspect of human society. It has provided speed, efficiency, and agility that were lacking days prior. With that stated, the internet has struggled to guarantee security and privacy to its users.
In particular, with data often exposed to all and sundry, industries and individuals become vulnerable to theft, blackmail, and unwarranted manipulation.
Blockchain technology makes the data, especially when it has to be shared publicly, secure through immutability. It also allows users to remain anonymous through private-public key cryptography, even when carrying out critical transactions through public channels.
The blockchain is a shared ledger of data and information. It also makes it a community process to record and edit data on the digital ledger through a consensus mechanism, which means no single entity can make arbitrary changes to the data.
Blockchain ledgers are an ideal technology for maintaining records, especially those shared and maintained publicly.
The ledger can serve as the primary storage or a platform through which data stored in servers is secured through hash functions and cryptography.
The basic component of blockchain is public-private cryptography. This technology allows information to be shared publicly without exposing the users' privacy.
The intended receiver of the information creates a public key to which information can be sent or assigned, but they keep the corresponding private key they need to access that private information.
Over time, people are generating huge amounts of data, which they need to keep for future reference or use. While they can keep it in local devices, that does not provide sufficient memory, and the data can be lost or destroyed. This has made cloud storage popular with both enterprises and individuals.
Initially, all options were based on centralized data centers by major corporate entities such as Google and DropBox. While centralized service providers have continued to become popular, they have several weaknesses.
One of those is the obvious factor of having single points of failure. These, of course, can be mitigated through backups. However, the problem is only partially eliminated.
The second weakness is that those who store the data can not have full control over it, including access. The service provider has much control. The service provider can read the contents if they want to, making it vulnerable to attacks or intrusion by third parties.
A few years after the arrival of the blockchain, decentralized cloud storage platforms were launched. The early decentralized blockchain cloud storage platforms include Storj, Filecoin, Sia, MaidSafe, and ArWeave.
Instead of requiring a single entity to set up huge data centers, these protocols create a marketplace for storage. Through such platforms, those with storage or willing to acquire the necessary infrastructure are incentivized so they can sell it to those who need it.
Generally, the files are split, encrypted, and distributed to computers on a global decentralized network. That ensures that no person can access a complete file on the network except the owner, who has a private key to recall all the pieces. It also ensures that a user can access their files even if a significant part of the network goes offline.
The Internet of Things (IoT) will achieve a lot of good. However, without proper security protocols in place, these networks can easily become vulnerable to attackers. Indeed, they could easily be hijacked and used to DDOs other systems.
The blockchain offers mechanisms for securing such systems, such as ensuring transactions are processed through consensus mechanisms and data is encrypted through public-private key encryption. It also offers a mechanism for securing data through strong immutability. All these make it difficult for a single adversary or conspiring adversaries to take over networked smart devices.
Through data processing, important and useful information is gleaned from a vast corpus. The traditional way of processing data is based on controlling everything from a central authority.
The blockchain introduces the capacity to have the process delinked from any centralized position. The decentralized nature of blockchains can create more capacity and secure the data used and generated through immutability and cryptography.
With the growing adoption of e-commerce around the world, tracking systems are becoming critical elements of enterprise. Blockchain technology offers the opportunity to make them more efficient, secure, and reliable.
A tracking system on a global peer-to-peer network has a wider reach and can generate more accurate data, especially with highly incentivized oracle networks. The technology also provides a mechanism to secure the data generated and used by the systems.
Blockchain solutions offer an opportunity for real-time regulatory compliance. That is possible because stakeholders have a common source of truth that is continually updated as the need arises.
While enterprises can get real-time notices on changes, the regulator can be in a position to monitor compliance easily.
In the early days of blockchain, the major concern from financial regulators around the world was that the technology was being used to bypass critical financial regulations. With time, however, it has become apparent that this technology could offer regulators more tools to combat money laundering.
First, blockchain is a public ledger, and any payments made through it could easily be monitored. Secondly, the technology offers smart contract capability, enabling automated detection across payment channels and stopping suspicious transactions.
