The initial assumption by many was that the only industry using blockchain revolutionized by this technology was payments, especially through cryptocurrencies. However, it was soon apparent that cryptocurrencies would become a minor part of what blockchain could do.
While payments and financial services are still the most notable use case for blockchain, the list of industries with startups building blockchain-based solutions for various unique challenges is growing.
In some cases, the technology is being used to improve existing systems. In others, it helps to create entirely new products, systems, and models.
The following industries have shown high potential for blockchain, and some already have services and solutions in the market:
The financial industry was the first to have a useful application of blockchain. Meanwhile, several industry sectors are experiencing independent innovation with the technology.
Bitcoin launched in 2009 as the first cryptocurrency. It was designed to help users overcome the shortcomings of fiat currencies and centralized digital payment methods.
Since then, nearly ten thousand other cryptocurrencies have been launched on blockchains. They differ in fees, the amount of energy processing transactions consume, and the privacy users can expect.
The top ten cryptocurrencies with the highest market capitalization include Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Ripple (XRP), Solana (SOL), and Dogecoin (DOGE).
The blockchain has become a critical component in transitioning from the centuries-old double-entry to the new triple-entry accounting model.
In the triple entry accounting model, blockchain offers a secure, reliable, and easily auditable mechanism for storing business transactions. It becomes the trusted third-party source of information that can be used to confirm and authenticate what is in the financial records of businesses and organizations.
Deloitte, one of the big four global accounting firms, has taken the lead, especially in research on how blockchain can be used in new ways to improve accounting systems.
Financial institutions primarily embrace blockchain as a platform for securing and managing data and automating processes and systems, especially using smart contracts.
Blockchain offers security and privacy for users’ identities through immutability, timestamps, hash functions, and cryptography for data and smart contracts.
Major financial institutions are acting as individuals. The most notable activity, however, is being undertaken through consortiums such as R3 and Hyperledger.
These two consortiums have hundreds of major financial institutions from around the world as members. They have been tasked with building regulatory-compliant blockchain solutions for members.
Meanwhile, the industry is being disrupted by new models of financial service delivery, particularly decentralized finance (DeFi). The DeFi model removes central authority figures such as companies in the service delivery equation and replaces them with smart contracts on the Blockchain.
For example, instead of a user borrowing from a bank, they can provide collateral borrow from a smart contract on the Blockchain that gets its liquidity from other users incentivized with fees and interest.
The DeFi platforms used the most include exchanges such as Uniswap, lending platforms such as Compound Finance, and stablecoins such as DAI.
While facilitating the movement of goods from the producers to the consumers, supply chains generate and consume significant amounts of data. It is critical that this data is made accessible and also properly secured.
In centralized systems, data resides in silos where access is limited. Nevertheless, the silos are often broken into and the data stolen.
Blockchain offers a mechanism for stakeholders to securely share and receive data from those they directly transact with and the entire supply chain.
Besides facilitating the collection and sharing of data, blockchain is being used as an enabling technology to adopt other emerging technologies on the supply chains, in particular, the Internet of Things (IoT) and Artificial Intelligence (AI).
Some entities working on blockchain supply chain solutions include IBM, Consensys, and Casper.
According to the FBI, the US alone loses close to US$7 billion every year to cybercrime. The losses could be even more significant as it is difficult to determine the exact losses that accrue over time from data stolen online.
Blockchain offers tools to secure the internet, especially the transmission and storage of data, digital assets, and money. It also provides tools for empowering users to secure their privacy.
The tools include immutability, timestamps, hash functions, and cryptography.
Elections are critical to the strength of a democracy. How they are conducted or even perceived to be conducted often affects the stability of a nation and the faith the citizens have in public institutions.
Indeed, most political instabilities around the world are caused by the lack of transparency in the electoral processes.
The Blockchain offers the capacity to make voting and transmission of results secure and transparent. Voting data on the blockchain is updated through consensus on a peer-to-peer network and timestamped, making it difficult to tamper with it.
Meanwhile, the distributed ledger on which votes are entered can be accessible to all stakeholders, including individual voters. Each of these stakeholders can audit the process in real-time.
In 2018, an electoral system on the blockchain was tested in local elections in Sierra Leone.
Several technology companies, including IBM, Microsoft, and Consensys, are exploring voting solutions on the Blockchain. Several blockchain startups are also using the technology to build secure and transparent electoral systems.
The technology is being used in the health industry to allow patients to own their data and also facilitate the creation of a single file they can use with every service provider they visit.
Most importantly, it can facilitate patients sharing their medical records and data with whomever they choose. That includes a mechanism for compensation whenever the data is used for research.
In real estate industry, the technology is being used for various use cases. That includes asset listing, sales, and leases through smart contracts and property titles as non-fungible tokens (NFTs).
The use of blockchain in government includes managing elections and preserving and protecting ownership rights, especially real estate and intellectual property.
It also includes the issuance of fiat currencies. According to the Atlantic Council, a think tank, over 100 countries are exploring issuing Central Bank Digital Currencies (CBDCs). Some of these CBDCs are going to be on private and consortium blockchains.
The blockchain is offering an alternative to the centralized e-commerce model. It is making it possible to have online marketplaces that are truly public as an entity does not own them.
Such marketplaces facilitate truly peer-to-peer transactions between buyers and sellers. That can translate to lower prices for buyers and higher profits for sellers as no intermediary seeks to make profits.
Cloud storage platforms such as Storj and Sia Tech can fall into this category as they facilitate transactions between those who have extra space to rent and those who need it.
Other industries using blockchain include gaming, insurance, transport, cloud storage, prediction markets, and crowdfunding.
The blockchain could replicate what the internet has achieved, getting a function in every industry.
The blockchain will likely become a standard internet component, especially for securing data and digital value and eliminating human error. That means there is hardly any industry that is not going to be changed by it.
In general, the Blockchain technology offers the following three primary benefits to any industry that adopts it:
It improves processing transactions, including more capacity, speed, and reach.
Blockchain also offers the capacity to automate processes using smart contracts that are immutable and tamper-proof.
Its decentralized nature and the need for consensus whenever changes are made to digital files make blockchain a secure place to keep data. Security is improved further by timestamping, hash functions, and cryptography.
Even when data is not directly stored on the blockchain, the technology can still secure it wherever it is stored using these features.
By its nature, a blockchain is a shared ledger on a peer-to-peer network. This creates the possibility of having many stakeholders not only witness what is happening but also participate in the maintenance of the shared ledger through a consensus protocol.
Meanwhile, these stakeholders do not have to trust one another and can share data and collaborate transparently in an adversarial environment.
Casper network is a platform that provides easy-to-use blockchain capacity for businesses and institutions in various industries. It provides, in particular, the capacity to design, code, and run highly upgradable and dynamic smart contracts.
The team behind the project is always partnering with professionals to make the integration of blockchain tools easy for businesses and organizations in different industries.
Image courtesy of Pixabay.
