21 Promising Blockchain Use Cases
When one talks about technology that could potentially change the way we live, blockchain is a term that is constantly brought up. And for good reason, blockchain technology promises to fundamentally change the way we live in a multitude of areas. It can often be difficult to conceptualize the transformative impact that blockchain can have on our lives, which is why I have decided to compile a list of potential blockchain use cases. Hopefully this list will give you a clearer insight as to the potential of this piece of technology. Just to add, this list is by no means an exhaustive one.
What Is Blockchain?
Before we delve into this list of blockchain use cases, just what exactly is blockchain?
Blockchain technology can simply be thought of as a ledger that keeps a record of economic transactions. Each group of transactions that is made on a blockchain can be referred to as a block, with each block then being combined chronologically to form a chain, hence the term blockchain. Each block on the chain contains a cryptographic hash of the previous block, a timestamp, and batched transactions. The cryptographic hash included in a block solidifies the integrity of the previous block, making the blockchain architecture extremely tamper-resistant and secure. A blockchain possesses certain characteristics that make it an interesting piece of technology. Firstly, information that is recorded on the blockchain is made public, thus, it is possible for everyone on the peer-to-peer network to have a copy of the blockchain. This also means that all transactions that have ever taken place, or will take place on the blockchain are made accessible to everyone.
Because everyone can have a copy of the blockchain, we can regard it as being distributed, thus, the blockchain itself is not subject to the control of a single entity. This has the added advantage of making the blockchain incredibly secure, as there is not one single point of failure.
With all this in mind, we can now take a look at the various applications, or use cases, of blockchain technology.
- Sending money internationally using existing payment methods can be both expensive and time consuming due to fees that are taken by middlemen.
- There are a considerable number of individuals, especially in the developing world, that do not have access to banking services.
Blockchain can be used to solve these aforementioned problems by serving as a foundation on which cryptocurrencies can be built. Cryptocurrencies can simply be thought of as a digital currency that function as a medium of exchange in buying and selling various goods and services. Conducting cross-border payments can be both a rapid and inexpensive process, as the blockchain can facilitate peer-to-peer transactions, meaning that middlemen need no longer be involved.
Blockchain, by enabling cryptocurrencies, has also spawned the development of cryptocurrency wallets. These wallets give individuals the opportunity to send and receive money, and generally be in full control of one’s funds. This gives the unbanked the opportunity to receive an income, and even enter into decentralized networks that allow for lending and capital raising activities. The barrier to attaining a cryptocurrency wallet is small, as one only needs an internet connect. This is in contrast to opening a bank account with traditional financial institutions, which can often be a time consuming and expensive process.
2. Supply Chain Management
- There is a lack of transparency as a product moves along its supply chain, which means that any problems that occur cannot adequately be isolated and investigated if any incidents were to arise.
- Issues of product authenticity can exist in supply chain management, as consumers can often receive counterfeit goods.
A supply chain is a network that is established between a business and its suppliers, and blockchain technology promises to remedy the problems found within these supply chains. This is achieved by the blockchain’s ability to enable the digitization of assets. With this method, products can be tagged and assigned with unique identities that are then transplanted onto a transparent and immutable blockchain. Vital product information, for example: state of the product, time, location can all be tracked on the blockchain. In effect, blockchain enabled asset digitization allows for a product’s supply chain to effectively be transplanted onto a blockchain.
This can yield certain advantages, for example, products can more accurately be tracked as they move along different stages/locations in their supply chain, as a result of increased transparency. This gives stakeholders in supply chain management the capabilities to be able to isolate and tackle any potential problems. Also, end consumers can also benefit significantly from a blockchain enabled supply chain, as they would be able to verify the authenticity of purchased goods by use of the blockchain.
3. Digital Identity
- Ownership of data is largely in the hands of the countless applications and services that we grant consent to. This is problematic because these centralized entities are increasingly susceptible to data breaches and identity theft.
