While Bitcoin is getting most of the attention in the popular press, there are plenty of applications for blockchains well beyond cryptocurrencies. The six use cases below demonstrate how blockchain technology offers the potential to revolutionize a variety of industries.
1. Asset Management
One major use case for blockchain development is managing the secure exchange of assets. Traditionally, when you provide money to an exchange in return for an asset, it’s the exchange’s responsibility to manage those assets. This means that they can use the money in ways that you are unaware of or that you did not necessarily consent to.
By decentralizing and anonymizing the exchange of assets, blockchain transactions can occur transparently and at a much faster pace.
Blockchains also give a major boost to exchanges in terms of security. By scattering data across thousands or millions of blockchain nodes, the network becomes much harder to attack.
2. Insurance Claims
Using blockchains has the potential to benefit both insurance companies and their customers. Consider the information-transparency possibilities for custom software development in this sphere. For example, if customers were to change insurance providers, a blockchain could list the history of the customers’ insurance claims to prevent them from hiding any information.
Meanwhile, customers could view the complete list of claims that their insurance provider has received. This improved information transparency shows which claims received approvals or rejections. It also shows how long the claims process takes.
Some consider protections such as title insurance as a waste of money because they’re very rarely necessary. Without understanding all the risks for yourself, however, it’s hard to tell whether a given policy is actually worth it or simply a giant money pit. By making transactions public on a blockchain, customers become better informed about the policies they’re considering.
3. Internet of Things (IoT)
Perhaps the biggest stumbling block for blockchains right now is their speed. Verifying transactions takes time, which is time that users do not always have.
To put sensors for controlling home-lighting systems on the blockchain, for example, it might take up to half an hour to propagate and update the data.
Due to these issues, many Internet of Things applications -- also known as "IoT" -- are using decentralized systems that work like a blockchain but that can update themselves within seconds. IoT development keeps improving too. Platforms such as Ripple, a distributed payment network, can now perform more than 50,000 transactions per second, twice as many as the VISA network.
For applications like detecting road ice, in which time is of the essence, blockchains may not be the best choice. However, industries such as supply-chain management and other industrial IOT applications don’t necessarily rely on real-time information in order to track the origin and movement of goods.
Startups such as Everledger are proposing the use of blockchains to revolutionize supply-chain management. For example, by recording the provenance and transportation of grapes on the blockchain, you can help cut down on wine counterfeiting, which affects as much as 20 percent of the world’s fine wines.
Blockchain technology could also help empower patients by giving them more control over their sensitive personal data.
When visiting a specialty doctor such as a dermatologist, you might want to give out certain information such as your family history of skin cancer while withholding other information, such as your fertility treatments.
By putting your personal health files on the blockchain, you can mete out access to this data as you see fit while preventing access to other irrelevant information. This pick-and-choose capability would also be useful for applying to jobs with certain health requirements. It's also practical to help you switch hospitals without having to provide the same information again.
As with healthcare, blockchain technology can help you selectively provide personal information to the people and organizations that need it without sending your entire life history.
Customers at a bar, for example, must show IDs to verify their age. When you provide your physical ID card, however, the bouncer can see other sensitive information such as your address and ID number.
If you opted to put your personal data on a blockchain, you could move to a permissions-based model to verify that you are old enough to drink alcohol by transmitting your age without providing other irrelevant data.
Blockchain technology is not just useful for a night out. You could potentially save hours of work by automatically propagating electronic forms with immutable personal data such as date of birth.
6. Security and Compliance
The immutability of the blockchain is ideal for industries highly concerned with security and compliance issues, like healthcare and finance. Laws such as HIPAA and Sarbanes-Oxley require organizations to keep appropriate records and safeguard individuals’ private data.
Because no one can change transactions once they are on a blockchain, you can have verifiable proof that you have been compliant with all applicable regulations during an audit.
While there are many applications of blockchain technology well beyond cryptocurrency, you do not need blockchains for everything.
Just like the phrase “Uber for X” was the hottest startup-idea pitch a few years ago, the new phrase to get VC attention is “putting X on the blockchain.”
Be sure that your blockchain use idea actually makes sense for your purposes. What are you gaining with decentralization? Will you need to have implicit trust between the people using the system?
When you have the answer to questions like these, then you will have a better understanding of your business concept and the technology you need to execute it.
For more information about IoT development, machine learning development, and new blockchain applications, reach out to us.