Blockchain technology holds endless potential to dramatically disrupt a broad spectrum of industries beyond the storage and transfer of value. Cryptocurrencies may be the most obvious application of the blockchain, but the transparent and immutable nature of the distributed ledger technology presents a multitude of practical use cases.
The key benefit of blockchain technology is the potential it holds to decentralize virtually any system. By allowing individuals to transact in a trustless manner without the interference of centralized third parties, blockchain technology is catalyzing the growth of a new technological ecosystem that technologists and crypto-proponents have termed “Web 3.0.”
The Web 2.0 paradigm shift saw the internet move from a highly technical niche network to an interoperable, highly usable, and accessible collaborative medium, sparking the creation of social media, hosted services, and web apps. The Web 3.0 movement, fuelled by blockchain-powered decentralization, is set to dismantle the vertical organizations that emerged from the Web 2.0 shift, promoting interoperability and collaboration across all industries.
The Web 3.0 ecosystem currently consists of thousands of different cryptocurrencies and utility tokens, distributed apps, trading platforms, industry alliances, and blockchain-based platforms. While blockchain technology may currently be in an early stage of development, the total market cap for the blockchain industry already exceeds hundreds of billions of dollars.
Blockchain technology may not be ubiquitous yet, but it is already disrupting a number of highly centralized industries, demonstrating practical use cases that change the way business gets done. In this piece, we’ll break down how blockchain is decentralizing and optimizing nearly every vertical. It’s important to note that we recognize, blockchain is not a panacea for every problem, however, detailing the various ways it impacts business use cases will help paint a picture of where the technology is headed and where it will be most effective.
1. 3D Printing
Blockchain technology is emerging as the ideal architecture for decentralized systems, such as the rapidly developing network of IoT devices that are becoming commonplace in homes around the world. The inevitable decentralization of manufacturing, facilitated by the advent of the 3D printing age, could see blockchain technology catalyze a new paradigm of on-demand manufacturing and production.
3D printing is a technologically-intensive process. It involves the transmission of data necessary for manufacture which, in turn, necessitates the distribution and tracking of data. Blockchain networks, ideal for the trustless exchange of data for capital, are set to become the cornerstone of distributed peer-to-peer 3D modeling and printing marketplaces.
Deloitte research highlights the need for a “digital thread” within the 3D printing industry that functions as a single, seamless strand of data that links any initial 3D printing design concept to the finished part. In order for the 3D printing industry to scale, complex data-driven events must occur, be tracked, and be logged on an immutable ledger.
The distributed nature of blockchain networks integrates neatly with the decentralized supply chain that is expected to arise from the growing 3D printing industry., The near real-time settlement and exchange functionality of the blockchain allows for instantaneous design changes.
The Genesis of Things project aims to fuse blockchain and 3D printing technology, creating a decentralized global factory that allows users to find and contract geographically relevant 3D printers that meet their production needs. Genesis of Things also focuses on establishing smart contracts that govern logistics, rights, payments, access, and use, as well as tagging manufactured products with an immutable and traceable product memory recorded on the blockchain.
Other notable blockchain-based 3D printing startups include Italy-based platform Politronica Srl, which aims to create a tokenized global distributed 3D printing factory.
One could argue that accounting gave birth to the concept of a blockchain. As a result, accounting is one of the clearest examples of an industry that blockchain has the potential to completely disrupt. If you know anything about accounting you know that the whole industry is built on a series of policies and philosophies surrounding how to record financial inputs and outputs within a system.
Even if you aren’t in the field, you do a little bit of accounting every time you review your bank account. What you’re looking at is a ledger of credits and debits to your account, a record of what money you’ve received, and what money you’ve sent elsewhere. Blockchain is a distributed ledger technology (DLT) and therefore in simple terms is just a decentralized or distributed version of the ledgers we’re all familiar with in both personal and public accounting.
DLT’s will upend the current accounting industry because they essentially promise to automate the main functions that accountants serve. Certified Public Accountants are professionals that we trust to record our financial data and report those records to agencies like the IRS as an accurate representation of where money flowed. Blockchain automates this function by recording every transaction on a public distributed ledger that is immutable since any falsification would be corrected by the rest of the network. Put simply, while blockchain won’t put accountants out of business, it will reduce the number of hours needed from them and it will change some of their core functions.
A report from Deloitte argued that blockchain ledgers are likely help with transparency and standardization in the accounting field. The future accounting firm will be much smaller and will focus on hiring accountants who understand coding protocols and can build platforms that automate the collecting and reporting of cash flows. Humans will serve primarily as programmers and a command layer over the system, which does all the processing humans used to do.
Most people stop at food supply chains when considering applications for blockchain technology in the agriculture industry, which is short-sighted at best. World agriculture has gone through a number of upheavals over the last century, starting with Fritz Haber’s discoveries in 1918. More recently, global shipping routes and growing economic and political stability worldwide have opened new areas to agricultural trade.
That being said, few systems have successfully been developed that serve everyone in the supply chain. Small growers receive a pittance for what they sell in developing nations, and even the U.S., an agricultural giant, has to subsidize corn farmers to keep them producing. Blockchain may offer solutions for growers that go beyond simple subsidies. A great number of farmers in developing nations may not have access to the same financial tools that those in first world economies have at their disposal. As such, it can be difficult for them to participate in the increasingly global agriculture market.
A compelling option for blockchain innovation in agriculture could be direct and fair trade platforms that reward farmers with micropayments when their products are sold, or appreciated by consumers around the world. A lot of the claims around crypto serving the unbanked seem a bit optimistic for the near term, but in agriculture, food provenance on the blockchain is already underway. It’s not a far car to add to those systems in the hopes of more directly rewarding growers for their efforts.
The art industry hasn’t changed much over the course of history. Artists frequently struggle to connect their art with interested buyers, and most art is purchased by wealthy collectors, galleries, or museums. One study found that 90% of all artwork is sold through centralized auction houses and galleries. In fact, conversations around the business of art frequently call into question whether or not the way the industry functions is contrary to the ideals of the artists fueling it. Blockchain offers a number of compelling solutions that may upend not only the ways we buy and sell art but also how we create it.
One of the most likely to make waves in the near term is blockchain’s suitability for decentralized marketplaces. Prices in the art world are frequently driven up by centralized actors and middlemen who control galleries or other distribution channels. Because people are limited to accessing pieces through these traditional channels, they have little say on the price of a work. The same goes for artists, who frequently sell their work to a gallery with minimal control over the resale price.
Decentralized art marketplaces could completely replace this system. By providing digital showrooms, blockchain based galleries could provide more direct payment options for artists and buyers, and maybe even incorporate things like community funding or demand-driven pricing models.
If you’re a fan of the art world you might have heard about Banksy’s most recent stunt, a work of art that destroyed itself shortly after purchase. Think pieces like this could become more commonplace, as blockchain enables more anonymous collaboration and the possibility for self-funded autonomous works of art. Artists could also create cryptocurrency-driven projects that aim to be self-sustaining by performing tasks like mining or asking for crypto donations. The opportunities to bridge the gap between the physical and digital art realms are increasing and the result won’t just be crypto collectibles like Crypto Kitties. We’ll see more and more artists playing with that thin line between fiction and reality, using blockchain technology to do it.
Dig Deeper: Blockchain in Art: 9 Possible Use Cases
If you don’t think the aviation industry isn’t ripe for disruption, you probably don’t fly enough. It’s not to say that the industry doesn’t already accomplish the impossible every day. The world’s busiest airport, Atlanta, sends out over 100 flights every hour. While the industry has figured out how to coordinate moving millions of passengers every day, there is much that could be done for improving business processes, customer experience/engagement, and security.
When it comes to ticketing, airlines are still stuck between the digital and physical worlds, with printed tickets, and systems that don’t talk to one another. As blockchain innovators work on developing software interoperability on the blockchain, airlines should be pursuing blockchain based ticketing systems that would allow them to completely digitize the process, while giving them better insights on ticket purchases recorded on a distributed ledger. The events industry may serve as a model, as companies like EventChain and Blockparty try to come up with blockchain ticketing platforms that work across venues.
Blockchain could also bring maintenance systems and tracking to even greater highs by creating and immutable and transparent ledger of all maintenance activities. Integrated with the right systems, these solutions could flag any aircraft that haven’t gone through the proper checks and prevent it from flying until they were completed. The same goes for the production process. Blockchain supply chain solutions mentioned in the manufacturing section of this report could help companies and regulatory agencies increase the accuracy of parts tracking and provenance, virtually eliminating the possibility of poorly sourced parts.
In an industry where price points are relatively similar, brand loyalty becomes the lifeblood of an organization. Airlines try to differentiate themselves with competitive rewards programs, but the customer experience of redeeming loyalty rewards doesn’t always endear the brand to them. Airlines could tokenize rewards points, making them more readily usable and infinitely traceable for the airline.
Tokenization may also upend the aircraft leasing market, by providing micro investment opportunities, reducing barriers to shared ownership of luxury aircraft. While services like NetJets are trying to tackle shared ownership or subscription models, turning these models into a traceable and exchangeable digital asset may prove more appealing to potential investors.
Dig deeper: Blockchain for Aviation: 10+ Use Cases
Banking is arguably one of the most centralized and opaque industries, making the legacy financial ecosystem a prime target for blockchain disruption. In the original Bitcoin white paper, Satoshi Nakamoto — the eponymous creator of Bitcoin — labeled the cryptocurrency as a “peer-to-peer electronic cash system,” highlighting the potential blockchain technology holds to transform the current financial ecosystem.
Banks, governments that create and distribute fiat currency, and traditional financial institutions function as “trusted” third parties that provide users with the assurance that transactions, balances, and currency itself are immutable and secure. Blockchain technology, however, provides users with immutability via transparency and security from group consensus, functioning as a truly decentralized alternative to fiat currency that doesn’t require that users trust centralized organizations or third parties.
The “crypto” in cryptocurrency, cryptographic algorithms, ensures that the distributed ledger that keeps track of balances and transactions is immutable. Distributed ledger networks are — in most cases — completely transparent by design. In practice, these networks can promote transparency, information sharing, and accuracy within the financial ecosystem.
Blockchain technology allows users to store value via a method wholly unlike the traditional banking model. Unlike fiat currency, most cryptocurrencies are limited by a fixed total amount of issued tokens, or a slow planned addition of tokens, decreasing the potential for inflation. Cryptocurrency ultimately allows individuals to “become their own bank,” storing cryptographically-secure capital outside of the traditional banking model.
The impact of blockchain technology on the banking paradigm is already apparent. Data released by the World Bank indicates that more than 1.7 billion individuals around the world currently lack access to basic banking or financial services. Further studies conducted by the World Bank demonstrate that blockchain technology holds dramatic potential for promoting financial inclusion to the unbanked and underbanked.
There are already a number of platforms competing to launch the world’s first entirely blockchain-based bank. Binance, one of the largest cryptocurrency exchanges, has backed the creation of the Founders Bank, a Malta-based banking platform that aims to bridge the gap between traditional finance and the blockchain ecosystem.
Another blockchain platform is Bangkok-based OmiseGO, which is specifically designed to deliver banking services to the unbanked. It leverages the Ethereum blockchain to facilitate peer-to-peer transactions, functioning as a decentralized payment processor that makes accessing financial services easier for the unbanked and underbanked.
Traditional banks are highly aware of the potential blockchain technology holds to disrupt the financial industry. Major international banks — such as JPMorgan, Goldman Sachs, and Bank of America — are already heavily invested in the blockchain industry, working closely with platforms such as Ripple to minimize costs by implementing distributed ledger technology.
The Cannabis industry may be new on a legal front, but it’s existed for years. With legalization extending into new states seemingly every election cycle, the industry is having to scale rapidly while engaging with the complexities of navigating contrasting state and federal laws. Blockchain could help the industry prove that it’s ready to go mainstream and speed the development of more open regulation as a result.
One major issue facing the Cannabis industry is provenance. Being able to track product and verify that it came from legal growers, and healthy sources is vital in building consumer trust and assuaging the concerns of regulators like the FDA. Blockchain-based supply chain platforms could help sellers deliver a quality product while building trust with customers who are new to cannabis or who have concerns about sourcing.
