The Many Use Cases Of Blockchain
A blockchain (think distributed ledger) can be public or permissioned. In a public blockchain, anyone can read chains, make changes and write to blockchain following the set rules. Bitcoin & Ethereum, for example, are built as public blockchain.
If we put a restriction on who can read, transact and serve on the network, it becomes a permissioned blockchain. There can be many hybrid variants of the permissioned blockchain depending on how the permissions are distributed. One such variant will be — read permission for all but only selected authorized users can add new nodes (say for transaction verification, mining). In a private blockchain, a single organization or entity will control the network and access rules. If multiple organizations control a blockchain, it can be called a consortium blockchain. If the blockchain is run by a single company which provides access to users on pre-defined criteria we can call is semi-private blockchain.
All the major experimentation in enterprises is around permissioned blockchains. And many cloud providers are making it easy to set up such blockchains to build solutions for different use-cases:
Blockchain is a fundamental concept — you can think of something as fundamental as data structures in Computer Science. Blockchain can be used for efficiently solving a number of existing use cases in addition to the many new use cases where it can be applied. Let’s look at some of the use cases of blockchain across different domains.
Finance/Banking :
Blockchain started with Bitcoin — which is a cryptocurrency. We do have a number of cryptocurrencies now — all based on the blockchain. There are many other uses cases of blockchain in the finance/banking sector.
- Initial Coin Offering:
ICO is a new way to raise funds. It allows companies to raise funds bypassing the regulated capital-raising process required by venture capitalists and banks.A percentage of the cryptocurrency is sold to early backers of the project via ICO in exchange for legal tender. Check some ICO stats here. Telegram, encrypted messaging platform, is raising ICO for its blockchain platform.
2. Hedge Funds:
Companies like Numerai are decentralizing the hedge fund model. Encrypted datasets are sent to data scientists for building predictive models and the best contributors are rewarded with its token Numeraire. As they say — it’s an AI hedge fund on Ethereum.
3. Payments & Settlements:
Blockchain can be used to build a real-time settlement system for quick payment processing. Ripple has built one such system. Ripple connects banks, payment providers and digital asset exchanges via RippleNet to provide one frictionless experience to send money globally. Veem and Bitspark are other companies working in this domain.
Banks are using blockchain for expediting back-office operations and settlements.
4. Prediction Markets:
Augur is an open-source, decentralized, peer-to-peer oracle and prediction market platform built on the Ethereum blockchain.It rewards businesses and individuals for correctly predicting the outcome of real-world events. Another platform, Stox, allows it’s users to trade the results of real-world events. Yet another platform, Gnosis, allows building custom prediction market applications on top of its blockchain platform.
5. Insurance:
Blockchain can solve use cases related to claims processing in the insurance sector. Many companies are attempting to build solutions with blockchain to prevent insurance fraud and digitally track medical records. Cognizant has teamed up with 14 Indian insurance firms for development of a blockchain based platform for cross-company data sharing.
Smart Contracts:
Smart Contract is by far the most disruptive outcome of blockchain technology. Smart contracts are contracts written in code and embedded onto a particular blockchain. The code contains all information needed for the fulfillment of contract and all relevant actions get executed automatically once the set terms are met. Ethereum Smart Contracts are by far the most popular and also most extensively used.
Real Estate:
Blockchain can bring total transparency in real estate transactions. All the flaws of paper-based transaction recording go away when we put the data on a blockchain. Fraud prevention, low transaction costs, efficient and secured land title tracking are some of the key benefits that blockchain offers for real estate industry.
Companies like ubitquity have already built SaaS-based blockchain platforms for securely recording, tracking, and transferring deeds. Dubai Land Department is employing blockchain in three initiatives — Ownership verification in DLD Mobile Application, Property sale by Developer and Smart Leasing Process.
Digital Identity/ Verification:
We use badge, cards and many other things to provide identity. Blockchain can be used to verify the identities. Any company or entity can put the identity info on a public blockchain and then those who want to verify can query the blockchain. Civic is one of the companies providing secured access to companies and individuals. They also have solutions around some of the related use cases — reusable KYC, ID theft protection. There are a many companies working in the domain of digital asset verification — gem.co, factom and many more. Dubai is planning to have blockchain tech based digital passports.
Distributed Storage/Computing:
Using blockchain we can decentralize cloud storage and computing. Solutions built in this domain will incentivize user for sharing storage or computing power. Filecoin is a decentralized storage network — kind of AWS S3 like service with the difference that its distributed storage. Users are paid Filecoins for storing files. Clients can tune the storage strategy to find the correct balance between redundancy, speed of retrieval, and cost. Storj is another similar provider. Golem is bringing the same concept to computing power.