For the first time in the history of the internet, and thanks to blockchain solutions, it has become possible for the user to not only have control over their digital identity but also be able to move with it wherever they go. A digital identity no longer needs to be tied to a platform owned by another individual or a corporate entity.
The Civic project is an example of an attempt to apply blockchain to that use case.
The blockchain is the ideal technology to support what has been dubbed as triple-entry accounting. This is where businesses have a trusted third party as the source of financial data. This reduces the need for manual auditing and reconciliation of books.
In the triple-entry accounting setup, the decentralized blockchain becomes the trusted third-party source of accounting data. The business transactions recorded on the blockchain are automatically accessible to the respective accounting systems of the counterparties.
Blockchain technology has offered solutions through which patients can own and move their medical records across different service providers. It also allows the patients to own the records and control how third parties can use them. It makes it possible that the patients can not only provide permission for using their health records and data in research but also get compensation in real-time when that happens.
The blockchain technology has created a mechanism for turning digital assets such as art, music, and video into sovereign assets. That means they can be sold and shared as rare assets without depending on a central system to maintain their scarcity.
For example, it is now possible to send a picture and not have the original copy remaining on your device. That means at any particular moment, only one person can own the original of a piece of digital art, just like it is the case with physical art and collectibles.
For that to be the case, the digital assets must be created (minted) on the blockchain as non-fungible tokens (NFT). The NFT market has already accumulated great value, with some rare pieces sold for as high as US$90 million.
The use of blockchain by private entities to create or mint digital cryptocurrencies is revolutionary. It is now possible for communities and even individuals to issue private currencies that can serve as mediums of exchange, value stores, and account units.
A community currency on the blockchain can be useful in empowering the members to carry out tasks and receive services that are difficult to achieve through non-programmable currency.
Through the use of blockchain and, in particular, through NFTs, copyright and patent protection systems can be more efficient and secure. The technology makes these systems less vulnerable to malpractices.
The blockchain can help eliminate fragmentations and the lack of transparency in traditional copyright management systems.
Using NFTs, digital assets such as music and art can not only be made easy to manage, but in conjunction with smart contracts, royalty distribution can be automated much more efficiently.
For example, digital art could be programmed so that every time it is sold, 10% of the agreed price goes directly to the creator.
With the help of smart contracts and robust oracle networks, wills could be automated.
After a death, oracles could collect data from birth registries, death registries, and other sources and determine what dependency gets based on the outlines established beforehand.
Sourcing funds from the public, especially to support development projects, is one of the most successful use cases of blockchain technology so far. This has been achieved by minting tokens on the blockchain and selling them through Initial Coin Offerings (ICOs) and other types of token sales.
While the project gets the funds it needs, those who get these tokens get an opportunity to access services on the platform being built, or they can sell the tokens to others at a higher price and make a profit.
Peer-to-peer lending is an application of the blockchain that has been tested and proven. Some of the most popular crypto lending platforms, such as Aave, Compound Finance, and 88MPH, are decentralized Finance (DeFi). Smart contracts on a blockchain manage them.
In some cases, investors contribute to liquidity from which others borrow. The interest and fees paid to the liquidity pool are shared among the liquidity providers.
Land titles can be difficult to secure, especially in countries with rampant corruption. The blockchain makes more reliable and secure land registries possible through consensus protocols and cryptography.
Indeed, the technology is also making it easy to tokenize and have many people claim ownership of a single property. Whoever wants to claim a return can sell their share as a token without inconveniencing the other co-owners.
Through elaborate smart contracts and oracle networks, the blockchain can help solve complex mathematical problems.
There is hardly any industry that is not on the verge of being disrupted by blockchain technology, at least to some extent. With that said, some industries are already witnessing the development and adoption of different blockchain applications.
In this industry, the applications deployed include medical record systems, supply chain management systems for medical supplies, and medical research patents.
In financial services, the applications that are becoming most tried include payments, global financial transactions, remittance, lending, exchanges, and triple-entry accounting.
In this industry, blockchain is used to manage capital raising through token sales and create new stock management systems.