The industry may also benefit from cryptocurrencies built to provide them with a method of exchange and value-store that doesn’t involve the traditional financial system. As federal regulation lags behind state innovation, companies need a way to secure their revenue which comes primarily in the form of cash. Zero knowledge cryptocurrencies that are easy to use could increase the stability of the fledgling industry by providing a safe way to store funds and move them out of cash dependency.
While government support of cannabis is, at best, tenuous, blockchain could provide incentives for governments to embrace it faster. Blockchain-based platforms could help make cannabis data more transparent, which would be ideal for law enforcement agencies. Additionally, it could provide streamlined taxation processes, making sure that the new industry is adhering to tax policy.
Dig Deeper: Blockchain in Cannabis: 7 Practical Use Cases
8. Cloud Computing
Scientific communities, academics, developers, and large-scale industries all demand an ever-increasing amount of raw computational power to process huge volumes of data. Forbes predicts a dramatic increase in the size of the cloud computing industry over the next two years, anticipating a total industry value of over $162 billion by 2020.
Cloud-based big data applications, analytics, and computationally intensive enterprises all benefit from the rapid delivery and scalable usage offered by cloud computing. But the centralization of the industry — led by Microsoft, Amazon, and IBM — increases costs and presents a centralized point of failure.
Unlike traditional cloud computing platforms, blockchain-based cloud computing services don’t rely on centralized data farms, but instead, aim to leverage the vast amount of idle computational power spread across hundreds of millions of computers around the world.
For example, studios and creative agencies often struggle to access sufficient rendering capacity in order to keep up with the increasing demand for 3D animated and video content. Leonardo Render, a blockchain-based rendering platform, aims to provide high-performance computational power borrowed from GPU farms around the world. While Leonardo Render doesn’t draw computational power directly from network participants, it does allow creative agencies to engage data farms directly without centralized middlemen.
Israeli blockchain startup Golem takes a different approach. Instead of accessing data farm infrastructure, Golem is focused on creating the world’s first decentralized supercomputer by harnessing the idle power of users, data centers, and any other unused computer infrastructure around the world.
The Conduit platform operates in a similar manner to Golem but takes an approach geared specifically toward enterprise organizations in the supply chain, biopharmaceutical, and finance industries. In addition to real-world use cases, Conduit argues that the decentralized computational infrastructure it offers could be highly beneficial to the cryptocurrency mining industry, which currently consumes more computational power — and electricity — than the entire country of Austria.
9. Cloud Storage
Like cloud computation, cloud storage is a growing industry that struggles to meet demand. And it is anticipated to grow to $88 billion in size by 2022. The increasing popularity of cloud storage solutions has caused many organizations to eliminate in-house servers and their attendant costs in favor of cost-effective cloud storage solutions delivered by data giants such as Amazon or Microsoft Azure.
Data analytics firm Gartner predicts a “cloud shift” as businesses move to cloud storage models, which will see the migration of more than $1 trillion in IT spending by 2020. While more cost-effective and arguably more secure than in-house storage, cloud storage solutions still present a single point of failure and suffer from data breaches that often see millions of users affected in major leaks.
However, the distribution of cloud storage resources via blockchain technology provides a solution to this issue. Blockchain-based storage marketplaces are already live today and focus on making disk space a commodity. By breaking up user data into individual encrypted chunks, storage marketplaces spread data across a distributed network so no one server, location, or individual is trusted with the entirety of customer data.
Blockchain platforms such as Storj, Sia, and Filecoin all operate as decentralized storage markets, offering more efficient, more secure storage at a lower price than traditional centralized storage platforms. There are a number of blockchain projects that aim to take cloud storage to the next level, all focusing on storing user data on-chain.
Arweave, for example, uses a novel “Proof of Access” protocol that promises permanent, low cost, censorship-free data storage. Storing data on-chain in this manner means that it’s stored permanently for as long as the blockchain network is active, as illustrated by Peking University students in China, who circumvented censorship of a university cover-up by publishing data on the Ethereum blockchain.
10. Commodity Trading
Cryptocurrencies such as Bitcoin are backed by a number of intangible but nonetheless concrete value motivators, such as the energy expended in their creation, enforced scarcity, or market demand. A new asset class is developing, however, that functions as a cryptocurrency but is backed on a 1:1 basis by a real-world commodity.
The simplest example of cryptocurrencies backed by tangible real-world assets are stablecoins, such as Tether, which are backed on a 1:1 basis by secured USD. But a future in which commodities of all sorts, such as precious metals, crude oil, or even bananas, can be represented and traded on the blockchain is not so far away.
The commodity trading industry essentially involves the shipping of goods and commodities between geographic locations and exploiting the commodity price difference between them — called arbitrage — to generate profit. Commodity traders face a variety of risks that include price, margin, volume, operational, liquidity, and contract performance.
The entire commodity trading industry relies on payment relevant documents such as the bill of lading and banking instruments such as documentary collection, as well as banks that provide trade finance. This ecosystem is relatively secure but extremely slow moving. International shipping timeframes are exacerbated by slow document transfer speeds, which often present a liquidity risk, as cargo is payable within 30 days as an industry standard.
CargoX has developed a blockchain-based bill of lading solution that dramatically accelerates the document resolution process within the commodity trading industry, eliminating liquidity risk. Independent commodity trading and logistics house Trafigura introduced the first-ever blockchain solution for the U.S. crude oil market in March 2017. Blockchain technology is quietly becoming an integral element of the commodity trading industry — Singapore-based company Arkratos launched the first blockchain commodity trading platform in May 2015.
Compliance is one of those enterprise necessities that few companies are excited to budget for, but that could destroy your business if ignored. And most entrepreneurs, investors, and executives know that compliance departments are stuck with expensive legacy software, either by contract or to avoid having to go through the pain of migrating to a newer, more agile system. That being said, the benefit of a strong compliance culture is obvious. The Association of Certified Fraud Examiners found that companies who proactively monitor their compliance programs experience a 54% reduction in compliance-driven losses. Despite that, most companies still skimp on compliance budgets. One study by Deloitte found that 59% of respondents had total compliance budgets, covering people, process, and technology, of $5 million or less.
Blockchain will revolutionize the compliance technology sector in a number of ways. The first way it will make a splash is by bringing an interoperability layer to compliance software and data that has been previously lacking in the industry. Deloitte also discovered that 30% of compliance professionals have no methods for assessing or tracking the success of their compliance programs. Compliance data usually sits in silos whether they be digital or paper, and is difficult to cross-reference. Blockchain could help by creating shared data protocols, and secure, immutable data sets that can be easily read by any relevant program or auditor.
Compliance platforms built on the blockchain will also raise the bar for trust in the industry. Lawsuits for compliance violations are a frequent occurrence and can cost companies millions in both penalties and damages. Smart contract solutions can ensure that various processes or deals can’t be completed until all terms or regulations have been addressed. This means organizations can prevent violations before they occur, and quickly identify the source of any problems in their process. Additionally, by automating compliance processes, and making them more transparent, companies can more readily show that their business practices are above board, without any questions about the integrity of their data. Whether it’s environmental, ADA, employment compliance, or otherwise, blockchain solutions could help companies maintain a stricter adherence to regulation without breaking the bank.
Dig Deeper: Blockchain in Compliance: 6 Practical Use Cases
12. Corporate Governance
The benefits of blockchain technology can be applied to the governance of corporations in the same way it can be applied to the governance of the state. Corporate governance concerns the balance of power in organizations between shareholders, management, auditors, and financiers. In the current corporate governance paradigm, it suffers from opaque voting procedures and legal insider trading.
The widespread adoption of distributed ledger technology in the world of corporate governance could see shareholder voting brought onto the blockchain in a similar manner to public sector voting, or involve the tokenization of equities in order to deliver real-time insight into corporate share transfers.
A 2015 report published by the U.S. National Bureau of Economic Research highlights the enhanced transparency of managerial ownership delivered by blockchain technology, noting that the immutability of the blockchain would completely eliminate corporate fraud, such as the backdating of stock compensation.
The registration of equities and securities on the blockchain would lead to faster and cheaper trade execution and, most importantly, make it virtually impossible for stock managers to manipulate the outcome of corporate decision-making through voting.
Blockchain-based corporate governance would also heavily impact the corporate auditing industry, which functions as another centralized third-party susceptible to manipulation and corruption. By making the corporate voting process more trustworthy and transparent, blockchain technology will, according to the U.S. National Bureau of Economic Research report, promote increased shareholder voter participation.
In May 2018, the U.S. patent office granted U.S.-based financial services company Broadridge Financial Solutions U.S. Patent No. 9,967,238, allowing the platform to integrate blockchain technology into its existing corporate proxy voting service. The blockchain-based governance platform will allow shareholders to cast votes and read notifications via any smartphone.
13. Credit Management
The credit industry is highly centralized, relying on the heavily regulated actions of monolithic credit management agencies, such as Equifax, Experian, and TransUnion and the FICO scores they provide. More than 90% of U.S.-based lending institutions use FICO scores when determining loan eligibility.
The sensitive nature of credit information has led to the stratification, compartmentalization, and regulation of the credit industry. Lenders, focused on the minimization of risk when assessing loan eligibility, rely on the credit score delivered by these third-party institutions as an immutable source of secure data.
Credit agency data management, however, suffers from the same major flaw as any centralized organization — centralized security management. Equifax suffered a major data breach in 2017 that was described by U.S. Senator Richard Blumenthal as “a historic data disaster,” affecting over 143 million people. The Equifax breach was preceded by the 2015 Experian data breach, which exposed the private credit data of 123 million U.S. households.
Blockchain technology is able to dramatically reduce the threat of security breaches and attacks that target siloed credit but also presents the opportunity to minimize the costs associated with data verification during the loan eligibility assessment process. Promoting interoperability by storing standardized credit data on-chain will minimize the fees paid by banks to access credit data, ultimately lowering the cost of retail finance for the end user.
Lumenous is one of the first blockchain-based platforms to bring credit data onto a distributed ledger network, using a collaborative tagging and analytics system that allows users to create and selectively share credit data with creditors, partners, and customers.
The Polish Credit Office, which operates as the largest credit bureau in Central and Eastern Europe, integrated blockchain technology into data storage protocols in May 2018, creating a blockchain-based financial database that meets the stringent requirements of EU General Data Protection Regulation.
Blockchain technology applied to the crowdfunding industry is largely used to fuel the initial coin offering ecosystem, but the features of distributed ledger technology that make it ideal for decentralized startup capital also make it ideal for decentralized crowdfunding outside of the blockchain industry.
Crowdfunding platforms such as Kickstarter and Indiegogo have transformed the startup capital generation process for startups. Innovative concepts that don’t possess mainstream business appeal or fail to capture the attention of large-scale venture capital firms are able to directly engage potential consumers in order to seek funding.
“Traditional” crowdfunding platforms function as trusted intermediaries that hold investor capital in escrow, preventing supporters from fraud. If a crowdfunding campaign succeeds, the startup is provided with generated capital; if a campaign fails, investors are provided with a refund. This model is not without flaws, however. Centralized crowdfunding platforms charge high fees — up to 5%, with an additional 3-5% reserved for payment processing.
Blockchain crowdfunding models such as initial coin offerings allow startups to generate tokens and sell them on the promise of future value. But if a startup’s planned concept does not integrate distributed ledger technology, tokenization merely represents the creation of unregulated securities with no oversight should exit scams occur — and they frequently do.
Ethereum-based blockchain startup Acorn Collective aims to provide creative startups that operate outside of the blockchain industry with a blockchain-based crowdfunding alternative to the ICO model. By integrating peer-to-peer smart contract-based governance, the Acorn Collective platform is positioned to render the traditional crowdfunding model obsolete while protecting the interests of investors and eliminating fraud.
Acorn Collective delivers full transaction transparency, increasing investor trust, and leverages smart contracts to ensure that projects are not funded unless capital generation goals are met. Other notable examples of blockchain crowdfunding include the 2018 film “BRAID,” funded via a $1.7 million crowdsale executed via the decentralized fundraising platform WeiFund.