A digital identity can be thought of as the body of information that represents individuals, organizations etc that exists online. Blockchain could potentially solve problems with digital identity, by giving control back to the user, so called self-sovereign identity. Instead of granting broad consent to a variety of applications and service providers in obtaining one’s digital identity, individuals could possess an encrypted digital hub in which their digital identity data could be stored. More importantly, individuals could control who had access to that hub, and also revoke access when needed. Blockchain, in the digital identity use case, promises to place the individual back in control of how their digital data is utilized.
- Voter fraud is an issue that plagues current voting structures.
- A voter is required to be physically present at a polling booth in order to cast their vote, this can contribute to an overall lowering of voter turnout.
Voting, especially in our increasingly interconnected society, is an activity that should be able to be done through online means. However, online voting is a move that has been resisted due to concerns of security and fraud. With physical voting, these concerns do not exist, as paper voting is secure from hackers because it cannot be digitally altered. The characteristics of blockchain make it a suitable candidate in addressing concerns of security and fraud. Blockchain can eliminate concerns of voter fraud by providing a clear record of votes that are cast. Hacking a blockchain enabled voting system would also be a difficult task, due to its tamper-proof characteristics. With concerns regarding security and fraud allayed, the process of voting could be conducted in the comfort of voters’ homes, which may contribute significantly in increasing voter turnout.
- Medical practitioners often do not have a clear understanding of a patient’s medical history, which can make providing effective healthcare solutions difficult.
- Counterfeit drugs in the medical supply chain is also an issue within healthcare.
Blockchain can help to alleviate the problems found within healthcare by serving as a secure and tamperproof database on which patient medical records can be stored. This would make it significantly easier for medical practitioners to gain a better understanding of a patient’s medical history, by being able to access information such as medical drugs that the patient has taken in the past. The blockchain would also be useful in tackling counterfeit drugs in the medical supply chain, by acting as a medium with which the authenticity of drugs can be verified. Drugs would be tagged and tracked at each stage of its supply chain, with all this information being recorded on the blockchain to assure authenticity.
6. Fundraising (ICOs)
- Investing in high potential projects is an activity that has historically been reserved for VC funds, or well connected and high-net-worth individuals.
Blockchain has already made its mark on fundraising activity, by spawning an entirely novel ecosystem of raising capital, I am of course referring to initial coin offerings (ICOs). ICOs have produced a more equal landscape, upon which investing in promising projects is no long an exclusively reserved right.
7. Fundraising (Security Token Offerings)
- Initial coin offerings (ICOs) were a significant step in democratizing the funding process, but this model of funding does come with its disadvantages. For example, investing in an ICO does not represent traditional equity in the ICO project, thus, an investor possesses limited rights in relation to their investments. Furthermore, ICOs have proven to be in a regulatory grey area, as some national regulators have regard ICOs as actually being security offerings, and as a result, should be registered as such.
- The traditional financial markets come with its limitations, for example: intermediary fees, initial public offerings (IPOs) are out of reach for many companies due to the cost of floatation, and clearing and settlement can take a multiple days.
Security tokens are blockchain-based tokens that represent a security. With a security token offering (STO), companies can sell tokenized financial instruments such as equity and debt. The advantages of security tokens include: (1) security tokens enable fractional ownership, thereby lowering minimum investments. Thus, financial markets enabled with the use of security tokens could see increased liquidity. (2) tokens are instantly transferable and can be traded on 24/7 secondary markets. (3) tokens can be held personally by the individual, removing the need for brokers and custody accounts (making the investment process a significantly less expensive one). STOs represent a much more mature and regulated form of investment than an ICO. Therefore, even though there is currently little oversight of STOs, it is unlikely to face the same regulatory issues found with ICOs, as stakeholders in the STO space are legally required to work with and register their products and services with their respective national regulators before bringing them to consumers.
- A significant portion of ownership records are kept in paper form. This leaves room for the possibility of these records to be tampered with or subject to fraudulent activity.
