Business use cases of Blockchain
Properties that are inherent to blockchain technology are able to improve many business processes once implemented. Read more to learn about some practical uses blockchain has in the business sector.
Many people are aware that blockchain is the technology behind Bitcoin, Ethereum, and other cryptocurrencies. It is because of blockchain technology that these networks can stay secure and decentralized without the need for an intermediary. People trust these networks enough to conduct transactions on them, invest in them and also store their hard-earned money. In a sense, the word ‘blockchain’ has become almost synonymous with ‘cryptocurrency’ or uses limited to only a digital currency/asset.
Blockchain and cryptocurrencies have become increasingly popular in the business sector due to their inherent properties. Businesses can conduct secure transactions with minimal fees, even across borders with little to no red-tape.
The advantages of blockchain, however, expand beyond cryptocurrencies and crypto payments and can be extremely useful and practical to many different businesses. Below are three different use cases of blockchain technology that can prove very beneficial for businesses to implement.
Supply Chain Management
Supply chain management (SCM) is the management of the flow of goods and also the process responsible for turning raw materials into final products. For example, when a company organizes the ordering, purchasing, and transportation of wood, graphite, aluminum, and rubber to a single destination to produce pencils. SCM is largely a logistical task with many moving parts that work together to achieve the end goal of producing a final product and/or delivering the product to the end-user.
But with so many moving parts in the whole logistical apparatus, especially for more complex products or processes, the tracking of goods and raw materials becomes particularly difficult and cumbersome. Furthermore, the quality of goods or raw materials can be easily overlooked which makes it difficult for businesses to maintain a high standard. Lastly, operating a long supply chain is very costly to a business as there are many intermediaries and administrative costs that need to be covered.
Through blockchain technology, businesses can more easily record and track the price, date, and location of goods and raw materials in a supply chain. This is done by digitizing physical goods or raw materials and adding them to the blockchain, thereby making them decentralized, immutable, and public. This way businesses will be able to effectively track goods or raw materials from its source all the way to the end-user, which increases the supply chain transparency for both the business and the end-user.
The blockchain can also be used as a tool for businesses that are involved in the same supply chain to more effectively communicate, along with the added benefit of reducing administration costs (since there are no intermediaries to deal with). The open and decentralized blockchain provides all parties with the same, regularly updated copy of the ledger that cannot be altered by anyone, which means the information is up to date and relevant, but also trustworthy. This has a great potential to greatly reduce errors and miscommunication. This also means that less time and resources will be spent on confirming and verifying information and can instead be spent on the delivery of goods and raw materials.
Smart contracts are essentially a digital set of rules that are stored within a blockchain that verifies and executes the terms that are dictated on the contract. Because smart contracts exist on a blockchain, they inherit some properties of it, namely immutable and distributed properties.
Immutability is a useful property when applied to businesses because once a smart contract is created, it cannot be changed. This means that no one can tamper with or alter the contract without approval, and if the smart contract is holding funds, again, no one can take those funds without approval.
The distributed property of blockchain means that the terms on the network are abided by the parties involved. This allows businesses to communicate and finalize deals and terms without the need for a third-party or intermediary, which saves costs on both time and money. Smart contracts can also be programmed to make transactions after conditions have been met and there is a consensus, which streamlines the payment process.
Furthermore, because smart contracts can also be programmed to automatically execute certain tasks based on certain events or outcomes. This eliminates human error and increases the speed at which businesses can complete tasks, as long as these tasks can be simply encoded and automated.
Secure Record Sharing and Storage
Businesses need to be able to communicate and share information as effectively and efficiently as possible, especially if they are looking to reduce costs and errors. Additionally, the information that is shared from business to business ought to be secure for the most part, because secret and sensitive information may be shared between businesses or within them. This is especially true in the medical and healthcare industry.
According to a John Hopkins study, 250,000 people in the US die every year due to medical errors, and is also the third leading cause of death in the US. Many of these errors are reported to be communication errors between providers.
Traditional data sharing methods that have been used by different hospitals and healthcare facilities are very vulnerable to hacking and attacks. Also, because hospitals must accurately and frequently communicate patient information, the vector for an attack is even larger.
Blockchain technology can provide a novel, yet practical solution to this problem, especially in a field where private, confidential but vital information about patients needs to be shared. Hospitals can record information such as age, gender, medical history, doctor’s records, etc. onto a distributed cloud, the data on which can be verified by the blockchain. The result of this is that the records can only be accessed by authorized people who hold cryptographic keys. Also, this information is secured by the blockchain and therefore effectively invulnerable to attacks and also means that the right set of eyes will be able to see and access the sensitive information.
Above we have provided three different and practical solutions that blockchain can bring to businesses from different sectors. The innate properties of blockchain provide the much-needed security of data, which is becoming an increasingly important issue that needs a reliable solution. The ability for blockchains to bring transparency to many processes, transfer knowledge and cut costs is a game-changer for all businesses, and it would be interesting to see the results as more businesses continue to implement blockchain technology.