15. Cyber Security
The current digital landscape is a soft target for hackers and malicious parties who seek to exploit security flaws in order to commit fraud or theft. The inherently secure nature of blockchain technology is not only ideal for ensuring the integrity of the financial industry but can also be used as a means to secure network communication.
The authenticity of data is one of the most important elements of digital security — data can always be modified and changed retroactively. Blockchain technology makes it possible to sign data with a digital signature, called a hash, that can be stored on either a public or private distributed ledger. This hash makes it functionally impossible to alter the data, as the network would instantly reject information that has been tampered with.
The Guardtime platform is currently implementing blockchain technology into the security industry, using a blockchain-based digital signature system to ensure the real-time integrity of data systems at a large scale.
However, the benefits of blockchain technology to the security industry aren’t limited to the direct integration of cryptographic methods into technological architecture. Buglab is an Ethereum-based project that aims to create a peer-to-peer marketplace that allows companies to connect directly with cybersecurity researchers and penetration testers. The marketplace removes middleman fees and rewards freelance white hat hackers for identifying flaws in existing systems.
Blockchain technology makes it possible for businesses to authenticate users without passwords. Large-scale organizations are able to issue any given device with a cryptographically secure certificate instead of a password, with the blockchain ensuring that attackers are unable to issue false certificates. Xage Security aims to use this concept to create a security architecture for Internet of Things devices, making industrial control systems tamperproof.
16. Digital Advertising
The digital advertising industry, as it exists today, is highly inefficient, centralized, and prone to fraud. The global digital advertising industry is currently worth more than $223 billion, but a significant portion of that value is wasted. Data published by Juniper Research demonstrates that more than $51 million is wasted on advertising fraud every day.
Digital advertisers place value on impressions — or the amount of times any individual ad is served to a consumer. Fraudsters present within the digital marketing industry commonly use fake traffic generation or bots to simulate real impressions, accounting for almost half of all impressions generated.
In addition to fraud, the digital advertising industry is saturated with middlemen that elevate the cost of advertisement deployment. Blockchain technology promises to lower advertising costs by connecting brands directly to ad publishers without middlemen and also holds strong potential to completely eliminate advertising fraud.
The transparent nature of distributed ledgers makes it possible to create an immutable audit trail that allows brands to track any advertisement from deployment to the consumer, ensuring that all impressions are authentic and valid. In addition to lowering costs and eliminating artificial impressions, blockchain technology also forces advertising agencies to improve their value proposition under increased scrutiny.
The Basic Attention Token is the cornerstone of the Brave project and functions as a cryptographically secured representation of user attention. The Brave browser allows users to earn Basic Attention Tokens by simply being exposed to and engaged by advertisements while browsing the internet, allowing advertisers to directly purchase user attention, instead of the potential of capturing it.
The MetaX project operates in a similar manner, operating on the adChain blockchain. Advertisers using MetaX are able to purchase individual impressions that are encoded onto the blockchain, then shared with all chain participants. This process allows advertisers to verify how many times an advertisement is seen, where it is published, and exactly how much capital is spent on the advertising process.
17. Digital Rights Management
Digital rights management is a critical element of the media industry, assisting content developers in the ongoing war against piracy. While large-scale content distributors may be able to deliver intellectual property or digital content to consumers at a near-instantaneous speed, the software that drives digital content delivery is far from efficient.
The digital rights and royalties industry consists of a vast number of media vendors and publishing houses, all of which individually manage tens of thousands of unique pieces of content. The global nature of content distribution creates a market environment that spans multiple payment agreement regulations and taxation systems, which can cause a dramatic increase in transaction costs to both distributors and publisher.
Blockchain technology presents the opportunity for a distributed ledger platform that facilitates the creation of business agreements between digital rights management industry participants on a peer-to-peer basis, with smart contracts handling remittance, licensing, and content ownership.
Microsoft is currently working with multinational financial services platform Ernst and Young to establish a distributed ledger network that reduces operational costs and manual reconciliation. Blockchain technology has captured the attention of major content distributors around the world — media giant Sony filed a patent in 2016 designed to assign ownership of digital content via a distributed ledger network.
IBM is also working to combat digital piracy by leveraging blockchain technology, which currently costs media distributors in the U.S. more than $20 billion annually. IBM’s scalable blockchain-based DRM model will instantaneously issue consumers with access rights to media recorded on a distributed ledger.
Munich-based Bernstein Technologies GmbH offers blockchain-based intellectual property management, allowing designs, inventions, and proofs of use to be immutably recorded on a distributed ledger. Other blockchain-based DRM and intellectual property management platforms include Proof of Existence, Proofstack, and Blocknotary.
When you read about eCommerce it’s usually an article spelling the doom of retail as we know it, or predicting how many trillions of dollars eCommerce will create in revenue by 2020. While eCommerce certainly has upended retail and redefined how we purchase goods and services, the more dire predictions for the industry haven’t held muster. Instead, measured predictions that eCommerce would overtake retail incumbents and small businesses that can’t keep up, seem to be the ones that came true. So what about eCommerce v.s. Blockchain? Will the revolutionary technology replace eCommerce as we know it? You guessed it, yes, and no.
Blockchain will certainly disrupt the way retailers and eCommerce giants manage payments and monetize their services. Take Amazon and Alibaba, both have built their empires on facilitating exchange between parties, both on the transactional and logistics layer. Consider, however, that the transactional layer could be completely decentralized, and replaced with an egalitarian payment revolution powered by the blockchain. Suddenly the companies would have countless peer to peer platforms competing with lower transaction fees for sellers, and reduced concern around data tracking from consumers.
There are a number of blockchain-based eCommerce projects live already, as well as a growing roster of eCommerce platforms that are beginning to allow retailers to accept cryptocurrency as a payment method. eCommerce giant Shopify now allows retailers to accept payments in cryptocurrencies via a range of payment processors, which include Coinbase Commerce, BitPay, GoCoin, and CoinPayments Beta.
Coinbase — one of the largest cryptocurrency trading platforms online — has also released a dedicated plugin for WooCommerce, which is currently used to operate almost 20% of all online retailers. Traditional retailers, such as Walmart, are also working closely with the IBM blockchain innovation arm to develop blockchain-based payment solutions in order to keep up with the rapid growth of blockchain-based peer-to-peer eCommerce platforms.
The future of online commerce, however, is on the blockchain. Syscoin, developed by Blockchain Foundry, is one of the first decentralized marketplaces to go live in the blockchain ecosystem and boasts an entire business ecosystem designed to allow for the rapid deployment and operation of peer-to-peer eCommerce platforms. Launched in 2017, the Syscoin platform allows retailers to create online marketplaces and accept payment in over 30 cryptocurrencies — and has already made it possible for cryptocurrency holders to purchase high-end items, such as luxury vehicles, via the platform.
Additionally, decentralized eCommerce platforms can increase platform transparency, something that would be a threat to organizations like Amazon that have frequently dropped sellers or customers with minimal explanation. eCommerce companies would be wise to try to leverage blockchain’s promise of transparency to maintain a positive brand image. Additionally, blockchain could help reduce fraud for both sellers and buyers. eCommerce scams abound, reducing trust in selling on platforms like eBay and making them more stressful than they need to be. Since cryptocurrency transactions are irreversible and remove the possibility of falsified transactions, online payments become more trustworthy and secure, increasing confidence in peer to peer exchange of products.
Most online consumers have significant concerns regarding how their data is shared with third parties. Blockchain could help increase not only the security of their personal data, but it can also drive new standards in transparency. eCommerce companies could significantly improve brand affinity if they are more transparent about how they use their customer’s data, and blockchain could provide the tools they need. For those that are doing things with data that consumers might not appreciate, blockchain represents a challenge and may upset their existing business models.
Statistical data indicates that income increases in accordance with the amount of education an individual has completed, with strong correlations linking tertiary education with employability. But as the demand for tertiary education increases, so too does the prevalence of fraudulent diplomas and their availability within the education industry.
UK-based advisory firm Prospect’s Higher Education Degree Datacheck platform identifies degree fraud as a growing problem, citing a rapid rise in fraudulent educational institutions issuing “bogus” degrees. However, blockchain technology promises to eliminate degree fraud by authenticating academic certificates on the blockchain.
Bringing degrees onto the blockchain makes them impossible to copy or hack, creating an immutable audit trail that allows employers to ensure that potential employees hold relevant, valid qualifications. Blockchain-issued diplomas and degrees are already here— San Francisco-based software design school Holberton began issuing blockchain degrees in partnership with document certification startup Bitproof as early as 2015.
In 2017, MIT began offering students the option of receiving academic certificates via a tamper-proof app powered by blockchain technology. And Sony, working in collaboration with IBM, launched a blockchain-based degree certification platform in 2017. Other notable examples of blockchain technology directed at the education industry include Learning Machine and BCDiploma.
Dig Deeper: Blockchain in Education: 3 Practical Use Cases
Blockchain and energy tech are two of the most hyped technology movements in the world. The possibilities for the intersection of blockchain, energy, and sustainable technologies are staggering, and there’s plenty of financial opportunity to back innovation. Energy management is projected to skyrocket to over $70 billion in value by 2022, according to Zion Market Research.
The entire sector is currently driven by rising energy prices and increased regulatory pressure to reduce greenhouse gas emissions toward more efficient innovation. Companies that voluntarily reduce carbon emissions or are mandated by regulatory frameworks are rewarded by carbon credit programs that track “clean” electricity in the form of tradable certificates.
When renewable energy is created, power plants log data in spreadsheets that are delivered to registry providers, who log renewable energy data into disparate systems and create carbon credit certificates. These certificates then pass through a series of intermediary brokers and are verified by additional third parties subsequent to their purchase.
This highly complex and cumbersome process is also extremely inefficient, increasing both transaction costs and the likelihood of errors and fraud. Distributed ledger technology, however, is set to completely eliminate the issues present within the energy management industry by tokenizing clean energy.
IBM is currently collaborating with blockchain startup Veridium Labs to tokenize carbon credits, integrating blockchain technology into the REDD carbon credit framework. But carbon credit generation and distribution isn’t the only application of blockchain technology in the energy industry.
The systems that support the energy grid aren’t the only thing blockchain will improve. Power Ledger, an Australian blockchain platform, is currently working to tokenize power generated through distributed means, such as rooftop solar panels. Traditionally, homeowners who contribute to the energy grid suffer long remittance timeframes. Power Ledger’s blockchain-based energy sharing system will see energy producers paid instantaneously in cryptocurrency, allowing for the peer-to-peer distribution of clean energy. A decentralized, p2p energy grid that maximizes efficiency and reduces waste is an exciting prospect, to say the least.
Dig Deeper: Blockchain in Energy: 7 Possible Use Cases
21. Environment & Sustainability
Financial service firms and tech giants are fervently working toward the implementation of blockchain technology in order to improve efficiency, but not all applications of the blockchain are driven by profit margins. Blockchain technology holds a significant amount of potential to reform the way the sustainable and ecological protection industries operate, compelling corporations to publish ecological impact data in a transparent manner and improving the efficiency of environmental protection efforts.
Corporations typically self-report environmental and sustainability data. If corporate sustainability data is independently verified, it’s often substantiated via narrow certification bodies, such as the Fairtrade Movement or the U.S. Green Building Council, focusing on a narrow slice of corporate environmental, social, and governance policies.
Transparent, tamper-proof blockchain databases are set to transform the sustainability sector from the ground up, beginning with ethical provenance. The composition and provenance of products made by corporations is provided by corporations themselves, which presents malicious actors with the opportunity to misrepresent or obfuscate the manner and location in which they are made.
Blockchain-based supply chain management not only improves the efficiency of the supply chain cycle, but also allows consumers to track any individual item from manufacture to purchase, thereby preventing waste, fraud, inefficiency, and unethical practices.
Provenance is a blockchain platform that allows consumers to identify manufacturers that commit to verifiable positive social and environmental impact. The Provenance platform encodes origin and composition data onto the blockchain, accessible to consumers via a QR code printed on a product that delivers product data via a smartphone app.