Notarization is the fraud-deterrent process that assures the parties of a transaction that a document is authentic, and can be trusted. The use of blockchain technology could bring significant value-add to the notarization process. In its current form, the notarization process requires trust, however, the introduction of blockchain technology could mean that this process could be entirely trustless. The tamper-resistant and transparent nature of the blockchain makes it a suitable candidate for the notarization process. For example, one way that blockchain could be used in notarization is to ensure proof of existence. The blockchain could be used to prove the existence of a document since the time of creation, and any modification to the document since then could be detected. Verification that a document has not been altered can be done by hashing the document. Any changes in the document would result in a different hash, allowing the owner of the document to become aware of the change.
9. Food Safety
- With the globalization of food production and trade, the supply chain for these foods has become longer and incredibly more complex. As a result, there is a lack of transparency regarding the journey of our foods from the farm to the shelf. This lack of transparency makes it difficult to rapidly diagnose and address issues related to, for example, contaminated food.
- Records of the movement of food along their supply chain that are stored, are frequently paper-based and vulnerable to the inaccurate capturing of data. This method of recording can make tracking and tracing much more difficult, resulting in costly delays.
Using blockchain technology, if farm origination details, such as: batch numbers, factory and processing data, expiration dates, storage temperatures and shipping details could be digitally recorded on the blockchain, it could become possible to more quickly and easily verify the history, location and status of a particular food product. This enhanced end-to-end traceability would significantly improve the transparency and efficiency of the food supply chain. Furthermore, the fact that data would be entered digitally, and not captured in paper form, would mean that important data would be readily accessible to everyone with access to the blockchain.
10. Intellectual Property (IP)
- Badly maintained IP records can result in unnecessary legal disputes.
The considerable value-add that blockchain technology could bring to the realm of IP is by serving as a platform upon which clear and accurate ownership of IP assets can be recorded. Any disputes concerning the origin of an idea could easily be resolved by referring to a tamper-resistant blockchain that could serve up a timestamp that indicated exactly when the idea was recorded. This also gives IP holders the added firepower with which to protect their IP assets from infringers e.g. patent trolls.
11. Decentralized Autonomous Organization (DAO)
- The corporate governance of organizations is one that is often riddled with bureaucracy and mismanagement.
DAOs can be thought of as an organization that governs itself by an incorruptible set of business rules. DAOs should possess an incentive system that aligns its stakeholders’ interests in the achievement of a common goal. DAOs leverage blockchain and smart contract technology in the pursuit of this goal. The primary value offering of DAOs is in governance, DAOs operate in such a way that each stakeholder of a DAO has an equal opportunity to shape the future success of their organization, by use of a fair and inclusive decision-making process. This is in contrast to some existing governance structures, which are hampered by bureaucracy and a hierarchical management style.
Blockchain Use Cases in Disintermediation:
Blockchain’s decentralized nature removes the need for middlemen, which has very powerful implications in various areas such as:
12. Distributed Cloud Storage
Improvement in data security stemming from a shift from a centralized means of storage to a decentralized one.
13. Sharing Economy
The peer-to-peer and decentralized nature of blockchain removes the need for centralized entities such as Airbnb and Uber to facilitate the sharing economy.
Music artists can remove middlemen such as labels and publishers, and instead sell their music directly to their fans. Blockchain-based cryptocurrencies such as Bitcoin and Ethereum support micropayments, which could facilitate this novel artist-fan relationship.
15. Smart Contracts
Blockchain based self-executing smart contracts with predefined rules could facilitate agreements between various parties, all without the need of a middleman.
More blockchain use cases
Blockchain can provide a transparent and auditable trail for donations in order to prevent against fraudulent activity.
Blockchain enabled supply chain management could prove useful in detailing car history.
18. Real Estate
Transfer land titles can be digitized with blockchain, which would allow for a more efficient and transparent transaction process.
19. Internet of Things
IoT devices, and all corresponding data can be stored on a decentralized blockchain, instead of being controlled by a centralized entity.
20. Cyber Security
The secure and tamper-proof nature of blockchain make it an ideal solution in combating cyber security threats.
Blockchain based smart contracts can produce a more transparent and secure arrangement between insurers and customers.
Blockchain is an exciting evolution that promises to change the way we live. As this piece of technology undergoes further development, it is likely that we will continue to see a growing list of potential use cases.