What Are Blockchain Use Cases?

What Is Blockchain?

by DailyCryptoInfo 192 Views

What Are Blockchain Use Cases?

What Is Blockchain?

by DailyCryptoInfo 192 Views

Blockchain has great technical features, it uses a distributed ledger technology, it is able to have smart contract logic encoded into it, and it is cryptographically secured. Important use cases which will greatly reduce inefficiencies and unlock value are in areas of existing industry where trusted intermediaries are required to record, validate and reconcile transactions without really adding additional value to the original transaction.

Blockchain in Banking

Last year Barclays placed themselves at the forefront of adoption by implementing the security and transparency aspects of blockchain technology into their transaction processes. This multinational bank did so by announcing a first of its kind, blockchain-backed credit transaction between Ornua and Seychelles Trading Company. It included the first trade documentation to be encrypted and managed on a blockchain network. The use of a decentralized ledger to store and send the documents saved the bank significant time and money on the transaction, a far cry from the costly ten-day process it would have taken Barclays via traditional channels.

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The accounting and professional services company Deloitte has recently published a report which outlines key advisory principles for blockchain adoption on a global scale, elaborating on areas such as macro implementation in governmental and legal practices, or cybersecurity controls. Comprehensive, data-driven research by a trusted information source such as Deloitte clearly signals the demand for information by similar financial institutions who want to understand how their banks, hedge funds and similar organizations can find their own blockchain use cases.

While it may not be as media-worthy as fintech or trading, the method of recording loans and securities by banks could also take advantage of blockchain technology. Accenture has recently estimated that the global financial industry could save up to $10 billion by using blockchain to store and process clearing and settlement. Similarly so, when a US company raises capital using a syndicated loan it can take up to 19 days for the transaction to be completed by the banks.

Blockchain in Healthcare

Blockchain technology offers a means to automatically create a record of who has accessed information or records, and to set controls on permissions required to see information. This also has important implications for health records.

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Using blockchain technology to record patient information on a distributed ledger can allow different stakeholders conditional access to a single source of truth where each interaction with a patient’s health data can be recorded on a ledger as a transaction with a time stamped audit trail.

This makes access to a patient’s health information more secure (patient data is encrypted), can take out the inefficiencies with current data management practices and offers patients more control over their own health data (including monetizing their own health data for research purposes ).

Smart Contracts & Dapps

A helpful working definition from Investopedia is that "smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code."

Smart contracts are contracts written in code and embedded onto a particular blockchain. The code contains all the rules, conditions, expiry dates and all other relevant information needed for its fulfilment, which execute automatically once the terms are met.

As such, ethereum’s primary purpose is to be a platform for smart contract code, comprising of programs controlling blockchain assets, executed by a blockchain protocol, and in this case running on the ethereum network.

As opposed to traditional contracts, a smart contract example would include conditions pre-written in a programmer language which is very different to ones based on human language, which can be very subjective and open to judicial interpretation. Instead, a smart contract behaves in predefined ways and is automated in the pattern of “if this happens, then do that”, which is a more objective, data-driven way to ensure contract conditions are met.

Smart Contract Use Cases

While the technological basis for these inventions sounds theoretically appealing, it is also important to note that smart contracts are being used in everyday situations. To give a specific smart contract example, in 2016 financial company Markeit utilised smart contract technology to create and manage a fully functioning network of credit default swaps trading. There is also a significant push and legal debate regarding the validity of smart contracts in selected legal proceedings. It is likely that in the future lawyers will switch from writing traditional contracts to a sort of a hybrid, where contracts are written in code, verified in blockchain, but also backed by a traditionally articulated version.

Dapps

The Birth of Decentralized Applications

As the concept is still in its infancy, there might not be one definition of what a Dapp is. However, there are noticeable common features of Dapps:

  • Open Source. Ideally, it should be governed by autonomy and all changes must be decided by the consensus, or a majority, of its users. Its code base should be available for scrutiny.
  • Decentralized. All records of the application’s operation must be stored on a public and decentralized blockchain to avoid pitfalls of centralization.

Incentivized. Validators of the blockchain should be incentivized by rewarding them accordingly with cryptographic tokens.

Decentralized Government

Current voting systems are some of the most outdated, inefficient and manipulation-prone aspects of modern governance. Blockchain technology can be implemented to help encrypt and easily trace back the validity of the voting ballots of individual citizens. The decentralized ledger managing blockchain voting data also means that results are not processed by a central entity, which eliminates the risk of voting result manipulation in corrupt countries.