The technology, especially through smart contracts and oracle networks and the Internet of Things (IoT) and Artificial Intelligence (AI), could be used to automate such processes as risk analysis and underwriting.
Some of the ways blockchains are changing real estate include improving property title systems, property listing, and also general property management.
Some ways the technology is likely to change media include decentralizing content distribution channels, royalty-sharing models, and automating the entire process through smart contracts. It is also going to change the revenue model, including through micropayments. It is also going to change how content copyright is managed.
The technology is used in the oil and gas industry to tokenize resources for easy trading in commodity markets. It is also being used to improve the efficiency of supply chain management.
Many services could be made more efficient in delivery, more secure, and less costly. That includes the management of elections. The blockchain is also likely to help secure user data and the privacy of those who use those who access government services online.
The technology could help in making the raising of funds easier and also the management of finances, and in particular increasing transparency for all stakeholders.
Indeed, the technology creates a mechanism through what is known as a Decentralized Autonomous Organization (DAO) for those who raise funds for various courses to be involved directly in decision-making, including assigning the funds and tracking in real-time how they are utilized.
One way the blockchain will disrupt transport and supply chains is by making data sharing among stakeholders more efficient. The technology provides a common secure, easy-to-use shared ledger for all of them. It also offers the mechanism of automating the transactions that emerge from their interactions using smart contracts.
Some of the ways blockchain will change tourism includes providing a more immersive experience for travelers through particularly metaverses and similar technologies. It also lets travelers monetize and earn from content they collect through NFT.
There are many ways the blockchain technology is changing entertainment. That includes how entertainment content is created, distributed, and monetized. Instead of relying on centralized platforms that not only censor but also allow a few people to benefit the most from the revenue generated, the technology allows entertainers to reach fans directly and to keep much of the revenue generated.
Blockchain solutions can manage and improve supply chains. It can also create new peer-to-peer channels between producers and consumers. The retail industry will also benefit from better financial management systems and the automation of processes and systems using smart contracts.
The technology is set to strengthen systems for tracing and tracking foods and beverages from the farm to the restaurant or dinner table. Indeed, it can help improve and make the supply chains more efficient, transparent, and less costly.
Some brands in this industry leveraging the technology include Bumble Bee Foods, Nestle, Walmart, and Tyson Foods.
The technology could improve how education is delivered. The blockchain allows trainers and trainees to interact in a peer-to-peer arrangement supported by smart contracts. The decentralized network that forms the blockchain could also improve the security of data and protect the privacy of those who sign up to learn.
The blockchain can help alleviate concerns about digital identity, data privacy, GDPR regulations, human error, bad actors, and roaming fraud. It can also facilitate roaming settlement among different service providers. The technology could also make phone number portability easier to implement.
The technology will help with the traceability of raw materials and safeguard data that is generated or used during manufacturing. It can also help track the warranty given to end users of the products that go into the market. Generally, it can make the supply chain more efficient for the manufacturer and other stakeholders.
Over time it is becoming easier to integrate blockchain applications into your business. You no longer need to build the foundational protocols. That is being taken care of by several labs. With that, the technology has become hugely plug-and-play.
The most common way to integrate your business is to use smart contract applications that can be written on many blockchains today. Indeed most blockchains coming into the market are designed to have the elaborate capacity to support smart contracts written in readily accessible languages.
Some of the blockchains exist in public networks that anyone can use without seeking permission and join and help support. The public blockchains that support smart contracts include Ethereum and Cardano.
Meanwhile, some blockchains are permissioned, or they exist on private blockchain networks that are maintained by companies and consortiums. Examples of such permissioned blockchains include Hyperledger Fabric and Corda.
A few blockchains can be described as being hybrid. That includes Casper Network, Polkadot, and Kusama. With these blockchains, while the foundational network is a public one, users can create smaller chains with more direct control, including aspects like who can access data on them as well as use them.
If you are ready or hoping to use blockchain to automate any part of your processes or systems, reach out to Casper Network, and we will facilitate the onboarding of your business.
