B21 Cryptocurrency Education Series: Blockchain Application
In part one of our cryptocurrency education blog about blockchain technology, we endeavoured to answer the burning question ‘What is blockchain technology?’ and took a look at some of the components, terms and acronyms associated with the revolutionary technology. Below, in part two we are going to take an in-depth look at blockchain beyond cryptocurrency. Here we will focus on three main industries, banking, real estate and retail, and the most significant ways that blockchain technology can impact these industries to create a better workflow, business operations and customer experience.
Blockchain Technology in Banking
Blockchain technology has the power to improve all data processing functions involved in the banking industry, however, the main area that we are currently seeing it revolutionise is in the areas of payments.
Traditional banking is highly dependent on manual networks to make daily transactions, this is a process that is resource intensive, time consuming and prone to errors and fraud! The blockchains secure, transparent, decentralised technology offers the financial industry technology that can improve security and reduce fraud. Blockchain ledgers also enables the banking industry to action same-day international, cross-border payments almost instantly and without hefty transaction fees, something that will be very appealing to the customers of any bank that chooses to implement the technology!
Use Case: One of the largest banking organisations in the world, HSBC completed $250 billion in transactions using its blockchain platform ‘FX everywhere’ between May and December 2018. HSBC has recently revealed that implementing the technology has made for a smoother process, simplified settlements and has also eliminated the need for additional protocols. HSBC has been quoted stating that they are now looking into how blockchain technology can help multinational clients with cross-border supply chains.
Another example of a large bank using blockchain technology is Santander, which launched its blockchain based foreign exchange platform in April 2018. The service, named One Pay FX, uses blockchain technology that is developed by Ripple and it is now live in the UK, Spain, Brazil and Poland. The system allows users to make same-day money transfers in certain countries, which Santander claim is at a faster speed than what its competitors offer. Santander has stated that they are now working on improving the system to allow for the same day around the world transfers.
Blockchain Technology in Real Estate
Blockchain technology can improve all aspects of real estate, a shared database where owners, tenants, potential buyers and service providers can interact with property information and transaction history in an open source and secure system, not only promotes cost-efficiency but also helps to simplify the decision-making process.
The introduction of smart contracts on to real estate blockchain ledgers would allow for the completion of purchase/sale transaction to take place directly between the buyer and the seller, which helps to secure trust at the point of sale. As an industry where the purchase decision is based on emotion, smart contracts can be used to help to make advisors in the industry more efficient and to help generate a trusted reputation, placing them ahead of their game within their field. The implementation of blockchain technology in the real estate sector also allows for properties to be paid for using cryptocurrency, which not only eliminates fees but the tokanised nature of crypto makes for a smoother property investment process, where in the case of part or crowd ownership, shares can be easily verified on the blockchain.
Use case: As a country of innovation, Dubai was always going to be ahead of the game when it came to implementing revolutionary technology into the real estate sector. Property development and management company, Dubai Properties partnered with software company ConsenSys to create an internal blockchain based digital document signing platform in 2017. The system allows the company to track the real estate lifecycle from the planning and construction stages through to the point of sale, using cryptography secured digital signatures, which they have reported has created a seamless, secure and faster working process.
Emirates Real Estate Solutions launched the Dubai Blockchain Strategy in 2017, with the main objective of converting all title deeds in the Dubai land department registry on to the blockchain environment. An initiative, which has since seen property transactions take just 30 minutes to complete in comparison to the 20 day process on the legacy system, however rather than replacing the legacy system altogether CEO, Khalifa Al Suwaidi and his team have been working on an initiative to combine the power of the blockchain technology with the legacy software to ensure contracts uphold in a court of law and protect owners rights.
Blockchain Technology in Retail
Retail is an industry where the benefits of blockchain technology are endless. Not only can the technology help to protect consumer privacy, offer seamless payment options, a more efficient returns and refunds process, but due to the amount of data that can be held on the blockchain, it can also help marketing departments to boost customer loyalty schemes. One of the most valuable benefits that blockchain technology can offer the retail industry in light of today’s ‘sustainability movement’, where more people are placing a strong value on ethical consumerism and origin of produce is with transparency in the supply chain!
The use of blockchain technology allows commercial customers to track goods through every link in the supply chain from the raw materials to production through to the product on the shelf, which will have a significantly positive impact. For example, If a health food store was selling a raw vegan chocolate cake, the blockchain would not only show where and when the cake was made and by who, but would also include details about the ingredients that were used so that the retailer could prove that the cake contained no animal products, that the cocoa beans were, in fact, organic and that there were no added sugars to the product. This helps to build trust in the brand/consumer relationship, and to prevent cases such as the 2013 Tesco horse meat scandal.
Use Case: French retail giant Carrefour launched a blockchain food tracking programme in its Spanish network in November 2018 to track the origin of its free range chickens, which were raised in Galicia without the use of antibiotic treatment. Using Hyperledger technology, a QR code containing information such as the chickens date of birth, packaging date and more is placed on the packaging allowing customers to trace the chicken’s entire distribution process by scanning the code with their phone.
Blockchain technology can also be applied to sustainability in the fashion industry. In 2018 one of the biggest events in fashion, London Fashion week placed an outright ban on the use of real animal fur following a movement in sustainable fashion. A number of renowned luxury fashion brands including Burberry, Gucci and Tom Ford also announce their support for the movement and plans to stop using fur in their garments. But how do consumers really know if faux fur has been used in place of real fur? Using blockchain technology will take the consumer through the entire manufacturing process from the purchasing of the raw fibers to the weaving and dying of the materials and on to packaging and distribution, allowing anyone to check that a garment has been created as it promises.
Czech fashion designer Martina Spetlova hit the headlines in 2018 when she became the very first fashion designer to integrate a blockchain technology (Provenance) platform into her collection. As a sustainable designer, it is important for her to be able to show that her products are ethical. By using blockchain technology she is able to do just that. She has worked with provenance to create a small waterproof chip that is inserted into the garments, customers can then scan the chip with their mobile device to access a link that details the garments journey. They will also be able to read about the different suppliers that Martina has used for that particular item of clothing, where they are based and find out more about them — helping to place Martina Spetlova firmly on the list of ethical designers.
The above are just a few examples to help you understand how blockchain works and how it can be applied to the real world. As the blockchain revolution continues to grow, we will start to see even more innovative ways that traditional industries implement the technology. If you have any interesting examples that you would like to share with us, let us know in the comments below. If you would like to learn about cryptocurrency or find out more about how blockchain works, download our free cryptocurrency education app, B21 Life.
All images: Shutterstock