5 Important Use-Cases for Blockchain
It’s the year of blockchain and companies are finding dozens of ways to use this technology to streamline processes, improve security, and drive innovation. There are dozens of use cases for blockchain, many of which have the potential to impact millions around the world.
The following are five use-cases for blockchain that can make a significant difference in the way we interact with technology and each other.
Cyber security is arguably one of the most important use-cases for blockchain. A 2017 IBM Study of 3,000 global C-suite executives found that 33 percent of organizations, across a range of industries, are considering or already using blockchain, with security against fraud and cybercrime being the main reason organizations are interested.
In our CTO’s blog post, The Case for Decentralizing the Threat Intelligence Market, we outline the many reasons cyber security needs this technology, including:
- Lack of interoperability (I.E. inability to use coverage from different providers)
- Overlapping coverage between providers’ products
- Lack of incentive for security experts
- Centralized threat detection (I.E. single point of failure)
Blockchain makes it possible to decentralize threat protection, which is exactly what PolySwarm does. In the PolySwarm ecosystem, we eliminate barriers to participation, opening up to security experts worldwide. We’re able to use a utility token (NCT) to reward and incentivize innovation. Finally, in our open source environment, enterprises can mix and match security options, allowing them to address their specific threat profile. Learn more in our recent video:
We’re not the only ones taking cyber security to the next level. Companies like CertCoin, GuardTime and Hacken.io are also making great strides in bringing greater security to the masses in a variety of different ways.
We’re living a data-overload world, yet the technology needed to keep it secure is lacking. As such, data management is one of the biggest challenges for enterprises right now, as explained in HBR’s recent article, What’s Your Data Strategy?:
“More than 70 percent of employees have access to data they should not, and 80 percent of analysts’ time is spent simply discovering and preparing data. Data breaches are common, rogue data sets propagate in silos, and companies’ data technology often isn’t up to the demands put on it.”
This lack of security and organization within big data and the entreprises that collect that data is why we saw a record amount of attacks on large organizations like Equifax, Target and more in recent years. The need for better data management is clear, and the blockchain is ideal for securing this information.
There are a number of industries that have already found value in the blockchain for managing and securing their data. Healthcare, for example, can use blockchain to improve accountability, authentication, and confidentiality of their data. In the medical field, where privacy is required and expected, the adoption of this technology may become critical.
The public sector is another area where blockchain has already being seen as a valuable technology for transforming data storage and access.
“Blockchain technology could simplify the management of trusted information, making it easier for government agencies to access and use critical public-sector data while maintaining the security of this information,” according to a recent McKinsey report.
The early days of exploring blockchain’s role in insurance have shown that this technology has significant potential. Startups like RiskBlock, from the RiskBlock Alliance, are already making waves and being tested nationwide, according to Insurance Journal.
Using blockchain can help with a wide variety of industry challenges, from assessing risk to mitigating fraud — right now, the insurance industry loses $80 billion annually due to fraud and the blockchain is poised to reduce or eliminate this issue, among others.
Bernard Marr, expert in big data, analytics and metrics, suggests blockchain could help the insurance industry in the following ways:
- Improve Trust: According to Marr, there’s a “crisis of trust” in this industry. Blockchain’s transparency could repair this.
- Improve efficiency: Streamlined data entry, combined with greater control of personal data: “The goal would be to have the KYC data verified and then it could be securely forwarded to other companies to use without the need to repeat the data entry or verification process,” says Marr.
- Improve claim processing: Smart contracts ensure a faster, more streamlined process of managing claims. Once the contract requirements are met, the coverage is released and the payment is made in one seamless, automated transaction.
- Improve fraud detection: The public ledger and its ability to verify data is one of blockchain’s greatest strengths, and could also have the greatest impact on the insurance industry.
All of these benefits would likely lead to reduced costs, greater legal certainty and ultimately remove the current vulnerability of a single point of failure.
The P2P economy is growing in popularity, thanks to the many companies making it easier to buy and sell goods and services directly with one another. Blockchain itself is built on a P2P network, so it would only stand to reason that this technology will be critical in improving and securing P2P transactions in our daily lives.
In current P2P transactions, there’s still a middle man — think TaskRabbit or AirBnB. This takes us back to the issue of a single point of failure, with a centralized location for collecting and storing user data. With blockchain, however, that middle man is removed, driving evolution in the many areas of our lives where P2P is used, including:
- P2P payments
- P2P trading and investing
- P2P lending
- P2P energy distribution
- P2P money transfer
- P2P sharing (think: music, data, products)
There are a variety of companies testing P2P on the blockchain, including the lending startup BTCJam, which was featured in Business Insider’s 10 Most Promising Startups Building With Blockchain Technology.
It seems like 2017 was the year of mass hacking scams, with cyber attacks affecting some of the largest corporations including Uber, Yahoo! and Verizon, according to Calyptix Security. The Equifax data breach alone affected more than 143 Million U.S. consumers.
With so much vulnerable personal data at risk, the question of how secure our information and identities online is at top of mind for many people. The current process of securing your digital identity is both centralized and based on passwords. This makes your online data and assets susceptible to attack in two ways:
- There’s a single point of failure
- Human error is unavoidable
With blockchain, digital signatures and the decentralized nature of the technology ensures the security of our identity, while still allowing for others to validate who we are. We explained this in a recent blog post:
“A digital signature is created by computing a signature over the transaction. If the transaction changes, it will result in a different signature. If the digital signature attached to the content does not match the digital signature that is computed for the content, then the content is rejected as invalid.”
You may have already seen this in action as you purchase cryptocurrency. At a higher level, the decentralization of identity, and the ability to confirm that identity outside of a central source, is called self-sovereign identity. Phillip Windley, enterprise architect and contributor for Computer World gives a great example: presenting your I.D. to a bouncer at a bar:
“The DMV is the claim issuer and gives you, the claim holder, a digital representation of your driver’s license. The DMV uses keys linked to their decentralized identifier on the blockchain to sign the claim so that it is tamper-evident and anyone who gets it can validate that it was issued by the DMV. You have a wallet to hold your claims and can use keys linked to a decentralized identifier that you control on the blockchain to countersign the digital driver’s license.
When the bar needs to see that you’re of legal age, you can present the digital driver’s license and the bar can verify that it hasn’t been changed, that the DMV issued it to you, and you’re the one presenting it. Everyone can use the blockchain to lookup decentralized identifiers and retrieve any associated public keys.”
As with any new technology, there are those who believe one thing and those who believe another. The question of whether we can actually protect our digital identity on the blockchain is still not answered in black and white terms, but we’re only just beginning.
“With bitcoin and blockchain, we’re in the same place the internet was in 1990 or 1993. The real serious ‘killer’ app — inflection point — hasn’t been reached. We’re in the email phase, and we don’t have the web yet.” — Andreas M. Antonopoulos, author of Mastering Bitcoin and The Internet of Money.