Voting:
Any voting use case will have — user authentication, secured storage of votes cast and counting of votes by trusting authority to declare winner. Blockchain can provide needed infrastructure for casting, tracking, and counting votes.Delegating audits to the general public or a group of people will ensure there is no foul play.
Health Care:
One of the use case that blockchain can solve in this domain is sharing/interoperability of health data. If the health information for patients is exchanged seamlessly — it will definitely lead to better results. Here’s a report that details out how AI researchers used blockchain to share medical data. Proof Work is a patient first healthcare system leveraging blockchain
Supply Chain/ Retail:
BlockVerify takes care of these supply chain use cases — identifying counterfeit products, identifying diverted goods, tracing and locating stolen merchandise, tracking fraudulent transactions. Built on Hyperledger, skuchain provides tools for enterprises to leverage blockchain. Its Popcodes solution allows tracking of goods flow at SKU level. Chronicled provides smart supply chain solution for the secure exchange of physical assets.
Sharing Economy:
Arcade city is the peer to peer ride sharing network built on top of a blockchain. The company is building a global network of local driver cooperatives called guilds. Guild drivers work together to provide reliable service to their local area. Checkout their whitepaper. Lazooz is another such application. Application of blockchain is not limited to just ridesharing. And ideal platform will have all people who are sharing, as the owners of the platform and not just service providers, those who want to avail services will search for the same by querying blockchain, make the payments by selling tokens they have purchased from actual currency and those providing better services will be rated well and earn more tokens than others.
Internet Advertising:
Blockchain-based digital advertising will allow publishers to target users without any brokers in between. Brave has created an Ethereum based blockchain platform wherein tokens can be exchanged between publishers, advertisers, and users. The token can be used to obtain a variety of advertising and attention-based services on the Brave platform.
Licensing:
Any digital content that is used by consumers can be converted into “smart content” that executes licensing transactions itself on a blockchain. For instance, JAAK provides a platform to build “smart content” for music and media industry. Platforms like license.rocks provide a decentralized licensing framework.
IoT:
A number of interesting use cases can be solved when we integrate IoT devices with blockchain. Using blockchain as a public ledger for a number of IoT devices, we can build peer to peer telemetry systems. Databroker dao allows monetizing sensor data with the help of blockchain. Slock.it converts any object into a smart object — you can rent, sell or share anything. Blockchain-based solutions from filament enable connected machines and devices to transact and exchange value against a blockchain, taking enterprise and industrial IoT connectivity benefits to the next level.
Energy:
Traditionally energy exchange has been centralized — one company will be distributing energy to consumers. With blockchain, consumers can participate in decentralized energy generation schemes. Blockchain can be applied to energy production, consumption, trading and management. Grid singularity is creating a platform for decentralized data exchange.
LO3 Energy is building blockchain solutions to drastically change how energy is generated, stored, bought, sold and used at the local level.
Sports:
As of now, sports management agencies sign up athletes. They kind of invest in athletes and then reap off the benefits when players perform well by getting a share of athletes’ future earnings (brand endorsements, events and many more). If we allow fans to invest in athletes by using some blockchain based currency or tokens, they can earn if the athletes perform well (get a share in athletes future earnings). A blockchain based platform built for this purpose can also share additional incentives like seat upgrades, VIP events etc. Jetcoin institute is building one such platform in sports and entertainment domain.
Job Market:
Appii leverages blockchain to verify details mentioned on a CV. It stores details of education, accreditations, awards and employment history securely on a blockchain ledger.
There are many other use cases where blockchain can be applied. But the thumb rule is, blockchain should be used for the sake of using it!
As per this Nov 2017 study by Deloitte, only 8% of blockchain projects were actively maintained and the average lifespan of the projects was 1.22 years!
Do not use blockchain if your use case does not demand it. For instance, if your use case needs a database and many users will update the database and the users need to trust each other and the system will have interdependent transactions or some interaction between transactions — blockchain is a good fit. For most other things, using blockchain will be over-engineering for your whims and fancies.
About Author
Arpit is a seasoned technologist with vast experience in leading large cross-functional and cross-geography teams. Arpit also consults clients on competitive market analysis, defining MVPs, product ideation, product monetization and go live strategies.
Arpit believes we should all contribute back to society. He has set his goals for social work in five broad areas. You can read more about the same in his blog post “Do Good, Together” on Tumblr. Arpit is interested in working with people who want to contribute towards the same goals.
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