Blockchain Use Cases
According to Spendmenot, 81% of the 100 largest public companies hint that they use blockchain technology, and 80% of global executives consider blockchain “very important.” They have also stated that global spending on blockchain solutions is anticipated to reach $19 billion in 2024. These statistics prove the significance of blockchain in the business world and how it will become prominent in the upcoming years.
In this article, we will walk you through blockchain use cases by industry and how it solves several current limitations and challenges the industry faces.
Top blockchain use cases in 2023 include:
- Digital Identity
- Supply Chain
- Real Estate
- Banking Sector
- Asset tokenization
- Blockchain Advertising
- Anti-Money Laundering (AML)
- Cyber security
- Patent ecosystem
The finance industry is an early adopter of blockchain technology as they have been leveraging the benefits of blockchain use cases for more than a decade. Blockchain solves major industry challenges, such as security threats, increased costs, long settlements and auditing time, irregular compliance, unethical behavior and more. It can, thus, provide security, transparency, reduced costs, risk control, instant settlements and better auditing. Blockchain has also introduced Decentralized Finance (DeFi) into the finance industry, removing any third-party intervention in financial services using smart contracts.
Blockchain in finance has the following use cases:
- Cross Border Payments
- Stock Exchange
- Credit Score
- Lending Platforms
- Fund Investment
- Financial Record Keeping
- Invoice Management and Billing Solution
- Government Expenses
- Political Funds
- Initial Public Offering (IPO)
The current centralized Web 2.0 faces major concerns like identity theft issues, selling of personal data to third parties, usernames and passwords getting mixed up and more. It fails to establish a self-sovereign identity (SSI) for users. Blockchain, however, can give the users total control of their digital identities and the information within their ID, thus, paving the way for SSI.
Moreover, self-sovereign identity can facilitate interoperability, especially in the metaverse and carry one’s identity across different metaverse projects through Avatars. The general population would also benefit greatly from a system that makes it possible for them to be identified most securely.
A blockchain-based digital identity management system is the solution. Large corporations are also aware of the need and are working to develop apps that will enable the creation of digital identities for their workers and the general public. Although creating a worldwide identity is still a long way off, the effort has already begun in that direction.
Blockchain in payment facilitates secure, fast, low-cost international payment processing services using encrypted distributed ledgers that enable trusted real-time transaction verification without any intermediary intervention. Blockchain networks like Stellar or Ripple promote peer-to-peer cross-border transactions and payments automated with smart contracts. Blockchain in the payment sector offers the following use cases:
- Digital identity verification
- Automated Know Your Customer (KYC) processes
- Better Anti-Money Laundering(AML) protocols
- Peer-to-Peer transfers
- Cross-border transactions
- Protection against cyber crimes
Blockchain’s core attributes like transparency, immutability and decentralization of a blockchain make it irresistible to integrate into the present-day supply chain, which is prone to errors due to various factors, including rapid changes in the market, corruption, and lack of transparency and high costs.
Blockchain in the supply chain can replace a slow, manual process that relies mostly on paperwork with an end-to-end fast digital process offering visibility and transparency. Blockchain enables tracking and traceability of supply chain operations, enables better utilization of inventory, improved quality, fast delivery and less loss of revenue from black or grey market products. Blockchain can, thus, be used in the following aspects of the supply chain:
- Supply chain finance
- Supplier payments
- Reducing counterfeit products
- Supply chain logistics
- Diamond tracking
- Food safety
- Oil supply chain
- Enforcing trade policies and Tariffs
Presently, if you intend to purchase or sell a plot or a house, a long process of documentation, verification and transfer of ownership for both parties is required. As more paperwork is needed, things become more complex if you take a loan. Fraudulent activities are also common.
Blockchain, however, can resolve all of these problems. You should use blockchain if you want to purchase a home more quickly. Blockchain enables tokenizing physical goods, indicating that sellers can utilize smart contracts to market their real estate.
By incorporating a legal procedure within the smart contract, they can execute it once the conditions are satisfied. For instance, if the buyer pays the sum, the legal ownership of the property is quickly transferred to the buyer. By assuring security, transparency, and immutability, real estate blockchain can also help eliminate fraud.
Blockchain has the potential to change the financial industry by making it more dependable, efficient, transparent, and flexible. Blockchain is a one-stop solution to the major challenges in banking like inefficient record maintenance, security threats, inconsistent supervision, high payment cost and time consumption. Every stakeholder operates as a node in the banking sectors that use blockchain technology, eliminating mediators. Moreover, smart contracts execute quick transactions with less cost.
Data management is guaranteed security, transparency, and privacy with blockchain in banking services. The zero-knowledge proof technology developed for blockchain authenticates financial information without disclosure.
Blockchain use cases in the banking sector include:
- Clearance and settlement
- Lending and borrowing
- Trade finance
- Accounting and bookkeeping
- Making credit reports
Blockchain supports the tokenization of digital assets, company’s shares and many real-world assets. Users can also transform physical assets into digital assets and then represent them on the blockchain via fungible and non-fungible tokens (NFTs). Almost every asset type can be tokenized, from classic asset classes like bonds, real estate, venture capital funds, and commodities to exotic asset classes like artwork, sports teams, and racehorses.
Blockchain, being an immutable public ledger, ensures that the ownership of your purchased tokens cannot be deleted. Tokenization of assets offers the following benefits;
- Elimination of third-party
- No territorial barriers
- Quick and cheaper transactions
- Improved liquidity
- Broader Investor base
- Fractional Ownership
Currently, the advertising industry is plagued with problems, including expensive intermediaries, lack of transparency and accountability, inefficiency, advertisement fraud and more.