Blockchain technology is also being used to incentivize recycling. The Plastic Bank project enables the exchange of plastic for cryptocurrency, allowing individuals that participate in plastic recycling to access a consistent, above-market rate for plastic waste in an effort to empower and encourage recycling initiatives.
The cryptocurrency industry may be intently focused on the benefits of decentralization, but the platforms upon which cryptocurrencies are traded — exchanges — are not. All of the most widely used and trusted cryptocurrency exchanges in existence are operated by centralized organizations, which has led to a series of high-profile hacks, exit scams, and security issues.
Large-scale exchange hacks have rocked the cryptocurrency market since its inception. From the Mt. Gox hack in 2014 to the DAO hack in 2016, centralized organizations and trading platforms within the crypto industry have remained a risky venture for traders who are obligated to trust their capital to a third party.
In addition to presenting hackers with a centralized target of cryptocurrencies, exchanges are highly opaque regarding liquidity management. Accusations of market manipulation are rife within the cryptocurrency ecosystem, with exchanges often charged with complicity in the manipulative actions of malicious parties. University of Texas professor John Griffin published data in early 2018 indicating the presence of manipulation in the cryptocurrency exchange ecosystem, citing a lack of transparency and regulation as a key driver of crypto-fraud.
Decentralized exchanges, however, hold the potential to reform the cryptocurrency exchange industry, allowing traders to interact in a peer-to-peer manner without trusting their cryptocurrency capital to a centralized third party. There are a number of decentralized exchanges in existence already, such as the IDEX platform and EtherDelta, but these platforms retain centralized governance protocols. The 0x project, which aims to function as an open protocol for decentralized asset exchange, is notable for its inclusion of both decentralized trading and decentralized governance functionality.
Blockchain technology offers powerful use cases for both digital rights management and content distribution. The film industry as a whole, however, relies on the creation, distribution, and sale of media, as well as the tracking of rights and the remuneration of creators, actors, and investors.
And with the disruptive wave of streaming services, the industry is still adjusting to new funding and payment models. That change isn’t stopping any time soon either. The media streaming industry is expected to grow 46% by 2023, while traditional media market growth such as television and cinema are expected to stall. While streaming services have disrupted incumbents like networks and film studios, they are still centralized institutions wielding an immense amount of control over content distribution channels.
An Ethereum-based project, Livepeer, aims to democratize the live video content streaming industry, incentivizing the creation and sharing of novel live streaming content with cryptocurrency tokens. And the largest and most successful blockchain-based entertainment platform, Tron, aims to combine both decentralized storage and decentralized digital media distribution to create an entirely decentralized media marketplace.
The Tron project recently acquired BitTorrent — the organization behind µTorrent — and is set to incentivize and legitimize torrent-based file sharing with crypto-based financial rewards. Entitled “Project Atlas,” Tron’s fusion of blockchain and BitTorrent technology is focused on extending the lifespan of torrent swarms and peer-to-peer media distribution while simultaneously lowering the price of content to consumers, minimizing piracy, and providing artists with fair remuneration.
Firearms are responsible for the deaths of over 30,000 individuals annually in the United States alone, with injuries, crime, and negligent discharge accounting for the vast majority. Ensuring that firearms are made unavailable to individuals who would employ them in a negligent or malicious manner is a key tenet of gun control advocacy — a difficult task that blockchain technology could be able to execute efficiently.
Washington State University public health professor Thomas Heston published a study in November 2017 that suggests blockchain infrastructure may function as the ideal medium with which to improve and implement stricter gun control without directly altering current legislation.
Blockchain technology, argues Heston, could be used to create an immutable database that logs the journey of every firearm from manufacture to transfer, sale, and resale. The database would be wholly resistant to hacking and easily accessible both to firearm owners and regulatory bodies.
Heston’s unique application of blockchain technology could potentially limit the availability of firearms to those who may use them in an inappropriate manner. Blockchain technology is already used within the defense industry in tracking key infrastructure and assets, reinforcing the potential of a future in which civilian firearms are tracked on-chain.
The blockchain and gaming industries have maintained a significant demographic overlap since the inception of cryptocurrency. The concept of exchanging fiat currencies for digital currency or assets was already firmly established by multiplayer online games long before Satoshi Nakamoto published the Bitcoin white paper.
Gamers are largely adapted to digital economies, making the gaming industry an attractive environment to blockchain innovators and experimental platforms. One of the earliest integrations of blockchain technology into the gaming industry was the establishment of online marketplaces in which gamers are able to trade in-game assets for both cryptocurrency and fiat currency. Dmarket was the first blockchain-based game asset marketplace but was rapidly followed by Wax.
Other blockchain projects that focus on the gaming industry aim to incorporate cryptocurrencies directly into the in-game experience. Enjin Coin allows developers to create non-fungible blockchain tokens that represent scarce in-game assets, or exchange in-game currencies in the form of tokens for other cryptocurrencies. GamerToken provides gamers with the opportunity to earn tokens by completing quests and achievements within an MMO, then use those tokens to buy and sell unique in-game assets on a blockchain-based marketplace. As blockchain networks become more robust, developers will continue to create new decentralized games, or game DApps.
Blockchain technology can not only be used to capture votes to elect government officials, but also to operate the machine of governance itself. The state functions as a necessary centralized point of coordination in society and works primarily to establish laws and implement them.
The democratic process, however, is burdened by multiple layers of redundancy, slow bureaucratic process, and red tape. Blockchain technology has many applications for the public sector, promising to improve communication, cut wastage, prevent fraud and corruption, and improve the quality of government services.
Blockchain governance academic researcher Dr. Marcella Atzori outlines the practicality and benefit of blockchain in governance in a 2015 study entitled “Blockchain Technology and Decentralized Governance: Is the State Still Necessary?” In her study, Dr. Atzori advises that the atomization of governance via the blockchain could see all government legal documents, such as contracts, identification cards, passports, and land deeds managed in a cheaper, more efficient, and decentralized way.
The advent of blockchain governance, argues Dr. Atzori, would make it possible for anybody to create their own blockchain nation and a decentralized “do-it-yourself” governance system. The concept of blockchain governance is still in its earliest stages, but that hasn’t stopped far-reaching projects from laying the groundwork to create the blockchain nations of the future.
The Bitnation project is an example of this, which intends to create a decentralized, borderless state-equivalent, issuing blockchain marriages, birth certificates, refugee emergency IDs, and launching a blockchain-based notary. Real-world states are beginning to investigate the potential benefits of blockchain governance as well — In July 2018, the Spanish ruling party proposed that blockchain technology be incorporated into Spain’s governance structure at virtually every level.
Dig Deeper: Blockchain in Government: 9 Possible Use Cases
Data interoperability is the biggest issue that faces the healthcare industry. Data released by Black Book Research demonstrates that 36% of healthcare professionals struggle with exchanging patient healthcare records between healthcare providers. The broad spectrum of electronic healthcare record providers and platforms and the disparity between the data standards used makes it impossible for meaningful patient data to be shared outside of siloed medical data platforms.
The U.S. Office of the National Coordinator for Health Information Technology’s interoperability roadmap identifies a number of elements that are critical for healthcare interoperability. This includes the establishment of a ubiquitous, secure network infrastructure, verifiable participant identity and authentication, and consistent representation of data access authorization — all of which are delivered seamlessly by blockchain technology.
Deloitte identifies blockchain technology as a key driver of trustless collaboration and reduced complexity in the healthcare sector, recommending the establishment of a blockchain framework to promote dialogue and discovery within the industry. But there are already several blockchain startups targeting the healthcare sector.
Docademic aims not only to promote interoperability within the healthcare industry by leveraging blockchain technology but is focused on establishing a free healthcare economy in which patients are able to dramatically reduce the cost of healthcare services by sharing their health data with providers.
The Hyperledger project, a collaborative blockchain development program executed by members that include Accenture, Airbus, American Express, and Deutsche Bank, is currently developing a healthcare-oriented open source blockchain platform. Other blockchain startups focusing on the healthcare industry include Medicalchain, Medibloc, and Patientory.
Dig Deeper: Blockchain in Healthcare: 5 Possible Use Cases
28. Human Resources
While the blockchain is most closely associated with cryptocurrency, the underlying technology that drives it is about to revolutionize the way in which businesses operate. The decentralized hardware network that powers the blockchain automates and secures the flow of transparent information while eliminating third parties and middlemen, which holds the potential to completely disrupt human resources management.
Blockchain technology is highly relevant to the human resources industry, as it empowers individuals with the ability to own their own personal data, allowing employees to maintain absolute control over their entire professional and academic identity. The wholesale adoption of blockchain technology within the human resources sector is poised to render resumes, references and career networking sites such as LinkedIn redundant.
Xref is currently exploring the use of blockchain technology to automate the process of vetting employment candidate references — a concept that blockchain startup CVerification is already making a reality. CVerification aims to make references, academic achievements, and employment history available via the blockchain, eliminating resume fraud and allowing employers to make safe recruitment decisions.
In addition to improving the employee screening and employment process, independently verifiable blockchain-based employment history is also positioned to render LinkedIn obsolete. Blockchain technology also turns the traditional employment model upside down, with platforms such as ChronoBank promising employees the ability to swap their time directly for crypto tokens via a completely decentralized hiring platform.
Established organizations within the human resources industry are also integrating blockchain technology. Background screening firm InfoMart has engaged a small army of blockchain experts in order to develop new products that are expected to hit beta testing in 2019. Other notable blockchain platforms operating within the human resources industry include Caerus Connections and Vertalo.
Both individuals and organizations are often not in control of the key data points that make up their identity. Sensitive personal information is commonly held by monolithic organizations on centralized databases, which are a prime target for hackers. User or customer data is also often shared with nebulous third parties, such as in the 2018 Facebook-Cambridge Analytica scandal that saw 87 million users affected by improper data sharing practices.
Blockchain-based identity solutions promise to provide individuals with self-sovereign identity management that allows users to control what data is shared with who, and when, in a decentralized manner.
Government-issued identity solutions are less susceptible to hacking attacks and data leaks but suffer from the same bureaucratic inertia as state governance. Bringing identification onto the blockchain, however, would allow users to store identity information on a cryptographically secure, highly efficient platform with complete control over access to their data.
The potential of blockchain-powered ID has sparked the development of a plethora of solutions, notably the ERC725 identity standard. The ERC725 standard is the brainchild of Fabian Vogelsteller, creator of the ERC20 token standard that catalyzed the creation of initial coin offerings. It functions as a protocol that allows for the standardization and interoperability of identity data on the blockchain.
Blockchain-based identity is integral to the future of DApps, or decentralized applications. DApps are decentralized equivalents to the centralized apps in use today, such as Airbnb and Uber. A decentralized Airbnb, however, still requires that users identify themselves in order to prevent fraud and other criminal activity. Standardized blockchain-based identity management allows users to identify themselves to one platform or DApp, and then use that verification across any other interoperable DApp that accepts the same standards.
IBM is already experimenting with blockchain-based identity solutions with the IBM Blockchain Trusted Identity project, creating a corporate-backed ERC721 equivalent. And blockchain startup Civic is currently working on a secure distributed ledger-based identity management platform that allows users to reuse Know Your Customer data across platforms and eliminate ID theft.
30. Inheritance & Wills
Cryptocurrencies allow users to effectively become their own bank, but the manner in which cryptocurrencies are stored — typically in ultra-secure cold wallets that aren't accessible to anybody but their owners — presents a difficult problem when the issue of inheritance arises.
While it’s possible for cryptocurrency holders to ensure that the private key to their cryptocurrency holdings is made accessible to inheritors, it’s possible that executors and heirs may fail to realize a private key for what it is, potentially discarding millions. There are third-party platforms that offer commercial cryptocurrency inheritance services, but the centralized nature of these platforms presents the same risk profile as centralized cryptocurrency exchanges.
Outside of the cryptocurrency industry, traditional asset wills come with their own drawbacks. While electronic wills are now widely available and legally recognized in many states, they must be backed up by a physical paper will — both of which are susceptible to tampering. Asset digitizing, or the legal recognition of cryptographic tokens that represent ownership of real-world assets, holds the potential to bring wills and inheritance onto the blockchain, allowing users to create smart contracts that distribute assets according to a “crypto-will” should specific parameters be met.
