The 8 Best Uses for Blockchain in 2017
The blockchain is going to change your life in pervasive ways. Many aspects of your everyday life will run partly on the blockchain, and you won’t even fully realize it. From healthcare to equity trading to insurance, many industries are ripe for disruption using distributed ledger technology. Here are the 8 best uses for blockchain in 2017 that have the most powerful to disrupt established industry verticals:
- Search Engine Privacy
Every time you type keywords into search engine, you hand your data over to Google, which uses your data to profile you and target you with ads. This violation of your privacy is both irksome and creepy…nobody likes it. The blockchain is changing this, and decentralized search will soon be a reality. One of the most exciting private search engines is BitClave, an ecosystem built on Ethereum that really respects user privacy and gives consumers full control over their data.
2. Digital Identity
With a digital identity built upon the blockchain, you’ll never have to worry about your security again, eliminating one of the most costly problems. Best estimates indicate that digital security problems — the sort of problems that a blockchain-based digital identity could eliminate — cost industry around $18B per year. A distributed ledger offers solutions to many of the most severe digital identity issues, allowing users to be authenticated in an irrefutable and encrypted manner.
3. Financial Services
Surprisingly, it is estimated that errors occur in around 10% of equity trades. This results in manual human intervention, which drives up the transaction costs of equity trading and increases the amount of time required to clear an equity transaction. These problems multiply (both legally and logistically) when market makers deal with cross-border transactions. A decentralized ledger that logs and verifies trades would eliminate many of these problems, and the asset management industry would reduce a great deal of its operational risk thanks to the prospective applications of the blockchain within asset management.
These problems get even worse when it comes to international payments processing, an industry fraught with money laundering problems. The “know-your-customer” (KYC) capabilities of smart contracts will substantially mitigate many of the problems inherent in the currently-flawed system for international payments.
4. Distributed Cloud Storage
Blockchain-based distributed data storage is poised to massively disrupt the space in the next three to five years. With the recent Equifax hack, the level of trust consumers place in a centralized administrator of their data has plummeted, and consumers no longer feel comfortable placing their sensitive data in the hands of a centralized storage provider.
Thanks to the blockchain, data storage can for the first time become truly decentralized. Two providers, Storj and Factom, are developing applications for just that. Imagine a service where a consumer is allowed to rent out excess storage capacity on their devices (i.e. “AirBNB for data storage”) and fairly negotiate prices with the counter-party. This will likely become a pervasive reality with mass adoption sooner than we expect.
Claims processing is a tedious process that is ripe for efficiency improvements that will be enabled by the blockchain. Surprisingly, insurance processors are still forced to manually sift through cumbersome fraudulent claims, disorganized data, and abandoned user policies. Much of this information is still processed on paper, and these inefficiencies translate into a huge amount of human error, driving up administrative costs for insurance companies and causing time-lags that irritate consumers.
If the entire insurance industry was built upon smart contracts and the blockchain, much of this tedium would be eliminated, and the insurance industry would provide enhanced consumer transparency and experience significant reduction in the risks of human error. Plus, since insurance deals with sensitive user data, cybersecurity would be improved thanks to blockchain’s augmented encryption compared to the centralized systems on which the insurance industry presently relies.
6. Smart Contracts
Thanks to blockchain, pieces of property (both tangible and intangible) will soon have smart, ledger-based blockchain technology embedded into them that makes the lives of consumers much easier. Take real estate, for example. If property ownership was stored on an encrypted decentralized ledger, a purchaser could quickly verify that a “seller” of a property actually owned the property. This would eliminate the need for the entire title verification industry, and reduce onerous, mundane tasks within the title industry. Not only will this reduce human error in the real estate industry, but it will also reduce transaction costs.
Smart contracts will have tremendous application in the music industry in particular, which is presently fraught with problems in ownership rights and distribution of royalties. A comprehensive, decentralized ledger of music rights, embedded with smart contract features to enable seamless, immutable royalty distribution, would substantially mitigate a majority of these problems.
7. Internet of Things
Security on the internet of things (IoT) is a huge issue. Given that the data is stored centrally, it’s rightfully concerning that centralized security is insufficient. This is where the blockchain comes in: if a ledger exists that ensures that a device’s information is only revealed to trusted parties, then many of these cybersecurity issues are eliminated. Further, the blockchain could organize this data in a more efficient manner, providing a full integration between devices.
Take supply chain, for instance, and imagine a large multinational conglomerate that shoots for end-to-end visibility for its supply chain. With potentially millions of sensors delivering data on the quality and quantity of items along the supply chain, the issue of quick verification of information is a massive problem: even the best big data setups have difficulty performing this task with absolute certainty. In the event a distributed ledger was there that would provide instant verification and quality assurance for sensor-based data, there would be enhanced communication between sensors and quick verification functionality that would be completely infeasible with a centralized database.
The ways that blockchain will change healthcare are innumerable, and healthcare is one of the industries ripest for blockchain technology disruption. Distributed ledger technology would allow the storage and hashing of personal healthcare records that would only be accessible via a private key. Receipts for medical services performed could be put on a blockchain and automatically synced with insurers to verify proof-of-delivery. This same blockchain technology could be used for prescription supervision, regulatory compliance, healthcare supply chain management, and testing results.
These eight applications represent the most immediate, most impactful applications of blockchain that are the mostly likely to happen in the near future. However, it should be noted, that in order for any of these blockchain applications to function properly, each application must enforce strong ethical standards amongst users, rewarding those who contribute to the value of a network, and penalizing the free riders and unethical members who don’t contribute. But once a great network is built, it’s only a matter of time until blockchain disrupts a large number of complex industries.