It is feasible to create effective ad funnels with numerous layers of checks providing improved targeting and ROI using Blockchain-based smart contracts. Additionally, because Blockchain networks require majority agreement from all their nodes (members), they can increase overall security for the advertising sector.
Blockchain in the advertising industry promises the following:
- Consumer data privacy
- No middlemen
- Reduction of ad frauds
- Improved ad exchanges
- Decentralized as network
- Consumer trust
Anti-Money Laundering (AML)
With globalization and technological advancements improving business operations, digital financial crimes, especially money laundering, have also taken advantage of the new technologies. According to extensive research conducted by Zippia, approximately $300 billion is laundered annually in the US.
Blockchain in AML can help simplify the Know-your-customer process and overcome money laundering threats. A public blockchain ledger can monitor, validate and record each transaction’s complete history, which cannot be altered or deleted. It facilitates overall system analysis instead of supervising the entry and exit points.
Creating a blockchain-enabled AML/KYC platform helps streamline AML/KYC procedures by recording data and information about KYC and AML on a decentralized ledger. A blockchain ledger’s data is always transparent to every network participant, and AML/KYC data management on the blockchain can therefore aid financial businesses in maintaining data smoothly.
Blockchain and decentralized storage systems can enhance cybersecurity. Since data is stored decentralized and the risk is dispersed among multiple nodes, hackers won’t have a single entry point. Businesses frequently rely significantly on a centralized system, which is not the best option for data storage, at least in terms of security.
With its decentralized and distributed architecture, blockchain can increase Domain Name System(DNS) security and Distributed Denial of Service(DD0S) attacks may also be lessened. The system’s security can also be improved in other areas, like messaging. Immutability also prevents fraud and data theft by hackers. As such, blockchain has the following use cases for cybersecurity:
- Secure private messaging
- Secure DNS and DDoS
- IoT security
- Reduced human safety adversity caused by cyberattacks
- Provenance of software
- Verification of cyber-physical infrastructures
The education system has undergone a huge transition over time. At present, aspirants can counterfeit a degree, diploma or any education certificate from any desired university. People even make fake degrees and claim they graduated from a specific school. Such incidents make it hard for employers or hiring managers from any company to prove the legitimacy of a candidate’s educational details.
Implementation of blockchain in education can prevent forged educational certificates by storing the complete data of students in the digital ledger with tamper-proof attributes. Moreover, educational certificates can be stored and issued on the blockchain to create digital certificates and make the system paperless. Universities or schools must only render a link to validate the educational qualification. Other use cases of blockchain in education include:
- Safely storing educational records in the blockchain
- Record-keeping of information related to scholarships, salaries for teachers and other funds
- \Making credentials more credible
- Cost-effective storage of large files
- Automated learning platforms
Maintaining documents intact and in the same location can be challenging for patients, and the documents become more difficult to maintain when the patients visit multiple doctors. Although the digital mobilization of health care information, known as Health information exchange(HIE), can help track medical records, it is prone to data privacy and security issues.
Blockchain technology, however, can be leveraged to store patient data securely. They can be updated whenever the patient visits their doctor and accessed anytime. According to a report by Hipaajournal, 4,419 healthcare data breaches of 500 or more records were reported to the Health and Human Service(HHS) office for civil rights between 2009 and 2021. Blockchain prevents data breaches as it leaves no room for any forged data due to its immutability. Overall, both patients and professionals benefit from this arrangement.
Likewise, blockchain can help track medicines and thus enable the removal of fake medications from the medical supply chain. Blockchain in healthcare can also be used in Genomics, the study of complete sets of DNA in organisms, including their genes, and to improve provider-patient communication.
The traditional patent system has several limitations due to inaccurate ownership records of assets or the inability to choose the right patent for one’s business. Maintaining digital content’s ownership, openness, and privacy is also difficult. For instance, a song, video, or other digital content uploaded online is often used without the owner’s permission.
Blockchain in the payment ecosystem can solve this issue to a great extent. Patents on the blockchain are exclusive rights granted by a governing body, such as a sovereign state or international body. The creator is granted the sole authority to divulge the specifics of the creation to the general public.
Since the invention of Bitcoin, blockchain patents, which guarantee a business value of trust, have become increasingly significant. It uses a distributed network to store, broadcast, confirm, and exchange data instead of involving a third party in its operations. This improves secure cooperation, progressive protection, and extended IP safety. It delivers trust and value at a low cost.
At the moment, getting insurance requires complicated processes when filing a claim, necessitating continuing to communicate with your insurance agent and a sizable amount of documentation.
The blockchain helps streamline the claims settlement process since it can securely store information that can then be verified to process the claim. The claims are then dispatched to the appropriate parties after being uploaded to the blockchain network. After reviewing the data, the parties release the insurance.
Smart contracts can also enhance the automation of the claims process, allowing users to submit claims easily and receive them after approval. Blockchain can significantly transform insurance processes by eradicating paper-based contracts, reducing turn-around time, and exposing fraudulent claims.
It is surprising to see how blockchain has been transforming various industries and how blockchain use cases continue to reinvent with time and changing trends. From financial services to real estate to supply chain and healthcare, blockchain is integral. With this steady growth of blockchain use cases by industry and the mass adoption of blockchain in various domains, it is assuredly going to be the face of the future.
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Blockchain patents are the exclusive rights given to an innovator in exchange for providing details for their invention on a public domain.
Blockchain provides a decentralized ecosystem that makes it impossible for the attackers to penetrate through the IT systems and ensures data protection.
Implementing Blockchain in AML helps overcome money laundering issues by tracking and monitoring transactions done by people regularly.