There are a number of projects that aim not only to bring wills onto the blockchain but to create “proof of life” systems that automatically trigger crypto-will smart contracts in the provable event of death. Blockchain Technologies Corp. is currently developing an automated crypto-will service that is able to access the U.S. Social Security Office “Death Master File” in order to check for proof of life.
Other blockchain inheritance projects integrate wearable technology, such as the Heir platform. Heir, powered by the Stellar network, offers wearable biometric devices that function as a proof of life engine, complete with the distribution of assets in the event of death.
The multi-trillion dollar global insurance industry currently faces a wide variety of challenges, such as fraud and data interoperability. Although the insurance industry is one of the largest, it’s also one of the most antiquated — despite the ubiquity of insurance, insurance policies themselves are often processed via paper contracts, relying on human supervision to eliminate error and fraud.
The insurance industry is also highly complex, consisting of brokers, insurers, consumers, and reinsurers, making the prediction of the industry’s main product — risk — complicated. Insurance relies on a cumbersome, collaborative process that is fraught with hundreds of points of failure at which critical information can be lost, misinterpreted, or altered — ultimately lengthening settlement times and increasing costs to both consumers and providers.
Blockchain technology promises to solve the issues present in industries that rely heavily on the cooperation of multiple intermediaries driven by different motivators and incentives. Deloitte studies demonstrate a range of key benefits delivered by the blockchain that could dramatically transform the insurance industry. These benefits include the open interoperability of claimant health records, the execution of agreements via smart contracts, more efficient fraud detection, and vastly improved directory accuracy.
Tech giant IBM already offers distributed ledger-based insurance solutions, using the blockchain to automate underwriting with smart contracts, accelerate claims settlement with automated claim and data verification, and minimize fraud with the improved traceability and accountability provided by blockchain technology.
The American Association of Insurance Services has also partnered with IBM to create the openIDL platform, a blockchain-based regulatory reporting system that operates on a permission ledger to facilitate statistical data collection and streamline regulatory compliance.
However, the presence of blockchain technology in the insurance sector isn’t solely driven by enterprise organizations. RiskBlock, developed by a collaborative industry-led consortium, aims to establish an open source foundational architecture that will function as an open framework for the insurance industry to promote blockchain innovation.
Dig Deeper: Blockchain in Insurance: 10 Practical Use Cases
Let’s face it, investing doesn’t look anything like the dramatizations of it we’re all so familiar with in media and pop culture. When it comes to stocks, people running around, yelling, looking like they’ve won the lottery, or gambled their life savings away is only a tiny segment of the enormous amount of trades that occur on a daily basis. These days, everything is digital. And that’s not to say that it’s now humans shouting at computers instead of on the trading floor, a vast majority of the digital trades that occur today are driven by sophisticated trading algorithms and digital systems that automate much of the work that used to require human decision making. It’s become so dependent on the speed of digital transactions in fact, that investment firms fight for real estate with the shortest distance of fiber optic cable between their office and key trading servers.
The rise of digital trading has created a number of new risk factors that investors have to consider. The first being security. Any kind of hack or data breach could quickly reveal intellectual property that could damage a firm’s ability to compete in the market. Similarly, DDoS attacks could interrupt a firm’s ability to do business. According to a report from Neustar, 92% of businesses that fell prey to a DDoS attack experienced an accompanying theft. Blockchain-based platforms could help secure not only internal data but also trading networks. By distributing transactions across a broader network, blockchain could help disincentivize hacks and make disruptions an infrequent occurrence.
Another killer app for blockchain in investing is the use of smart contracts. By automating agreements and enforcement, smart contracts could solve a whole host of issues in investing. One notable example would be smart contract secured venture funding. On a blockchain based platform, a startup could be required to carry out certain steps in a transparent and verifiable way before additional funds are rewarded.
Similarly, firms are starting to consider how smart contracts could be deployed to facilitate automatic trades, though these sorts of applications are still in the drawing board phase of development. Bancor has suggested a relay token as an option for facilitating better trade automation. We should expect to see a number of new blockchain based trading technologies emerge in the coming year, however, as more traditional financial institutions begin the realize the potential for the technology.
33. The Internet of Things
The Internet of Things, or IoT, is decentralized by nature. The IoT ecosystem is loosely defined as the ongoing proliferation of always-online internet-enabled data gathering devices that are becoming more prevalent in daily life. IoT devices are essentially smart machines — anything from smartphones, fitness trackers, and household appliances to industrial machinery or jet engines.
International analytics firm Gartner predicts the existence of over 26 billion interconnected IoT devices by 2020. As a massively distributed system, this network of IoT devices is ideally managed by a decentralized network — blockchain technology. The fundamental design of the blockchain is geared toward applications that involve large amounts of transactions and interactions, such as those present in the IoT ecosystem.
The vast amount of data transferred between IoT devices necessitates the creation of a secure fabric immune to the accidental or intentional release of sensitive user information. IBM is already working toward a large-scale implementation of blockchain technology focused on IoT — the Watson Internet of Things platform allows organizations to create secure, private blockchain ledgers that facilitate the secure transfer of IoT data without centralized control or management.
One of the most interesting applications of blockchain technology in the IoT industry is the IOTA platform. IOTA uses a unique method of obtaining consensus between network participants — called the “Tangle” — that makes all users nodes within the network, simultaneously processing and creating transactions.
The IOTA project envisions a future automated machine economy in which smart IoT devices transact between one another without human intervention. For example, IOTA-enabled IoT electric driverless vehicles may use the IOTA network to access decentralized ridesharing aggregate DApps, pay automated charging stations for energy, or even order replacement parts without input from a human.
Dig Deeper: Blockchain for IoT: 3 Possible Use cases
34. Law enforcement
Public perceptions of law enforcement have been in flux as of late. One Pew study found that over 57% of citizens would prefer that law enforcement halt growth, seeing no need for an increase in the size of the police force. The reasons are numerous and complex, but general themes of critique include a lack of transparency and questions of bias-driven decision making. While some of these issues can’t be solved by technology, there are a good deal of tech solutions that could help law enforcement agencies function more fairly and transparently. These same solutions can help law enforcement leaders engage with challenging aspects of their work, including a lack of resources and information to support decision making.
One major area of challenge for law enforcement agencies is secure data collection and storage. When questions arise surrounding bias in enforcement, most agencies don’t have systems to collect the data needed to evaluate their inner workings and identify any trends or issues. Blockchain is built to solve this problem, as blockchains are really just distributed ledgers of various datasets. By leveraging blockchain systems for data management and storage, agency leaders could begin to collect vital information to help better inform their decisions.
Similarly, blockchain technology can help keep sensitive data secure, while making it more readily accessible for public inquiry. For example, reports bubble up from time to time of arrest and/or detainment records going missing. The result is that family members and legal representatives for the incarcerated frequently can’t connect with them soon after their arrest to help ensure their rights are being protected. A blockchain based ledger for the jail system could be deployed, that would require an individual’s information to be recorded before being admitted into the facility. Such a system would give increased transparency on their whereabouts for all concerned parties.
Similarly, investigation records and reports, though public, frequently get lost or go missing. A prime example with a high human cost came from the Department of Health and Human services, who admittedly lost records of over 1,500 migrant children in their care. Regardless of whether or not the cause came from any kind of ill intent or professional neglect, the outcome is problematic for both the justice system and the individuals involved with it. A blockchain records storage platform could eliminate lost case files, but storing them in an immutable ledger at the moment of their creation.
It is important to note, systems like this will require subsequent policy reforms, along with initial budgets for department transformation, however, the potential benefits for all concerned parties make reform an easy decision for lawmakers. As blockchain use cases within the space become more clear, innovators should work on solutions to help improve the work of law enforcement agencies, while also educating lawmakers on the benefits of their implementation.
As the legal industry races to understand blockchain tech and provide vital advisory services to the burgeoning, yet murky regulatory future of the industry, it is also at risk of being completely upended by the technology.
Corporate law has become an ungainly cost of doing business and organizations spend astronomical amounts on in-house or contracted legal teams. Similar to how automation has made high-skilled manufacturing labor obsolete, blockchain could render legal knowledge-workers lower in demand. That’s not to say that blockchain will completely replace lawyers, rather, it will automate aspects of their work reducing the number of billable hours required by those seeking their services.
For example, the recent development of smart contracts in the Ethereum ecosystem could make contract enforcement more cut and dry than it’s been in the past. Lawyers will still need to draft contracts to keep companies compliant, but once those contracts are created, decentralized systems can take over and manage adherence.
Similarly, verification services traditionally serviced by the legal industry like a notary public, or chain of custody management, will be easily automated on decentralized systems. Identity management projects in the blockchain industry like Civic, are working on ways to verify identity in a trustless decentralized system. If successful, legal authentication of identity or the veracity of documents will become completely unnecessary.
Not all blockchain disruption will be a challenge to the legal industry however, innovative firms will find that blockchain presents a number of opportunities as well. For the foreseeable future, law firms will need to help regulators and blockchain startups work together to develop the legal future of the industry. Firms would do well to invest in blockchain based training for their teams. Those that have served disruptive industries and technologies before will be the most likely to prevail, but new tech means minimal barriers to entry for upstart firms.
Banking is the most obvious industry that is set to be disrupted by blockchain technology, but the development of smart contracts has made the lending of personal and business capital, as well as securities, a prime target of decentralization.
Blockchain-based lending builds on the origins of finance — the peer-to-peer model. Before the advent of banks, credit providers, and loans, individuals loaned capital to one another. The establishment of third-party intermediaries has assisted with the regulation, standardization, and security of lending, but the unique properties of smart contracts and blockchain technology are poised to render these institutions obsolete.
Third-party intermediaries add a layer of trust and protection between borrowers and lenders, but in doing so, add complexity and cost to the lending process. Blockchain technology, in addition to facilitating trustless financial relationships, also makes finance available to anybody, regardless of geographic location.
The highly transparent nature of a distributed ledger makes credit assessment simple, as all inbound and outgoing transactions in any given wallet on a public blockchain can be freely viewed. The true benefit of blockchain-based lending, however, is smart contract-executed collateral management.
For example, a lender can offer a borrower a loan executed via smart contract. The lender sets the terms of the smart contract, and the borrower places collateral in a holding wallet address accessible only to the smart contract itself. Should the terms of the loan be met, the lending contract releases the collateral to the borrower upon repayment. Should the borrower default, the lending contract releases the collateral to the lender.
Global banks are already incorporating blockchain technology into lending infrastructure — ING and Credit Suisse are collaborating via a blockchain-based collateral lending application. SALT Lending focuses on the retail lending market, allowing users to leverage cryptocurrency collateral to access fiat currency loans. Lendingblock leverages blockchain technology to bring securities lending to the cryptocurrency market, expanding the range of complex financial instruments available to cryptocurrency traders.
Any field that depends heavily on data recording and reporting is going to benefit immensely from Distributed Ledger Technologies. The logistics industry is no exception. All of us, whether in personal or professional settings, have had to struggle through the process of finding a shipment that was lost somewhere in the logistics pipeline. Whether it’s the piece of luggage the airline can’t find, the mother’s day card you swore to your mother you put in the mail on time, or that vital shipment of parts holding up your next product line, errors in logistics come at a high cost. Not to mention gaps in security that result in theft. According to Comcast, a staggering three in ten consumers experienced package theft, which represents a significant loss for both logistics and insurance providers.
Blockchain is poised to completely disrupt the way logistics companies manage their data, which is one of the reasons you see so many articles, company announcements, and venture funding flowing to blockchain driven logistics applications.
First and foremost, logistics processes rely heavily on accurate data entry but frequently operate on disparate systems that don’t always talk with one another. A blockchain protocol for data entry and reporting could quickly render this problem a distant memory, creating an interoperability layer that is systems agnostic and near universal.
Logistics companies would also benefit from the immutability of blockchains, as there can be no fudging of the numbers. One Deloitte survey found that 30.8% of respondents had experienced supply chain fraud between 2014-2017. The more digitized a logistics process becomes the less potential points of failure or opportunities for misreporting. For example, a logistics company evaluated based on a “delivered on time metric” would be hard pressed to alter a blockchain based ledger. Similarly, internal logistics departments wouldn’t be able to game company metrics and would have to focus on behaviors that deliver real outcomes.
