5 Vital Industries Ready to Benefit from the Blockchain
The blockchain is getting closer to mass adoption as more and more businesses see the value of its decentralized nature and other extensive benefits.
What are the five industries that will benefit the most from the blockchain and what will adoption look like?
The Growing Adoption of the Blockchain
Companies are starting to realize the advantages of using the blockchain in handling business processes. Due to its distributed nature, the blockchain cuts down operating costs while also improving the speed of transactions. More importantly, it offers a level of transparency way beyond the systems in use today, which is vital for growing compliance needs in the future.
Global spend on blockchain solutions increased by 81% in 2019 and the IDC believes the figure will continue to rise exponentially every year.
5 Vital Industries Ready to Benefit From the Blockchain
1. Supply Chain Management
Supply chains are infamous for being fragmented and inefficient despite their importance to global economies. They are nowhere near as effective as they should be, affecting both companies and consumers all over the world.
A root cause of this problem is the lack of transparency in supply chains. 21% of supply chain experts say visibility is the biggest challenge to their organization’s growth. Companies are struggling to track orders with total confidence. This leads to problems like delays, receiving fake goods, or even missing deliveries.
The blockchain makes supply chain tracking easier through digitizing assets. Asset digitization enables a product’s metadata (e.g. product ID, name, shelf life) to be stored and tagged on a digital ledger. This information cannot be changed without permission due to the immutability of the blockchain, which mitigates counterfeit deliveries.
Consumers benefit from this change as well since they can track orders the moment a product leaves the warehouse until it reaches their doorstep. Companies like Amazon have already implemented blockchain solutions in supply chain management. Expect this industry to scale rapidly as other organizations follow suit.
2. Finance
The finance industry is where blockchain solutions are expected to grow the most. China’s Central Bank Digital Currency (CBDC) is an example of the blockchain being used to solve traditional finance’s biggest weaknesses.
Cryptocurrencies are also rising in popularity due to consumers being frustrated by the deep-rooted problems of centralized financial systems. Payments―both offline and online―are still inefficient in unbanked and underbanked communities. PayPal, for instance, is not available in some countries despite being one of the world’s largest payment processors.
International transfers are another concern in traditional finance. Senders pay anywhere from $15 to $50 for international remittances today on average. This is too much to fork out for wire transfers and too expensive for most people, even if they live in well-off countries.
The blockchain makes it possible for individuals to send money worldwide with minimal fees. Cryptocurrency transaction fees often cost less than a dollar regardless of where the money is sent. There are no intermediary fees and all transactions are processed on a digital ledger, further reducing administrative costs.
Decentralization also makes it possible to send money without requiring authorization from a central party. Senders and receivers don’t have to wait for banks to approve their transactions. It is much faster for payments to arrive in a crypto wallet―miles ahead of the time it takes to finalize international wire transfers.
3. Real Estate
The real estate industry is plagued with challenges that impact all parties involved. Developers take a long time to finish projects, investors see slow―sometimes zero―returns on their investments, while homebuyers spend excessive fees on middlemen.
By leveraging smart contracts, assets and properties can be tokenized on the blockchain to eliminate these issues. This enables solutions like digital escrows, for example, where property agreements are drafted and agreed upon using self-executing smart contracts. Unnecessary intermediaries will be removed from the equation to greatly speed up real estate transactions.
Investors can also use the blockchain to buy a portion of a property rather than the entire thing which is made possible through asset tokenization. Real estate investment will increase as more capital flows into the market due to the lower barrier to entry.
4. Data Governance
Data governance is a hot topic in enterprises as awareness grows over the consent and handling of sensitive data. Over 7.9 billion records were exposed last year to security breaches, highlighting the need for businesses to manage data better.
Organizations can improve the situation with the aid of blockchain solutions focused on data governance. The blockchain allows users to control their information as they please. They can choose to share all data, hide certain information, or revoke access completely. If they decide to share their data, companies can reward them with cryptoassets as an incentive. The Brave browser does this by paying out tokens to publishers and users if they engage with ads.
Data ownership will continue to become a focus area for organizations as regulations evolve. Companies that leverage innovative technologies like the blockchain to address this will gain a serious advantage over less proactive rivals.
5. Healthcare
Having easy access to patient data is important for medical teams to get work done. Healthcare organizations can achieve this by utilizing the transparency of blockchain solutions. Patient records also cannot be corrupted in the event of a system failure or security breach since blockchains are immutable.
These two properties should overcome most―if not all―of the IT obstacles plaguing the healthcare industry, including better record-keeping for prescription histories.
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