3 Biggest Uses of Blockchain in Business

The hype and buzz around blockchain subsided and gave place to real-life uses, as well as wider adoption of the distributed ledger technology.

4th Oct 2019
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Blockchain

The hype and buzz around blockchain subsided and gave place to real-life uses, as well as wider adoption of the distributed ledger technology. Now, enterprises don’t doubt whether blockchain is worth their attention. Having gained knowledge of the disruptive technology, companies and businesses in various industries have started implementing blockchain in their infrastructure. The tech experts scrutinize DLT to find new ways of blockchain application. Thus, blockchain-based startups are popping up.


Although the blockchain market was worth only $1.2 billion in 2018, it is predicted to reach $20 billion by 2024. According to these forecasts, the DLT technology will be proliferating in the years to come.


Blockchain potential is enormous. The DLT technology can be applied in various industries from crypto gaming, to healthcare, to education due to its decentralized nature, high scalability, and resistance to fraud. Let’s highlight which businesses have already introduced technology and succeeded in this area.     


1. Banking and Fintech

Ironically, being the biggest rebels against blockchain once, banks and fin-tech companies have now turned to the sector showing the fastest rate of adoption. Among the major blockchain-friendly banking institutions are Goldman Sachs, R3, Barclays, HSBC, JPMorgan, and many others. The list of banks and financial institutions using the tech is constantly growing and currently, it includes over 200 organizations. The expenses on the blockchain technology implementation are increasing at the same scale and already reached $1.7 billion in 2018.


What improvements does blockchain offer to the banking sector?

●    Smart contracts (self-executing contracts) can automate the entire lending process, significantly reduce time spent on monitoring, and eliminate red tape. All customer information will be stored within the blockchain.  

●    Trade finance is still mostly paper-based. DLT makes trade financing more efficient and inclusive because it allows banks to share information easily and maintain confidentiality at the same time.  

●    Clearing and settlement. Management of loan documentation and its reconciliation, estimation of security costs, etc. are the tasks that are currently performed manually. These will be streamlined using a distributed database. 

●    Cash supply chain. The flow of money from facilities to the banks and from the central bank to its branches can be easily tracked and managed. 

●    KYC and AML. Digital verification processes powered by DLT allow banks to put the client information in order. One organization will be able to access the customer verification details from another organization.

All the listed improvements will dramatically reduce the processing costs and potentially save banks millions of dollars.


2. Retailing

Food store Walmart and large retail platform Alibaba were blockchain pioneers in the retail industry. They first discovered the advantages of using the blockchain network to track product movements in the supply chain. This is a single solution to 3 concerns: safety, transparency, and authenticity.


Recording the product’s path from farms to stores eliminates the risk of counterfeiting. Without DLT it’s hard to track the origin of goods in a large retailer’s supply chain. The distributed database also allows determining and removing the recalled products quickly. The clear picture of the product's origins and transparent way of providing this information benefits the retailers who have decided to implement blockchain.


IBM’s Food Trust blockchain platform is one of the largest projects focused on food safety. The world's biggest groceries and retailers including Nestle, Albertsons Companies and Carrefour have joined IBM’s network to build customer trust via transparency.


Blockchain benefits for retailers

●    Monitoring transactions all along the supply chain;

●    Reducing costs, time delays, human errors;

●    Trace the origins of products. 


3. Internet of Things

In 2019, the global IoT market has been valued at $212 billion. It is likely to grow at a fast pace in the years to come as the demand for IoT products increases. The biggest demand comes from the banking and financial sectors (share of 21.1%) because the adoption of this technology improves and enlarges the operations of money institutions.


The main problem of IoT is that it handles tons of information, which is vulnerable to hacks due to the lack of protection. The second issue is that data management should be streamlined. Blockchain resolves both challenges and enhances the IoT functionality.


IBM collaborated with Samsung to build a blockchain-based network of IoT devices called Autonomous Decentralized Peer-to-Peer Telemetry. Using blockchain as a distributed network for a large number of devices with no central control system provides for autonomous interaction between them. There are a few concerns though — bug fixing, energy management, software updating.  


Blockchain improvements for IoT networks

●    Enhances security via device authentication; 

●    Makes devices’ functioning fully autonomous;

●    Provides real-time data on accessing, transacting, and other interactions with the device;

●    Advances data exchange.


The bottom line

It’s important to understand that blockchain is not an all-encompassing solution to all problems. Before adopting DLT, every business regardless of the sector must examine which aspects can be improved with the help of blockchain and how. Applying it will indeed enhance the organization’s workflow and make it cost- and time-effective. The businesses leveraging the power of blockchain spread awareness and pave the way for other companies.  


Blockchain is not only the technology powering cryptocurrency, it has multiple applications beyond the financial sector. As a result, today 53% of companies consider blockchain as a top 5 strategic priority, 56% think that DLT will disrupt their business, and only 6% of respondents see no reason for adopting the technology. 

The hype and buzz around blockchain subsided and gave place to real-life uses, as well as wider adoption of the distributed ledger technology. Now, enterprises don’t doubt whether blockchain is worth their attention. Having gained knowledge of the disruptive technology, companies and businesses in various industries have started implementing blockchain in their infrastructure. The tech experts scrutinize DLT to find new ways of blockchain application. Thus, blockchain-based startups are popping up.


Although the blockchain market was worth only $1.2 billion in 2018, it is predicted to reach $20 billion by 2024. According to these forecasts, the DLT technology will be proliferating in the years to come.

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