Additionally, eCommerce companies and major retailers like Amazon and Walmart are changing the nature of shipping and delivery channels. Today you might get an Amazon package from a peer who signed up to deliver it on Amazon’s behalf for a small payment. A token-based platform for delivery could help streamline these new distributed delivery models and therefore incentivize increased participation.
While traditionally the more players involved in the logistics process results in more room for error, blockchain guided logistics processes could continue to involve more third parties with little to no impact on efficiency or accuracy.
38. Loyalty Programs
Loyalty programs, devised to improve customer retention by allowing consumers to accumulate tokens in reward for ongoing brand engagement, are often ineffective. Low client retention, high costs, low redemption rates, and time delays all contribute to the gradual decay of customer loyalty programs, resulting in sluggish global loyalty management market growth.
Deloitte studies argue that a lack of uniformity in loyalty program management causes a lack of consumer interest and activity in loyalty programs. The studies also identify a series of benefits that blockchain technology can deliver to the industry.
Distributed ledger technology, argues Deloitte intelligence, makes it possible for cross-industry loyalty reward system management. For example, a frictionless blockchain-based loyalty program would allow consumers to redeem rewards from a hotel with tokens generated by brand loyalty to an airline. The near real-time nature of blockchain transactions also assists with the elimination of coordination inertia, increasing the likelihood of consumer program participation.
In July 2018, Singapore Airlines launched their KrisPay platform, a blockchain-based customer loyalty program developed in collaboration with KPMG and Microsoft. Using KrisPay, Singapore Airlines customers are able to convert travel miles into payment units, which can then be used with a range of partner merchants.
Japanese e-commerce giant Rakuten has also launched a blockchain-based loyalty program, unveiling the “Rakuten Coin” in February 2018. Rakuten has rolled over $9 billion in value into the blockchain loyalty program and will accept the token as a method of payment on the organization’s global marketplace, travel company, and Viber messaging service. Other blockchain-based loyalty programs include Incent, Loyalcoin, and Loyyal.
Companies in the manufacturing industry have been pioneers of tech innovation, driving trends like automation, digital transformation, and supply chain modernization before they’d gained mainstream recognition.
That’s one of the reasons manufacturing is a hotbed of potential for blockchain disruption. As automated systems increase, companies need interoperability protocols to help all of their systems talking to each other, regardless of whether or not they were implemented at the same time. Similarly, they need a better data tracking system that can catalog every step in their manufacturing process so they can recognize trends and issues faster.
Blockchain could also help manufacturers reduce the number of stops their products make on the way to the consumer. Most manufacturers have to go through countless intermediaries to get their products to the end user, whether they be a consumer, enterprise, government, etc. Blockchain-based eCommerce platforms that involve cryptocurrency as a method for payment could disrupt the status quo and give manufacturers a more reliable direct to consumer channel.
As factories become increasingly automated, we will begin to see more machine to machine interaction. Sooner than you think, this will result in machines that work for different organizations to interact with and potentially transact with one another. As this happens, machines will need protocols for sharing data and making micropayments to one another. In a recent Blockchain Disruption Podcast interview, Rob May, CEO of Talla the company that created BotChain, shared that blockchains could be built to help AI and bots transact with one another and earn money for their tasks.
For manufacturers, the prospect of increased automation is always enticing, but the ability to monetize that automation is irresistible. One thing that has some traditional manufacturers concerned however is the advent of sophisticated 3D-Printing systems that are beginning to disrupt the industry. Since digital blueprints are hard to track, some manufacturers are concerned that they might become irrelevant in a decentralized manufacturing future. Blockchain could help usher them into the developing 3D-Printing economy, however, by assisting with rights management, patent protection, and the verification of source/quality of any given 3D blueprint.
There is also an enormous amount of fraud in the industry that decentralized systems could mitigate. For example, the Association of Certified Fraud Examiners (ACFE) shared in a 2016 report that the median loss for manufacturers from intentional fraud totaled $194,000. Some of the most common schemes include billing fraud, non-cash theft, and corruption. By creating more transparent tracking of goods and services, blockchain could help identify theft of products closer to the source of the theft. It could also eliminate billing scams through the use of smart contracts and irreversible cryptocurrency billing.
Marketing is one of those vital budget line items that is always on the edge of being cut, and always hard to quantify. Regardless of the industry, virtually every company has some kind of marketing spend to help connect their products and services with relevant customers.
The trouble in the digital world is that marketers are constantly having to keep up with new channels, without having the technical expertise to evaluate how effective their marketing efforts really are. Lack of attribution for digital marketing efforts, and constantly shifting platform requirements also make data reporting a major challenge.
Add in the fact that vendors are often incentivized to use less than admirable tactics to boost a limited number of traceable metrics like impressions or clicks, one can never trust how effective their marketing spend is.
Blockchain has the potential to change that, however, as immutable and transparent records of activity could help marketers get a better handle on the results of campaigns, as well as increased attribution and visibility on the customer journey.
Some of the most compelling early use cases for blockchain in marketing are attribution based. Currently, marketing vendors may track a customer’s travel around the web using retargeting and other data collection methods, but that information is often inaccessible to internal teams. Another problem is that recording a customer’s journey through a site may happen for the IT or Marketing teams, but that data often gets siloed, when the entire organization could benefit from reviewing it. Blockchain-based platforms could help not only record the entire customer journey but make it readily accessible for all relevant partners. The resulting data insights could lead to significant discoveries or changes to business operations.
Another way blockchain could help marketers, is by giving them a tool to incentivize user and customer data sharing. Currently, there is a war between marketers and users, with users wanting to hold their data back, and with marketers always wanting more of it. This problem has been accentuated by policy changes like GDPR that make it even more difficult for marketers to collect useful customer data. Because of these regulations some marketers feel like they need a law degree before launching a campaign. This may be why 22% of businesses had yet to make any changes to their processes soon after GDPR rolled out.
Blockchain-based systems could create an incentive model for users sharing their personal data to get rewarded with tokens. In this way, consumers could start monetizing the use of their data, while marketers could encourage increased participation and more open sharing of important demographic and contextual data sets. One app trying to tackle that very issue, Killi, an offshoot of Freckle IoT, is actively building partnerships with marketers and consumers alike to try and drive adoption for blockchain based solutions for data sharing. Find out more about this potential use case for blockchain in marketing by checking out our interview of Killi’s founder on this episode of the Blockchain Disruption podcast.
Dig Deeper: Blockchain in Marketing: 7 Possible Use Cases
Centralized streaming media platforms, such as Spotify and YouTube, are commonly criticized for delivering insufficient remuneration to artists and creators. Notably, Taylor Swift removed her works from Spotify subsequent to a July 2014 Wall Street Journal op-ed in which she criticized streaming music platforms for shrinking the numbers of paid album sales.
Blockchain technology offers a solution to the problem of artist remuneration. Opus Audio, an Ethereum-based blockchain project, focuses on providing artists with a method of distributing their content directly to consumers without the need for intermediaries that lower profits. By distributing content across the IPFS distributed storage system, Opus eliminates the need for centralized third-party hosts, allowing artists to manage their own royalties.
Additionally, record labels have been widely critiqued for producing remarkably unoriginal content and limiting their backing of artists to a small marketable group of mainstream musicians. To their credit, ROI is a major concern when investing heavily in artists. Without a reasonable guarantee of a return, it’s difficult for them to commit time and resources to more niche artists. Since blockchain attribution platforms could help reward smaller artists for even small purchases, we may see a move toward more diverse artist portfolios at record labels.
The annual income of the charity sector amounts to over $410 billion, but not all organizations active within the charity industry are altruistic. Data collected by the UK Fraud Costs Measurement Committee indicates that fraudulent charities capture more than $30 billion annually, accounting for 1.2% of the total fraud in the UK.
But one of the biggest issues present in the charity industry is not charity-based exit scams or wholly fraudulent charitable organizations. The often opaque nature of asset distribution within the charity industry can lead to the diversion or loss of capital, intentionally or otherwise.
Blockchain technology is able to deliver complete transparency in the distribution of assets donated to charity, allowing anybody to track the finances of any given charity and ensure that charitable organizations are held accountable for the fair and honest distribution of capital.
Charity-focused blockchain platforms such as the BitGive Foundation aim to improve operational transparency and efficiency by allowing philanthropists to track the real-time impact of charitable donations. They have worked with major nonprofits such as The Water Project, Save the Children, and Medic Mobile.
Blockchain technology not only offers charities a more efficient and open method of managing capital but also presents new opportunities for donors to provide charities with funds. Data collected by the independent charitable arm of Fidelity Investments demonstrates that Bitcoin donations to charities rose from just $7 million in 2016 to over $70 million in 2017, providing charities with a highly fungible windfall with which to fund philanthropic endeavors.
Outside of direct donations, the blockchain industry also provides charities with new methods of capturing donations from donors. UNICEF launched an initiative in April 2018 that allows supporters to donate processing power in order to mine cryptocurrencies on the nonprofit’s behalf, transforming unused clock cycles directly into support for Rohingya refugee children.
43. Online Betting
The first thing that comes to mind for most people when they hear online betting is an annoying popup ad for video poker or an online gambling site. While these are certainly forebearers of online betting there are quite a few more compelling use cases in the industry. Digital platforms have facilitated sports betting, peer to peer betting pools, social network challenges, and countless other betting models.
Blockchain is poised to disrupt online betting because the industry is in need of more trustworthy applications. Since online betting is frequently subject to fraud, many people are skeptical about participating. One memorable case out of the U.K., the 888 debacle, resulted in over $50 million in penalties, and many players never recovered. A blockchain based betting system could remove the need for trust by providing a layer of transparency for participants. It would also give players visibility on the inner workings of the game, assuring them that nothing about the terms is rigged against them.
The most notable blockchain betting applications are in sports betting and prediction markets, which isn’t surprising considering the global online gambling market is over $37bn. One blockchain based eSports betting company Unikrn, is backed by Mark Cuban. Another interesting use case is prediction markets. Solutions like Augur and Bx.bet are working to provide decentralized markets that allow users to bet on whatever outcomes or futures they see fit. In Augur’s case, this led to an unfortunate series of “assassination markets” but other decentralized betting apps have since put prevention measures in place to avoid any such extremes.
By removing middlemen, blockchain creates a more fair betting market and also reduces the number of fees paid to service providers. Online betting has just begun to experience the new wave of blockchain innovation, if your industry has any betting elements involved, now is the time to jump on building a decentralized solution to help capitalize on the increasing momentum.
If you know anything about blockchain you know that it all started when Satoshi Nakamoto released the Bitcoin white paper in 2008 and when the network first went live in 2009. While there was no use of the term “blockchain” within the white paper there were references to “blocks” and “chains” (Want a cool interview describing this concept further? Check out this episode of the Blockchain Disruption Podcast with Paul Puey). Over time, people started building new versions of Bitcoin, and the term blockchain was eventually coined to describe the family of technologies that Bitcoin gave rise to. With that in mind, since Bitcoin is a digital currency designed to create a more transparent and immutable monetary system, it makes sense that blockchain is well suited to reinvent virtually every kind of payment system.
Whether it’s sending money across borders with lower fees, removing middlemen from peer to peer payments, or eliminating the issue of the double spend, cryptocurrencies are quickly demonstrating that they can completely replace existing payment systems, with nothing more than losing a few lines of powerful code into the world.
The biggest challenge facing cryptocurrency and blockchain based payment systems is the challenge of scaling to meet the increasing demand. This was evidenced in December 2017 when as a report from eToro put it, “costs of deploying even relatively straightforward smart contracts on the Ethereum network rose as high as $48.” As more and more users embrace the idea of abandoning outdated payment systems, the number of users on a network increases. Countless articles have been written on the scaling debate, and it can’t be crammed into a brief description, but the basic challenge is that DLT’s require an enormous amount of computing power and most of the top cryptocurrencies can’t process transactions for the sheer number of payments that occur on a daily basis.
