Blockchain Case Studies
Let’s start this time with some laugh. I have always liked Dilbert because it captures a great deal of reality that it is simply unbelievable. I also like the power of below quote from Albert Einstein:
“Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world”
As promised last time, in this entry I will be exploring a few case studies where Blockchain could be used. My goal is not to talk about any integration with Bitcoin technology but rather how we could use Blockchain as part of the solution.
1) Land Registry
How it is done today: The most traditional way of property registry is controlled and safeguard by government institutions. In some countries this job is done efficiently, and in some cases very inefficiently — In some Eastern European countries registries are still done manually using stacks of paper.
Proposed solution: There is an opportunity to move all this data into a safe, transparent infrastructure guarded by cryptography and guaranteed integrity of data. For example, in Sweden a private-public effort is in development in this area. Startup ChromaWay is currently ongoing testing of a Blockchain solution for Land registry. Of course governments and financial institutions must support this type of initiatives; some of the governments considering a similar approach are Georgia and Honduras, for example.
2) Asset Tracking
How it is done today: Assets are tracked in the separate ledgers of every participant in the lifecycle of the asset.
Proposed solution: In cases where parties involved during the lifecycle of the asset are using distributed ledger, then there will not be duplication or the risk of multiple entries. The network guarantees the uniqueness of the asset. There is no possibility of duplication. And why is that? Network is using consensus to confirm each entry in the Blockchain, which prevents any party to separately modify its ledger.
By using a smart contract and distributed ledger, this ecosystem will enable single instance of asset through its lifecycle
3) Blockchain and Future House Purchases
How it is done today: We have buyer’s agent, seller’s agent, a escrow account in a financial institution, a buyer’s financial institution, and a long and time consuming process. With homeowners selling their properties every 5 to 7 years, Blockchain technology has the potential to impact million of people. How can we transform this cumbersome process into a faster, safer and cheaper transaction? Let’s explore.
Proposed solution: I mentioned the concept of smart contracts in my previous post. Its role in this use case is crucial. Let me explain it one more time: Smart contracts are self-executing programmable contracts (computer code) that automatically carry out functions once the triggering event happens. In one of the next articles I will talk about how to create smart contracts. According to one of the articles from The World Economic Forum, smart contracts are secured in the Blockchain as “self-executing contractual states”. Thus by using Blockchain technology, the industry could:
1. Save by eliminating transaction fees for buyer/seller agent, banks and any other intermediaries
2. Minimize turnaround time
3. Eliminate escrow as Blockchain is only a source of trust
4. Eliminate manual process for requesting mortgages
4) Trade Finance
How it is done today: Banks play an important role in risk mitigation and offering financing for both domestic and international trade. Banks help companies with financing products, manufacturing cost, getting working capital, comply with regulations, fraud prevention, and guarantee the credit worthiness of businesses that do not have yet established working relationships. Trade Finance provides companies with the funds and security they need to buy and sell products and services both domestic and international. This process involves a lot of documents and signatures. As I will explain shortly this is a perfect fit for Blockchain 2.0 technology stack.
Proposed solution: Trade Finance can definitely benefit from Cryptotechnology. You may wonder what are those enablers that make this technology suitable to Trade Finance? Let’s list it:
1. Transparency — improve credit rating, credit history and risk assessment procedure
2. Immutability — No one can change the block (ledger entry) without consensus of participating parties
3. Auditability — all history is maintain in the Blockchain
4. Safety — as both buyer and seller are on the same infrastructure prevents fraudulent invoices and duplication of invoices.
With all of these benefits the industry could cut a lot of waste in paper and time, and customers could get necessary funds faster. Some initiatives in this field already exist if you would like to read more about them, visit: http://www.coindesk.com/dubai-ibm-blockchain-trade-finance
Some other applicable case studies include tracking inventory, warranty tracking, and insurance policy tracking. This demonstrates the impact that cryptotechnology is going to have on all industry verticals.
Welcome to the future.