WHY IS BLOCKCHAIN TECHNOLOGY A GAME CHANGER?
In recent times, blockchain has gained a lot of prominence due to the exposure and coverage that was given to the advent of the cryptocurrencies. While the impact and significance of the cryptocurrencies has been a hot topic for debates, no one can truly doubt the potential that the blockchain holds. With adoption of the blockchain in areas other than cryptocurrencies, such as transport and logistics, real estate, nucleobase sequencing, and the like, one can observe the potential of the blockchain from the fact it can be configured for use in general fields such as transport/logistics and real estate to highly specialized fields such as nucleobase sequencing. The purpose of this article is to shed some light on applications of the the blockchain technology and the reasons why blockchain technology is a game changer.
Some of the applications, which hold a lot of potential to disrupt the conventional systems and methods are listed hereinbelow.
This is the most studied and the widest application so far of the blockchain technology. The use of cryptocurrencies, which are built on the blockchain technology, facilitates payments across borders without the need for any trustworthy third-party such as a bank or a credit card processing company. Since the need of any trustworthy third-party intermediary is eliminated, the costs associated with such a transaction is significantly lower than that associated with the conventional modes of payments. Did you hear that? The cost of each transaction is significantly lower. That is exactly what is needed to disrupt a discipline, ways to lower cost of transaction. That is how Amazon has been able to impact so many areas of commerce by making it cheaper to go through Amazon than a traditional retailer. Retailers spend 2-3% of the cost of each transaction on credit card processing. Reducing that by 50% will do wonders for profit margins particularly in spaces where those margins are quite thin to begin with.
In trading of shares or goods, the maintenance of different records by the supplier, the broker, and the buyer creates a lot of room for error and mismanagement. A decentralized ledger or a blockchain, the access of which is present with the supplier, the broker, as well as the buyer can make the entire transaction very transparent to the involved parties, while at the same time also preventing the possibilities of making retroactive modifications to the ledger/blockchain. In some cases, for example in case of stock exchange, the implementation of the blockchain can also do away with the involvement of the brokers, thereby negating the brokerage that the buyers have to pay.
INSURANCE CLAIM PROCESSING:
The processing of the insurance claims is typically a laborious task for the insurance processing personnel, mainly because they have to reconcile the required data from very complex and fragmented data sources. In addition to that, they also need to scrap the fraudulent claims, which is all the more difficult since the the insurance processing personnel has to detect the fault/fraud in the claims by analyzing the data from the aforementioned fragmented data sources. The storage of the required data in the form of a blockchain instead of the fragmented data sources can ease up the entire process, while providing transparency between the customer and the insurance company.
This is perhaps the most interesting and innovative application of the blockchain after cryptocurrencies. Smart contracts aka self-executing contracts are contracts between two or more parties, in which the terms and conditions of the smart contract can be set to trigger one clause if the pre-requisite for triggering that particular clause has been met. For example, if X were to rent an apartment from Y, the clause can be set such that Y releases/provides the access of the apartment to X by a certain date once Y receives the payment from X. If Y fails to provide the access of the apartment to X by the decided upon date, then the smart contract initiates a refund of the money paid by X to Y.
The applicability of the smart contract is immense and it has the potential to completely change commerce. Imagine if parties to an agreement no longer had to worry about getting paid once they have performed their obligations under the contract. This could particularly work well where the contract has to be done in stages and after satisfactory completion of each stage certain funds have to be released. This could take place automatically as the tasks are completed instead of having to go back and make demands for payment. Some exemplary applications of smart contracts include smart contracts in construction industry, real estate transactions, automobile industry, healthcare, banking (loans and insurance), and so on.
The process of voting is laborious, to say the least. The United States has been struggling with this issue for many years and perhaps one of the most troublesome happened during the Gore/Bush election of 2000. Everyone remembers the hanging chads and the debacle that followed it all the way to the supreme court. More recently with all the discussions surrounding the Russian interference into our elections and whether the next election in 2018, the so called mid-term elections are going to be free from Russian hacking.
There is also the question of how much time one has to take off work in order to complete the voting process. One has to take out a healthy 4 – 5 hours from their schedule to cast their vote. This tends to deter a lot of people from casting their vote. One thinks that in the era of digitization, wouldn’t it be a good idea to cast votes online? However, that may not be a very good idea since hackers thrive to create chaos. And what better opportunity than the event of selecting the leader of one the most powerful countries in the world.
However, the blockchain has the potential to make this wish of casting your vote online a reality. Organizations such as Democracy Earth and Follow My Vote are already venturing into making the blockchain viable for electoral voting. Another advantage of using the blockchain in electoral voting is that it would create decentralized blockchain of the voting records, which will be open for inspection to any interested person, thereby mitigating the possibilities of having rigged elections.
A lot of non-profit organizations are doing genuine work to help the less fortunate ones. A lot of them do provide an option for making charity online. However, one does not have a means to know for sure whether the money donated has reached the ones who need it the most. Using blockchain, it will be possible for non-profit organizations to show the donor exactly how the donated money was utilized.
These are just a few applications of the blockchain. The will be a lot of growth in the field of blockchain in the coming years. There have been a lot of patent publications in recent times for inventions in the blockchain technology, and the trend only seems to be growing. Our next article in this series shall highlight the patenting trends in the blockchain technology.