Another key feature of governance which will be revolutionized by blockchain uses is notarization service. Such administrative timestamps validate the exact time an action takes place in a citizen’s life; starting from events such as birth and death, but also when receiving new identity documentation, receiving certificates of education or exchange of ownership titles. Much of these processes are still done either on isolated databases or via brick-and-mortar bureaucracy, which is prone to mistakes. However, due to the encrypted nature of the data stored on a blockchain, all of these recordings will be safe and only visible to the owner or permitted parties.

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Just as with a decentralized government ledger managing governmental procedures, voting and documentation, it is easy to apply a blockchain example with a trustless ledger that can be beneficial in fairly managing and efficiently distributing social welfare funds in countries that might not be lucky enough to afford reliable, traditional and centralized infrastructure.

Difference between centralized and decentralized government

A centralized government is one in which power or legal authority is exerted or coordinated by a de facto political executive to which federal states, local authorities, and smaller units are considered subject. In a national context, centralization occurs in the transfer of power to a typically sovereign nation state.

A decentralised government, on the other hand, is form of government with its top-level decision-making processes dispersed throughout the system rather than concentrated in one person, place or legislative body.


All constituted governments are, to some degree, necessarily centralized, in the sense that a theoretically federal state exerts an authority or prerogative beyond that of its constituent parts. To the extent that a base unit of society — usually conceived as an individual citizen — vests authority in a larger unit, such as the state or the local community, authority is centralized. The extent to which this ought to occur, and the ways in which centralized government evolves, forms part of social contract theory.

Customs Declarations


Blockchain and Internet of Things (IoT)

Current IoT networks rely on centralized communication processes, known as the ‘Server/Client Paradigm.’ This means that any interaction between devices needs to be processed by a monolithic, central database, even if they are positioned next to each other. While this method has allowed the internet as we know it to flourish, it is not sustainable to process the waves of data that future IoT networks will produce and demand to support.

Blockchain will help the nascent Internet of Things industry secure new, decentralized networks and process huge swaths of information in real time. It will also open up new avenues of inter-device cooperation and monetization.

The implications of IoT are as important for the end user as for the global industry. This technological phenomenon will vastly improve the collection of data, especially how, when, where and why it is collected.

According to recent estimates, an average person creates almost a Gigabyte of data each day. With this statistic in mind, the idea of an ecosystem of ‘smart’ everyday devices interacting with us during our daily activities, otherwise known as the Internet of Things is rapidly becoming a reality.

Blockchain in Real Estate

The next generation of blockchain use cases is best accomplished by focusing on the real estate industry, as it's the industry my company operates in. But that’s just one industry example of many, as I’ll explain a bit further down.

It is also one of many industries driven by transactions, contracts and a desire for the highest level of security possible.

t is easy to envision how properties of all kinds could be liquified, tokenized and traded much like stocks on exchanges. This blockchain example will also positively affect transaction times as property sellers find they can sell fractions of shares on a particular property, as opposed to having to search for a single buyer. As well as this, it is more than likely that the whole real estate industry will benefit from this shift, by lowering the barrier of entry to real estate investment.

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Other blockchain use cases are:

  • Supply chain, asset registration, identity services, fraud prevention and compliance
  • Payment and digital currency

Bockchains provide an opportunity to establish a strong system for digital identity because it is not based on accounts and permissions associated with accounts, because it is a push transaction, and because ownership of private keys is ownership of the digital asset, this places a new and secure way to manage identity in the digital world that avoids exposing users to sharing too much private information.

A self sovereign ID can be used to verify identity without needing an individual to produce numerous documents and paperwork each time they need their identity verified. This could be done with a single key that can be matched against an immutable ledger. The digital ID can also collect other online information about a user’s identity like social security information, medical records and social media credentials and have that stored securely on the blockchain. This can allow users more control of their private data to transact more securely online but more importantly, takes away the power from companies to monetize this data and puts control back to the users.

  • Healthcare payments reimagined with blockchain
  • Food safety and traceability
  • Clinical trial management, outcome-based contracts, patient consent and health data exchange
  • Trade and supply chain finance

One of the biggest problems that firms face when managing their supply chain is the issue of transparency. Blockchains allow multiple parties to access a database to act as the single source of truth. Recorded transactions are immutable, are append only and provide a time stamped audit trail. Blockchains allow a product to be documented in real time as it moves from its original provenance and all it’s touch points. Blockchain technology helps enhance transparency into an otherwise opaque network, helps stop counterfeits and thefts, improves regulatory compliance, reduces paperwork and lessens costs significantly.

  • Global trade digitization

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