Blockchain can help industries fight fraud, boost margins and build brands. Using blockchain’s distributed ledger, synchronized database and powerful encryption capabilities, along with its ability to generate smart contracts, diverse industries can effectively collaborate and enhance trust across the business processes as well as with the end consumers.
Blockchain – the technology underpinning the Bitcoin cryptocurrency – can help industries from diverse identical and nonidentical challenges. Blockchain if implemented thoughtfully can provide low-cost immutable trust at every step of the business operations, from product design to production, record-keeping to transactional information, supply management to building a brand and ensuring customer’s trusts.
As Gartner found insight in its Trend Insight Report (Published at 3rd March 2017) Blockchain is evolving from a digital currency infrastructure into a platform for digital transformation. The digital world is going crazy for blockchain for the last year or so.
In the following posts, we will explore how the bold and innovative use of blockchain can help diverse industries becoming faster, cheaper, more secure and much more visible to both the owners and users of different range.
What Is Blockchain And How It Works?
The blockchain is an open-source distributed database. It uses state-of-the-art cryptography, hence blockchain doesn’t need intermediaries to authenticate or to settle transactions. As it employs cryptography, blockchain is available as a distributed database. It also keeps records of every transaction.
What Else Could It Record?
Well, it could record any structured information. Thus, it not only record financial transactions but keeps records of who married whom or who owns what land or even what light brought power from what power source. The digital connectivity Internet of Things offers, we are going to need a blockchain-settlement system underneath. Blockchain offers an immutable, unhackable distributed database of digital assets. The implications are staggering, not just for the financial-services industry but also right across virtually every aspect of society.
How Disruption Can Occur
With Bitcoin, blockchain came but the technology has brought serious disruption. Blockchain revolution not only impacted financial services but holds huge potential to disrupt any industry. Goldman’s report, titled “Blockchain: Putting Theory into Practice” throws some light up the real-world applications for blockchain technology. The bank has examined the technology’s application in 5 markets. Here we have summed up its thinking and how those industries are interested in the blockchain.
1. SHARING ECONOMY: Building trust on platforms like Airbnb
In blockchain, store people’s online identities. That identity further linked to reviews and scores on the sharing economy and other marketplace sites – a little like with Facebook. This enables people to check that you are a trusted host or not since they can see your ID number. Unlike current social platforms, it would not be easy to delete accounts and re-register as people were used to when receiving bad reviews. In the case of the blockchain, it would not be possible to temper the records. Your identity is your identity.
Blockchain comes forth with a tamper-proof system. Hence it would not be easy to amend things in digital credentials and reputation. Airbnb has opted the process and has transformed the lodging industry by making a public market in private housing. Nonetheless, adoption has certain limitations in terms of safety and security (guest) and property damage (hosts), but it could help accelerate the adoption of P2P lodging.
2. ELECTRICITY MARKET: Letting houses generate and sell their own electricity
The second trend that Goldman envisions is electricity market where houses will generate and sell their energy over a distributed network. The network will set-up on blockchain’s technology and all the transactions will be signed off by the network. Since everything will be there in blockchain records, a user could not deny that they didn’t buy electricity from you.
In the era of rooftop solar and high-end battery technology, individual homes will be able to play the role of distributed power providers. Blockchain there will play biggest role since it will be the base of secure transactions of power between individuals on a distributed network who even don’t share an existing relationship.
3. PROPERTY: Cutting admin costs by keeping records on the blockchain
Blockchain could bring massive change in the way properties were sold or bought. Share records about property on the blockchain and allow prospective buyers to quickly, easily and cheaply verify that the owner of a house does own the place. Currently, this process is done manually and often involves extra costing due to the higher chance of errors, which is a regular occurrence.
The firm found a specific-use case of the new technology in the US where lenders require title insurance for issuing a mortgage to protect their interests. Since the title search process is labor-intensive, blockchain there will help reduce title insurance premiums… by reducing errors and manual effort.
4. SECURITIES: Cut out errors, thereby reducing costs
In spite of the generally low exchange costs for securities like equities, up to 10% of exchanges are liable to different errors. It promotes manual intervention and stretching out the time required to settle exchanges.
Having blockchain to clear and settle money securities – particularly equities, repo, and utilize advances – Goldman estimate the business could spare $11 – $12 billion in fees, OpEx, and capital charges all-inclusive by moving to a shorter, and conceivably modified, settlement window. The company also believe blockchain could likewise possibility take out huge additional costs across FX, commodities, and OTC subsidiaries.
5. FINANCE: Improve, anti-money laundering and “know your customer” checks
The identity data stored on a blockchain could help finance firms effortlessly and rapidly check new clients as a feature of “know your client”. Goldman envisions this identity data will work as a digital passport.
The stored account and payment information in a blockchain could standardize the data required for an account. This further enhances data quality and diminishing the quality of erroneously recognized “suspicious” exchanges. A tamper-proof record could likewise facilitate the way toward becoming more acquainted with a customer and demonstrating consistency with AML directions.