Payment processors, banks, and remittance companies may feel safe because blockchain hasn’t been able to scale yet, but the second these systems resolve the scaling debate and make global transaction volume a possibility, they stand to completely replace the existing payments industry. I’m looking at you Visa, Mastercard, and Western Union.
45. Prediction Markets
Prediction markets are essentially a group of people speculating on the potential for or outcome of events. These events can be virtually anything — commodity prices, quarterly sales results, exchange averages, election results, or even the death of notable individuals. The Iowa Electronic Markets are one of the most well-known prediction markets active today.
Prediction markets have become a powerful prognostic tool due to the crowd wisdom phenomenon, which has led to large-scale organizations such as Google creating internal, private prediction markets. At a fundamental level, prediction markets operate in an identical manner to futures markets. In the world of finance, market participants trade contracts in which payoffs depend on the outcome of future events.
Prediction markets combine an economic incentive that guides participants toward performing intensive, efficient research analysis with the assumption that a large group of people will hold deeper insight into market or event movements as opposed to singular individuals. Prediction markets, however, rely on administration performed by centralized third parties that manage contract trades and bets, increasing costs.
Blockchain-based prediction markets allow participants to enter into smart contracts that automatically execute predictive agreements in a trustless manner, lowering costs and making all market information available to all market participants. Users of centralized prediction markets must trust that third-party administrators don’t withhold market information in order to gain an unfair advantage.
Ultimately, blockchain-based prediction markets are transparent, more accessible, and probably fair. Augur is currently the most successful blockchain-based prediction market, allowing users to participate in political forecasting, event hedging, weather predicting, and company forecasting via an entirely decentralized peer-to-peer marketplace.
Other notable blockchain-based prediction markets include Stox and Gnosis, which use predictive markets in the novel application of price discovery. By leveraging crowd wisdom to establish baseline pricing for auction houses, Gnosis aims to streamline the pre-auction art valuation process.
46. Public Welfare
Social welfare accounts for a large portion of GDP expenditure in states that provide it, but is bogged down by slow-moving bureaucracy and wastage. Government-issued reports on wastage within the welfare sector are sparse, but available data — such as from the U.S. TANF federal assistance program — demonstrates that wastage commonly exceeds 20% due to factors categorized by the U.S. inspector general as either “eligibility and payment calculation errors” or “documentation errors.”
Wastage in the welfare system is caused not by fraud, but by bureaucratic incompetence — a symptom of centralization and opacity, both of which are addressed by blockchain technology. Tracking government-issued welfare payments on the blockchain provides insight into the movement of capital within the welfare system, minimizing wastage and ensuring that assistance is provided to those that need it most, as fast as possible.
Several countries have trialed or are currently trialing blockchain-based welfare systems. The UK government has already conducted extensive pilot programs with DISC Holdings, which provides welfare recipients with payments in the form of cryptocurrency. Their GovCoin project aims to monetize the solution via a network of merchants and the integration of advertisements.
Australia has also announced plans to explore the applications of blockchain technology in the delivery of social security welfare payments. The Australian Digital Transformation Agency, tasked with analyzing the governmental benefits of distributed ledger solutions, has stated that a blockchain-based prototype for welfare payment delivery is expected to be launched by mid-2019.
47. Publishing & Content Creation
The creative industries of content creation and publishing currently face a spectrum of problems, ranging from unauthorized usage, licensing, and rights, to author payments, content provenance, and the centralization of the publishing industry. The long chain between content creators and their audience is impeded by middlemen, licensing bodies, and distributors that cut into author payments.
However, the adaptable, programmable, and transparent nature of blockchain technology is positioned to heavily disrupt the publishing industry in a variety of ways. The most obvious application of blockchain technology in publishing is the circumvention of the traditional publishing model. The ubiquity of the internet now allows unique content to capture attention based on quality alone, which creates the opportunity for decentralized peer-to-peer content marketplaces that reward authors directly.
Po.et aims to do exactly this, working toward the creation of a decentralized protocol that facilitates the establishment of ownership over content as well as content discovery and monetization. Po.et allows authors to generate immutable titles for creative works and register them on a dedicated blockchain, delivering verifiable metadata attribution. In addition to helping authors publish and protect their content, Po.et also allows users to establish their own licensing terms and distribute their work via an open network.
Publica takes a different approach to disrupting the publishing industry and instead aims to provide authors with the capital needed to create new works. The Publica model works in a similar manner to initial coin offerings, presenting readers with the opportunity to fund projects in advance in a manner that supersedes the traditional publishing model of advances.
Artsy takes the adaptable nature of smart contracts and applies them to the publishing industry. Working from the concept that artists should be remunerated in accordance with the quality and popularity of their work, Artsy allows creators to establish variable pricing structures for their published content as demand for their work increases.
48. Real Estate
Virtually any document can be digitized and certified on the blockchain — including titles of ownership and property deeds. Blockchain technology is uniquely suited to the recording, tracking, and transfer of assets in a transparent manner provided that they are digitized first.
The real estate industry is heavily intermediated, consisting of a broad spectrum of counterparties that multiply costs. In addition to the presence of middlemen, the real estate industry is encumbered by both broker fraud and ownership fraud.
However, digitizing the rights to the ownership or lease of property and encoding it to the blockchain could make purchasing, selling, or leasing property as simple as using a smartphone app. The development of smart contracts that interact with digitized property ownership facilitates the autonomous, trustless execution of real estate contracts, escrow, reconciliation, and title transfer completely without the presence of attorneys or title companies.
Blockchain technology is already in use within the commercial real estate industry. Deloitte studies note that blockchain technology presents an ideal solution to the issues present within the commercial real estate sector, which include a lack of data interoperability, a lack of trust between entities, and over-intermediation.
The real estate industry is already home to a trade organization dedicated to the integration of blockchain technology — the International Blockchain Real Estate Organization — which operates industry working groups that aim to create solutions that will tokenize assets, create universal property identifiers, and establish blockchain as a medium for title and conveyance.
And enterprise-ready blockchain-based real platforms are already here. Ubitquity, founded in 2015, allows users to record and track property ownership via a blockchain-based SaaS platform intended to function in parallel with the current legacy property recording and tracking system.
Cryptocurrencies provide consumers with the ability to reduce remittance costs and timeframes in relatively small-scale transactions, but the same technology that allows individuals to instantaneously transact with one another also provides international banks with immense cost-saving opportunities.
The vast volume of capital transferred between international banks has led to the creation of specialized cryptocurrencies designed to do one thing — speed up international interbank remittances and lower costs. Ripple is currently the world’s only enterprise-level solution for global payments and operates on a closed, permissioned blockchain that delivers an instant, on-demand settlement with low operational and liquidity costs.
Ripple is currently in active use by global financial giants, such as American Express, MoneyGram, SEB, BMO, Santander, and Westpac, but it isn’t the only remittance platform taking aim at the finance sector. The Stellar Network can be considered the open source equivalent to Ripple but offers a broad spectrum of use cases.
In addition to facilitating fast, low-cost international remittance, Ripple also allows for micropayments between users, provides automatic currency exchange, and makes it possible for users to become mobile lenders.
The key advantage offered by cryptocurrencies — driven by blockchain technology — is the ability for users to immediately transact in a trustless manner without the need for third-party intermediaries. This advantage delivers obvious benefits to retail, providing retailers with the ability to accept cryptocurrencies in exchange for goods and services and dramatically reduce fiat processing and transaction fees.
For example, merchants that accept credit or debit card payments in exchange for goods and services are required by payment processors to pay a complex series of fees that include verification fees, brand fees, network access fees, transaction integrity fees, and more. These fees absorb up to 4% of the total sale price of goods and services. Credit and debit card transactions also present the risk of chargebacks and reversals. Chargeback fraud currently costs the eCommerce industry over $40 billion annually. Retailers may be able to avoid high credit and debit card transaction fees by transacting in cash, but they still have to pay for cash logistics and the requisite security procedures.
Blockchain technology, however, makes it possible for both retailers and eCommerce operators to not only receive immediate, low-cost remittance for goods and services but execute post-sale supply chain and distribution processes automatically with smart contract technology. By accepting cryptocurrency, merchants can also interact with consumers on a peer-to-peer basis.
Digital advertising is also a major challenge for most brick and mortar retailers. Even though eCommerce hasn’t killed retail as some predicted, the pervasiveness of mobile has given retailers a vital advertising channel to keep up with the online world. The trouble is, digital advertising is wrought with fraud. While we address how blockchain can change this in the advertising section, it’s important to note that blockchain based advertising platforms could also give retailers more trustworthy online to offline attribution, by associating ad views with someone’s digital identity that may also be used for payment in store.
And let’s take a moment to talk about everyone’s least favorite part of brick and mortar retail, coupons. While coupons can be an amazing consistency driver for retailers, they also are a source of fraud, long checkout lines, and unnecessary back office processing. Tokenizing coupons could help resolve all of these issues while preserving the valuable loyalty lever for retailers.
Dig Deeper: Blockchain in Retail: 9 Possible Use Cases
Modern science is based on the principles of experimentation, documentation, comparison, and future experimentation. If you aren’t familiar with the scientific method, please go read about it, but as a quick refresh, scientists come to conclusions by testing a hypothesis and evaluating the results. If you can’t replicate it or test it, it’s mostly going to be theoretical or pseudoscience. So how can blockchain benefit a field of study based on experimentation?
First and foremost, blockchain based data systems could prevent scientific data from ever being lost. At the least, unfinished research that loses funding, or flounders based on a lack of relevant data, could be resurrected at a later date by another scientist finding it on a blockchain based search application. While not an obvious benefit, if you think about the enormous amount of research occurring all the time, it’s frightening to think that whole discoveries could be lost to time if never published on a secure and lasting network. Labs and libraries can still burn down, blockchains cannot.
Another way blockchain technology could accelerate scientific discovery is by democratizing research, and incentivizing community participation. In many cases, more than one researcher might be working on similar studies at any given time. Or research one scientist is conducting might benefit from a different but relevant study from someone on the other side of the world. By recording research progress and findings on a public ledger, researchers could accelerate discoveries if they also had a powerful context based AI search tool.
In highly competitive scientific fields like Pharmaceutical R&D, researchers have every incentive to keep their findings secret. There could be a blockchain based solution that would reward researchers and their parent companies to share portions of their research that might be helpful in other studies. Building a token based reward system could financially offset the risk involved with sharing exclusive research data.
Science is likely one of the least discussed fields when it comes to blockchain disruption, but that shouldn’t be the case. The potential applications to accelerate discovery and innovation are replete, especially when it comes to solving the recent “reproducibility crisis” and investors would be wise to seek out blockchain solutions for both the scientific and pharma industries.
52. Smart Cities
Smart cities went through a pretty big hype cycle about 2 years back, and now you don’t hear about them as often. That’s largely due to the fact that many of the innovation and government based grants are currently underway testing out Smart City concepts and building the first infrastructures required for a more connected civic future. During these troughs of interest, there are lots of opportunities to catalyze public conversations and drive new excitement and venture capital, into the industry. Blockchain could be the spark that’s needed to rekindle innovation within the smart cities revolution. A province in Italy, Tyrol, has proven that blockchain is well suited to streamline smart city applications. Piloting the technology they were able to significantly reduce the number of software programs they use to serve their constituents, as they’d previously been using over 1,000 software applications.
Blockchain technology can provide much of the digital infrastructure that will be required for Smart Cities to become a reality. So while municipalities and tech leaders are working on building exciting IoT hardware, they should also be considering the future of interoperability, automation, and how blockchain can create protocols and security for connected systems.
Since blockchain’s first killer app was currency, smart city innovators should consider deploying digital currency micropayment systems that connected devices could use to compensate one another. Imagine an autonomous vehicle owned by Smart City A, drives through a toll station in Smart City B. Instead of needing a transponder for every different toll system, Smart City A could compensate all tolls with a small cryptocurrency payment. Power Ledger is a prime example of a blockchain solution for smart cities that facilitates new payment models. They’ve partnered with a city in Australia to create a transaction layer for all renewable energy resources. By creating new distribution and payment models blockchain companies are making transparent smart citie a possibility.
