Blockchain has gained traction across all industries, with its applications going beyond just cryptocurrencies and bitcoins. A study conducted by statista.com has forecasted the potential market size of blockchain technology to climb to USD$39.7 billion by the year 2025. Blockchain innovations implemented across the supply chain, finance, entertainment, music, food, retail, healthcare, financial services, and real estate industries, with others following suit, are vital contributors to this market growth. Even the space industry has started showing interest in companies such as SpaceChain researching orbital satellite space applications of blockchain. So, is the sky indeed the limit for blockchain technology?
What is Blockchain?
Blockchain is a decentralized network of blocks that maintain a register of transactional data that duplicate records of all transactions across the network in real time. These blocks are immutable and invulnerable to cyber-attacks as attackers must simultaneously attack every block on the Blockchain to perform a successful hack. Blockchain’s potential multi-industry applications were introduced in 2014 with the Ethereum blockchain 2.0 system launch that introduced smart contracts alongside their distributed ledger technology and immutable records.
Smart contracts make blockchain transactions traceable, transparent, and irreversible. They are coded on the distributed ledger with agreement terms between two parties and are automatically executed when the preset terms are met.
Benefits of Blockchain
Blockchain and its immutable shared ledger technology have multiple benefits across all industries. Some of its key benefits are:
- Transparency: Blockchain transactions and data are duplicated and stored across the distributed ledger in multiple locations. All transactions are immutable and stored with their transactional time and date data eliminating the possibility of fraudulent transactions. Adopters of this technology will benefit from increased organizational transparency as the data is readily available to everyone in the organization without manipulation from a central authority. In business, the immutable ledger can only be accessed by organizational members with permission. Hence, Blockchain is known as a trustless and transparent network.
- Accurate tracking: Blockchain can optimize inventory management to track and keep an eye out for the products’ quality, location, and origin. For instance, a retailer can quickly identify and remove contaminated products from large batches without requiring a complete product recall.
- Permanent Ledger: Blockchain technology is an immutable permanent ledger that cannot be modified or deleted. Its transactional data is forever stored and accessible on the chain. For instance, a product traded via the Blockchain has its ownership details open for public access at any given point. Every time the ownership changes, the Blockchain is updated to reflect the new ownership. Hence, maintaining an effective permanent, immutable ledger on all transactions. This system is substantially more effective than traditional systems that are susceptible to fraud and errors.
- Reduced costs: Blockchain can be used to streamline company costs by removing the need for financial institutions, vendors, and third-party providers, allowing clients and businesses to transact with one another directly. Hence, there are fewer transactional fees when using blockchain technology.
Let’s take a closer look at some of the applications and effects of blockchain on various industries:
Blockchain Technology in Supply Chain
Supply chain data is prone to manipulation because of the lack of transparency and visibility. By integrating Blockchain into the supply chain industry, businesses can store price, time, location, quality, and other product information on the Blockchain to always provide visible, available, and reliable data. This allows for increased organizational supply chain transparency by enabling stakeholders to monitor a product at any point on the supply chain. For instance, a bad batch of products can be easily identified using pre-assigned unique serial numbers and instantly pulled out of circulation, avoiding undesirable outcomes.
Farm to Plate is one such organization that is transforming the food supply chain using blockchain technology. With increased transparency, organizations can access immutable and trusted data to manage food quality and waste. By utilizing QR codes or loT sensors, all supply chain processes are recorded and traceable in real-time. FarmtoPlate uses blockchain technology to record reliable data points such as soil temperature, moisture, weather conditions, and locations right from the origin point of the product. This data can be easily accessed by the organization’s stakeholders and can control quality and reduce recall. This allows for traceability in real-time of the products and the processes with 100% transparency and accountability.
91% of banks had invested in blockchain solutions by 2018, and 66% of financial institutions expect to be in production and running at scale with Blockchain. This could be attributed to Blockchain’s disruptive effect on traditional finance. Blockchain transactions are cheaper and less prone to fraud than conventional financial transactions. In addition to being secure, blockchain-powered financial services have high transactional speeds, irrespective of the distance between transactors. The transaction speeds are often a measure of the efficiency of the Blockchain. The block time, block size, transactional fees, and network traffic affect the transaction speed or efficiency. A 2022 study found blockchains Cosmos, Eos, and Icon are highly efficient and have near-instant transaction speeds.
Blockchain technology allows businesses to set up smart contracts so that transactions, legislation, and certification rules are automatically verified and checked for compliance. This eliminates the necessity for manual checks on a piece-by-piece basis, which is time-exhaustive and can be subject to fraud or errors.
Blockchain technology offers cybersecurity through immutable records, distributed trust, decentralized governance, smart contract automation, and reduced transaction costs.
The Bitcoin ATOM is one such interpolar cryptocurrency that uses on-chain atomic swaps or the provision where two parties can trade tokens from different blockchains. Atom uses hash timelock contract technology (HTCL), a smart contract that locks the transactional exchange between the two parties until a complete two-way verification. In addition to being fast, ATOM is a truly decentralized platform used to exchange digital assets and currency.
Blockchain in Healthcare
The healthcare industry has always been prone to constant data breaches and hacks. The most significant US healthcare system hack was in 2015 when 78.8 million private health records, personal information, and credit card credentials of healthcare provider Anthem Inc. were stolen. Blockchain technology is widely implemented in healthcare as a preventative measure against hacks. MedicalChain is a company where patients safely store their updated private health data on the Blockchain. As a result, patients can securely transfer their confidential medical data instantaneously between healthcare channels or other individuals.
Blockchain in Entertainment
Integrating Blockchain’s digital ledger technology into the entertainment industry has increased trust, efficiency, security, transparency, and access control of media content through all stages of the entertainment supply chain. In recent years, entertainment giants such as Sony, Netflix, and HBO have fallen prey to cyberattacks and data breaches. And now, with the advent of Blockchain, the entertainment industry can safeguard its data by employing sequential hashing, and cryptography, securing transactions, and decentralizing the database structure to make the entire system invulnerable to hacks.
The applications and features described are just a few instances of how blockchain technology has impacted various industries. Rapid innovations in blockchain technology and its implications for businesses, economies, and trade have made it crucial for business owners, consumers, decision-makers, and the general public to familiarize themselves with this technology and web3. Good web3 designers will help you integrate blockchain technology into your products or services as well as help you market them.