The blockchain is one of the most promising new technologies for the future.
So what is it?
It’s a distributed ledger technology that underlies cryptocurrencies like Bitcoin, and provides a way to record and transfer data that is transparent, safe, auditable, and resistant to outages. The Blockchain has the ability to make the organizations that use it transparent, democratic, decentralized, efficient, and secure.
The blockchain is likely to disrupt many industries in the coming five to ten years.
These are some of the industries it’s already disrupting:
1. Banking and Payments
Some say that the blockchain will do to banking what the internet did to media. It can be used to give access to financial services to billions of people around the world, including those in third world countries who don’t have access to traditional banking. Technologies like Bitcoin allow anyone to send money across borders almost instantly and with very low fees. Abra is a startup that is working on a bitcoin-based remittance service. Many banks like Barclays are also working on adopting blockchain technology to make their business operations faster, more efficient and secure. Banks are also increasingly investing in blockchain startups and projects. IBM predicts that 15% of banks will be using the blockchain by the end of 2017.
2. Cyber Security
Although the blockchain ledger is public, the data is verified and encrypted using advanced cryptography. This way the data is less prone to being hacked or changed without authorization. It eliminates the need for middlemen, making it more efficient than many legacy systems in cyber security.
3. Supply Chain Management
With blockchain technology, transactions can be documented in a permanent decentralized record, and monitored securely and transparently. This can greatly reduce time delays and human mistakes. It can also be used to monitor costs, labour, and even waste and emissions at every point of the supply chain. This has serious implications for understanding and controlling the real environmental impact of products. The distributed ledger can also be used to verify the authenticity or fair trade status of products by tracking them from their origin. Some blockchain startups working in this sector are Provenance, Fluent, SKUChain, and Blockverify.
The blockchain is set to change the entire approach to research, consulting, analysis and forecasting. Online platforms like Augur are looking to create global decentralized prediction markets. These technologies can be used to place and monitor bets on anything from sports to stocks to elections in a decentralized way.
5. Networking and the Internet of Things
Samsung and IBM are using blockchain technology for a new concept called ADEPT, which will create a decentralized network of IoT devices. Operating like a public ledger for a large number of devices, it would eliminate the need for a central location to handle communications between them. The devices would be able to communicate to each other directly to update software, manage bugs, and monitor energy usage.
The global insurance market is based on trust management. The blockchain is a new way of managing trust and can be used to verify many types of data in insurance contracts, such as the insured person’s identity. So-called oracles can be used to integrate real-world data with blockchain smart contracts. This technology is very useful for any type of insurance that relies on real-world data, for example crop insurance. Aeternity is one blockchain project that is building tools that are useful in the insurance industry.
7. Private Transport and Ride Sharing
The blockchain can be used to create decentralized versions of peer-to-peer ridesharing apps, allowing both car owners and users to arrange terms and conditions in a secure way without third party providers. Startups working in this area include Arcade City and La’Zooz.
The use of built-in e-wallets can allow car owners to automatically pay for parking, highway tolls, and electricity top-ups for their vehicle. UBS, ZF and Innogy are some of the startups developing blockchain based e-wallets.
8. Cloud Storage
Data on a centralized server is inherently vulnerable to hacking, data loss, or human error. Using blockchain technology allows cloud storage to be more secure and robust against attacks. Storj is one example of a cloud storage network using the technology.
Common complaints in the charity space include inefficiency and corruption, which prevent money from reaching those that are meant to have it. Using blockchain technology to track donations can let you be sure your money is going to end up in the right hands. Bitcoin-based charities like the BitGive Foundation use blockchain’s secure and transparent distributed ledger to let donors see that the intended party has received the funds.
Probably one of the most important areas of society that the blockchain will disrupt is voting. The 2016 US election is not the first time certain parties were accused of rigging election results. Blockchain technology can be used for voter registration and identity verification, and electronic vote counting to ensure that only legitimate votes are counted, and no votes are changed or removed. Creating an immutable, publicly-viewable ledger of recorded votes would be a massive step toward making elections more fair and democratic. Democracy Earth and Follow My Vote are two startups aiming to disrupt democracy itself through creating blockchain-based online voting systems for governments.
Government systems are often slow, opaque, and prone to corruption. Implementing blockchain-based systems can significantly reduce bureaucracy and increase security, efficiency, and transparency of government operations. Dubai, for example, is aiming to put all its government documents on the blockchain by 2020.
12. Public Benefits
The public benefits system is another sector that suffers from slowness and bureaucracy. Blockchain technology can help assess, verify, and distribute welfare or unemployment benefits in a much more streamlined and secure way. GovCoin is a UK-based company that is helping the government to distribute public benefits using blockchain technology. The blockchain is also a good contender for implementing a basic income. Circles is a project working on developing a blockchain-based technology for implementing a universal basic income.
Another industry that relies on many legacy systems and is ripe for disruption is healthcare. One of the challenges hospitals face is the lack of a secure platform to store and share data, and they are often victims of hacking because of outdated infrastructure. Blockchain technology can allow hospitals to safely store data like medical records and share it with authorized professionals or patients. This can improve data security and can even help with accuracy and speed of diagnosis. Gem and Tierion are two startups that are working on disrupting the current healthcare data space.
14. Energy Management
Energy management has been a highly centralized industry for a long time. Energy producers and users cannot buy it directly from each other and have to go through the public grid or a trusted private intermediary. TransactiveGrid is a startup using Ethereum that allows customers to buy and sell energy from each other in a peer-to-peer way.
15. Online Music
Several startups are coming up with ways for musicians to get paid directly from their fans, without giving up large percentages of sales to platforms or record companies. Smart contracts can also be used to automatically solve licensing issues, and better catalog songs with their respective creators. Mycelia and Ujo Music are two startups creating blockchain-based solutions in the music industry.
When you shop, your trust of the retail system is tied to the trust of the store or marketplace. Decentralized blockchain-based retail utilities work differently: they connect buyers and sellers without a middleman and associated fees. In these cases, trust comes from smart contract systems, the security of exchanges, and built-in reputation management systems. Two startups disrupting the retail space are OpenBazaar and OB1.
17. Real Estate
Some of the issues in buying and selling real estate are bureaucracy, lack of transparency, fraud, and mistakes in public records. Using blockchain technology can speed up transactions by reducing the need for paper-based record keeping. It can also help with tracking, verifying ownership, ensuring accuracy of documents, and transferring property deeds. Ubitquity, is a blockchain-secured platform for real estate record-keeping that is an alternative for legacy paper based systems.
Crowdfunding has become a popular method of fundraising for new startups and projects in recent years. Crowdfunding platforms exist to create trust between project creators and supporters, but they also charge high fees. In blockchain-based crowdfunding, trust is instead created through smart contracts and online reputation systems, which removes the need for a middle-man. New projects can raise funds by releasing their own tokens that represent value and can later be exchanged for products, services, or cash. Many blockchain startups have now raised millions of dollars through such token sales. Although it’s still early days and the regulatory future or blockchain-based crowdfunding is uncertain, it’s an area that holds a lot of promise.
19. Your Industry
If your industry deals with data or transactions of any kind, it is a field than can likely be disrupted by blockchain technology. The space is wide open and the opportunities are many.