53. Sports Management
The sports management industry has traditionally been dominated by large-scale agencies and corporations, with sports teams identifying and nurturing talented sports players in a manner similar to that in which venture capital firms invest in promising startups. However, the democratic architecture of blockchain technology is now providing sports fans with the opportunity to support promising players directly.
The process of funding and supporting athletes is currently being decentralized by a series of platforms that aim to democratize fan interactions with players and provide them with the ability to possess a financial stake in the future of sports teams.
Globatalent is a blockchain-based platform that is focused on enhancing fan interaction with athletes by allowing clubs and players to sell tokenized future revenue to fans via smart contracts. The impact of blockchain technology on the sports management industry isn’t limited to the sponsorship of clubs or players, however. Blockchain platforms are now entering the sports industry as major team sponsors. Blockchain startup CashBet announced a key sponsorship deal with Arsenal FC in January 2018.
Dig Deeper: Blockchain in Sports: 10+ Possible Use Cases
54. Stock Trading
Blockchain technology is beginning to transform the financial sector, expanding beyond the realm of cryptocurrencies into banking, lending, and even capital markets. Stock markets consist of a highly complex system that involves high costs, high risks, complicated procedures, and time-consuming processes. Blockchain technology, applied to the stock market, could offer traders faster exchanges and reconciliation, reduced risk, and greater security.
For example, intermediaries present within the traditional stock market create a market ecosystem in which brokers, regulators, and traders are subjected to a complex process in order to finalize and close a trade, which can take up to three days to complete. The possibility of a wholly tokenized, blockchain-based stock market would eliminate the intermediaries that slow down the process.
In addition to streamlining the operation of stock markets, blockchain technology also holds the potential to greatly reduce the market presence of regulatory bodies. Regulatory intermediaries serve a critical purpose in the stock market, protecting traders from fraud and manipulation. In a smart contract regulated market environment, however, regulatory presence is virtually redundant.
Some of the largest stock exchanges in the world are already implementing blockchain technology. The Shanghai Stock Exchange, which operates as the world’s fourth-largest exchange, announced in July 2018 that distributed ledger technology would be integrated into exchange operations. And in June 2018, stock exchange operator Nasdaq announced the successful trial of a blockchain-based margin call platform designed to transfer collateral to counterparties in securities trades.
55. Supply Chain
The supply chain, which consists of a complex system of relationships between manufacturers, suppliers, retailers, and customers, is an integral element of global commerce. The supply chain network, however, is highly centralized, with third parties managing virtually every step of the supply chain process.
The cumbersome and unwieldy composition of the current supply chain ecosystem transforms essentially simple transactions into lengthy, multi-step procedures that increase costs and limit efficiency. Blockchain technology, however, holds the potential to eliminate middlemen from the supply chain process, improving transparency and interoperability.
Blockchain networks, such as Bitcoin, leverage group consensus to confirm balances and transactions and ensure they are valid. Applied to the supply chain industry, distributed ledger networks not only confirm payment, but also track goods in transport, confirm delivery status, and track warehousing.
One of the most interesting applications of blockchain technology in the supply chain industry is the use of smart contracts. Operating on the blockchain, smart contracts function as programmable contracts that trigger events based on distributed ledger data. In the case of the supply chain, smart contracts can be used, for example, to trigger the delivery of an order once payment is recorded on the blockchain.
Large-scale implementation of blockchain technology within the supply chain industry is already underway. The Commonwealth Bank of Australia recently concluded a successful trial in which goods were shipped entirely on a blockchain-based system from Australia to Germany via five separate supply chain platforms. U.S.-based retail giant Walmart is already using blockchain technology to track the provenance of pork products purchased from China.
There are a number of blockchain startups that aim not only to integrate with the existing supply chain industry but completely transform it. VeChain, a top-20 market cap blockchain platform, focuses on using NFC chips embedded in goods to both track provenance as well as optimize interoperability between supply chain participants. Ambrosus, another blockchain-based supply chain startup, takes this concept a step further by integrating IoT-enabled, blockchain-linked smart sensors into shipments that track provenance as well as status.
Ride-sharing apps, such as Uber, represent the pinnacle of Web 2.0-based decentralization, allowing anybody with a vehicle to participate in the transport economy on a mercenary basis. However, while Uber and Lyft have democratized the ride-sharing process, they are still managed by vertical third-party organizations that are able to dictate terms to users.
Peer-to-peer value transfer is a key axiom of the blockchain revolution. Bringing ride-sharing platforms onto the blockchain completely eliminates the middlemen that elevate prices, allowing individuals to connect directly to drivers who are willing to transport them in a completely decentralized manner.
Organizations such as Uber may appear to be decentralized, but in reality function as aggregators that connect providers with individuals. All of the infrastructure and systems upon which ride-sharing platforms operate are owned and managed by third-party aggregators, allowing them to dictate service agreements and presenting a centralized target for regulatory suppression.
A blockchain-based ride-sharing app would attach metadata such as location and reviews to a user profile published on the blockchain, allowing the blockchain to filter and match platform participants, transport users, and autonomously execute payment via smart contract.
The startup Arcade City has already made the concept of a blockchain-based ride-sharing app a reality and is currently aiming for a late 2018 launch. Arcade City will also make it possible for drivers to set their own rates, manage their own clientele, and even deliver value-added services, such as roadside assistance or delivery.
The La'Zooz project takes the idea of decentralized ride sharing even further — and even more literally — by tracking empty seats in vehicles in real time, tokenizing transportation needs and promoting the more efficient use of existing resources. Other blockchain-based ridesharing platforms include Chasyr, which incorporates a decentralized governance model.
Given the fact that blockchain is inherently well suited for any peer to peer driven industry, travel is rife with potential for blockchain innovation. One of the most disruptive forces in travel as of late has been the home sharing revolution sparked by companies like Airbnb, Couchsurfing.com, and TrustedHousesitters. Airbnb users rely heavily on the centralized platform to both list and stay at properties. While the exchange is peer to peer in nature, there is still a middleman increasing fees and therefore prices, for its users. Decentralized listing platforms could completely change this, however. Much like blockchain concepts for ride sharing and eCommerce, blockchain based home sharing could make home sharing more affordable for all users, and increase the profit margin for listers. BeeToken and WindingTree are early decentralized platforms trying to do just that.
Another major problem in travel is trustworthy reviews and recommendations. While sites like TripAdvisor and Yelp have done wonders for travelers looking for well-rated establishments, they don’t do much to curate hyper-local experiences for people who want to cut through cliche experiences and really dive into the local culture. travel social networking could incentivize local reviewers by rewarding them for their participation and recommendations, regardless of their opinion. This means that no central organization would be filtering recommendations based on their ad partnerships.
There a number of related industries where blockchain solutions will have a net benefit for the travel industry. Take aviation and transportation. More secure booking systems will protect traveler’s data while giving them trustworthy services abroad. If the recent British Airways hack taught us anything, it’s that decentralized data management is a necessary pivot for the industry. Similarly, micro and peer to peer insurance on the blockchain will give travelers more human-centered travel coverage, unlike the complicated insurance add-ons that are common in the industry today.
58. Venture Capital
The blockchain industry has proven to be fertile ground for promising, innovative startups, sparking the launch of thousands of different organizations seeking to leverage the benefits of blockchain technology. A major shift in the cryptocurrency market occurred when blockchain startups realized that the concepts of decentralization that applied to their projects could also be applied to the generation of startup capital itself, catalyzing the beginning of the initial coin offering frenzy.
Initial coin offerings, or ICOs, are a method of seed capital generation that operates outside of the IPO or venture capital paradigm. Rather than offer equity or stock to select venture capital investors, blockchain startups present investors with the opportunity to purchase blockchain-based tokens that are subsequently used on the finished product or platform, once complete.
The conceptualization of the ICO model began with the Mastercoin token sale — currently rebranded as Omni — and became widely popular after the highly successful Ethereum ICO, which raised over 3,700 Bitcoin in just 12 hours upon launch in 2014.
The ICO ecosystem has evolved rapidly and completely without regulation, which has resulted in the loss of hundreds of millions of dollars in investor capital as scammers and fraudsters take advantage of the lack of regulatory oversight. Data released by the Wall Street Journal indicates that up to 20% of all initial coin offerings are fraudulent in nature. This is not to say that cryptocurrency and blockchain technology are prone to scams. Quite the opposite, in fact, the tech itself is built to reduce fraud, but as with any new business model, scammers play on people’s lack of knowledge to make quick gains before disappearing.
Despite the frequency of scams within the ICO market, the initial coin offering model as an alternative to traditional venture capital has already captured more than $10 billion and resulted in the launch of highly successful blockchain platforms, such as Ethereum, NEO, and Storj.
The traditional venture capital industry isn’t ignoring the blockchain industry, either. VCs are now investing in blockchain startups directly, bypassing the ICO stage and purchasing equity in promising companies and concepts via blockchain accelerators and incubators. The Bank of England currently operates a blockchain-focused accelerator project, as does IBM’s Blockchain Accelerator. Other notable VC projects within the blockchain industry include Huobi Labs, Collider X, and the Deutsche Bank Blockchain Business Solution Accelerator.
59. Virtual Reality
Blockchain and VR technologies share a lot in common, especially when it comes to how ready people are to discount their potential. VR skeptics abound. Common critiques of VR’s potential include:
- There are too many hardware providers to choose from.
- The content available is no good.
- 3D Movies never took off, why would VR?
- It’s just too expensive to use.
Anyone familiar with the initial release of video games and their evolution is familiar with these arguments and understands why each of them will be quickly resolved, and how quickly the tech will start to explode in consumer markets.
That being said, VR ubiquity will create new challenges that the industry will need to engage with quickly to avoid any disruptions in the growth of the market. As new gaming experiences launch, people will be looking for ways to make purchases of new games, in-app upgrades, or visual content downloads like VR films.
If the VR industry mirrors the gaming world in this respect, then the future holds a showdown between monolithic organizations fighting for market share, and centralized control. Blockchain can help prevent this reality in a number of ways.
First, through the creation of various tokens or protocols, blockchain could help create a universal or cross-platform system of payment, so VR users can pay with a single currency and wallet, rather than having to maintain separate accounts with every hardware or content provider.
The recent development of scarce digital assets, also known as crypto collectibles’, could be used to enhance VR experiences by creating bespoke, and/or unique experiences to motivate participation and achievement in games. Also, these in-game virtual assets can be purchased with in-game token systems or mainstream cryptocurrencies.
Blockchain could also serve as a decentralized content creation and hosting platform, since VR generally requires a lot of computing power, both in the rendering process and during game-play.
The democratic process relies heavily on secure record keeping in order to ensure votes are valid. In the current voting paradigm, the process of casting, tracking, and counting votes is facilitated by centralized “trusted” third parties, such as the registered voting system manufacturers that assist with the elective process in the United States. However, as history has shown, the current voting paradigm isn’t always reliable.
Blockchain technology offers voters the assurance that their votes are validated and tracked correctly, completely eliminating voter fraud. Transparency is a fundamental feature of blockchain technology. Once data has been written to the blockchain, it can’t be retroactively altered. Blockchain-based voting delivers a completely transparent audit trail that can be independently verified by anybody, ensuring votes are not changed, removed, or artificially added to tallies.
Voting systems that integrate blockchain technology are already in use today. The pro-blockchain Swiss canton of Zug, promoted as “Crypto Valley,” successfully conducted a blockchain-based voting trial in June 2018, allowing participants to vote on a mock issue via the canton’s blockchain electronic ID system.
The U.S. government has also implemented blockchain voting technology. A pilot program recently launched in the state of West Virginia that will give U.S. military troops stationed abroad the ability to vote in the November 2018 midterm elections via a blockchain mobile app. The Australian voting process is set to be transformed by blockchain technology as well, with the Australian Postal Service investigating blockchain-based e-voting systems.
Yet another example is Sierra Leone, which held the world’s first blockchain-based election in March 2018, leveraging Agora’s secure digital voting distributed ledger to capture 70% of all votes. In addition to the already-operable Agora voting platform, Follow My Vote — another blockchain voting platform — has launched an alpha version of a stake-weighted voting platform based on distributed ledger technology.