Many analysts believe blockchain technology may represent a paradigm shift akin to the introduction of the internet. When all is said and done, blockchain technology may end up becoming the greatest invention of the 21st century. However, despite its numerous use-cases, many still believe that blockchain equals bitcoin. We don’t know about you, but that doesn’t sit right with us. So, in this guide, we will be looking into some top 10 blockchain use cases. These are all use cases that show that blockchain technology applications lie far beyond merely powering a monetary system.
What are the use cases for blockchain?
To preface and more properly understand these use cases, let’s first revisit the three main properties of blockchain technology.
- Decentralization: One entity doesn’t control the data inside the blockchain. In other words, blockchains don’t have a centralized governing body running in the background calling all the shots. The blockchain is ruled and governed by its network.
- Transparency: The next cool property that you should know about the blockchain is transparency. In fact, several blockchain technology applications are possible because of this very feature. So, what exactly do we mean by transparency? Every single data that you put on-chain will be visible to the entire network.
- Immutability: Finally, we have immutability. This concerns how blockchain technology uses cryptographic hash functions to make sure that no one can tamper with on-chain data.
So, when you bring in all these properties, what are the different use cases to explore and improve with the blockchain technology? Let’s take a look.
Top 10 blockchain use cases #1: Finance and Banking
One of the primary purposes behind the creation of Bitcoin was to make the banking system irrelevant. Therefore, it’s quite ironic that blockchain technology can help the ancient banking system evolve to the next level. While there are several applications, let’s focus on just one of these – cross-border payments.
We are living in an increasingly digital world. Post-pandemic, our offices and workstations have become entirely digital. In fact, the number of freelancers with overseas clients has steadily increased even before the pandemic. Which is why, now more than ever, we need a system that allows for seamless and frictionless international transfers.
An overseas transfer can currently take up to 2.5 business days and is pretty expensive because of the sheer number of mediators involved. Utilizing the blockchain allows two parties to connect with each other without going through an intermediary directly.
So, how potent can blockchain-integration be here? Consider this example.
In July 2016, SAP collaborated ATB Financial and Ripple to send the first international blockchain payment from Alberta, Canada, to ReiseBank in Germany. The idea here was to leverage Ripple’s blockchain network to facilitate this transaction. They used this system to send $1,000 CAD from Canada to Germany in just 20 seconds. Keep in mind that typically, this transaction would have taken 2-5 business days.
Top 10 blockchain use cases #2: Food Industry
Walmart has teamed up with IBM to integrate the blockchain in their food management system. Currently, we need a robust and transparent supply chain for our food industry. After all, it is pretty appalling that we still don’t know where our food comes from.
To understand why this is important, just turn your clocks back to October 2006. There was a significant e-Coli outbreak in the USA, which affected around 199 people, killing 3. This caused the entire spinach industry to shut down for two whole weeks.
With blockchain integration, immutability and transparency would have allowed you to solve this problem at a fraction of time. Here are some of the pain points that we can solve by integrating blockchain in the food industry:
- Improves food safety.
- None of the suppliers will risk sending over sub-par food.
- Every single morsel of food is accounted for.
- Transparency reduces/stops food fraud.
- It allows the consumer to trace its ingredients to its very source.
Top 10 blockchain use cases #3: Healthcare
Moreover, the healthcare industry can benefit a lot from blockchain integration. This is naturally even more apparent now, as healthcare systems worldwide struggle to tackle the COVID-19 coronavirus pandemic and inherent weaknesses in the systems are revealed. Here is a quick overview of all the blockchain use cases in this space:
- Interoperability is a huge problem in the healthcare industry. In fact, improved healthcare interoperability has been a top priority for providers, policymakers, and patients for quite some time now. One of the worst examples of this lack of interoperability is “information blocking.” The transference of patient data from one hospital to another may not be that simple. Via blockchain integration, you get full control over your data, and you don’t need to be at the mercy of a random third-party.
- Patient records sent over the blockchain aren’t tamperable. This is very important since patient data must be kept safe, secure, and free from data corruption.
- Cryptographic hash functions govern on-chain data. As such, this gives patients full control over their data.
- Blockchain-issued tokens can incentivize patients for good behavior. For example, patients can get rewarded for giving their data for clinical research.
- Fake and counterfeit drugs are a massive problem in the pharma industry. These fake meds cost the industry around $200 billion every year. A transparent, blockchain-based supply chain can allow you to closely track these drugs and eliminate falsified information.
Top 10 blockchain use cases #4: Insurance
Insurance fraud is a big issue that harms both the service provider and the end-users. Despite using a plethora of anti-fraud technology, the sad truth is that the insurance industry still loses a staggering $80 billion per year. If you think that it’s only the insurance companies that are losing out, then think again. On average, a family can lose anywhere between $400 to $700 per year.
So, why is everyone losing money despite these sophisticated anti-fraud technologies? Turns out that it mostly comes down to visibility issues. There is so much complicated paperwork involved that it is hard for anyone to make heads and tails out of it. Plus, criminals can actually tamper some of this data to modify information and make frauds.
What’s the solution?
- Firstly, the blockchain’s transparency can solve the fraud problem pretty effectively. Higher visibility means higher coordination between the insurers,
- The blockchain’s non-tamperability can make sure that no one can doctor the stored data inside the blocks.
- Claims that are residing in the blockchain can be straightforward for the insurers to verify when required.
Top 10 blockchain use cases #5: Lending
How does lending work? A user deposits their money to the bank. If someone else withdraws it, then they can earn interest off it. In the traditional financial system, banks and third-party lending services are in charge of issuing loans.
Since there are many risks involved here, they conduct thorough background checks like annual salary, credit score, and past defaults. These tests can exclude a lot of people from participating in the process.
Decentralized Finance, or DeFi, is a whole class of blockchain technology applications that aims to create decentralized versions of traditional financial instruments. Lending is an example of a DeFi use case. DeFi Lending apps can connect borrowers directly with lenders, mitigating the need for an intermediary. The lender and the borrower are bound to each other via a smart contract which is responsible for:
- The correct distribution of the interest generated.
- Dictate the whole loan agreement based on predefined conditions.
This open and public nature of DeFi lending can be beneficial for both the borrower and the lender.
Top 10 blockchain use cases #6: Real Estate
The total global real estate is worth hundreds of trillions of dollars, with residential property making up a vast majority of it. However, like all the other industries discussed in this article, it’s extremely outdated.
- The barriers to entry are really high. Real estate is often known as the playground of the super-rich. Normal folks can’t invest in real estate due to nationality, lack of an international bank account, credit score, etc.
- The real estate transactions are notoriously opaque, so they are often used to launder dirty money for ages.
- You often need to deal with a lot of intermediaries that bloats up your transaction fees.
- Real estate is also notoriously difficult to liquidate. In fact, this may be the biggest problem with this space.
Blockchain technology allows you to tokenize real estate, which opens the gates for global investor participation. The advantages of this approach are mainly threefold:
- First, tokenization leads to fractal ownership. So instead of owning a whole mansion, you own a tenth of the mansion. This reduces barriers to entry drastically.
- Tokens can be bought and sold on the exchange. The same goes for tokenized real estate, as well. This increases liquidity exponentially.
- Tokenization helps you to diversify your portfolio. Instead of locking up all your money in one property, you can invest in multiple properties with the same capital.
Top 10 blockchain use cases #7: Identity
How do you define “identity?” According to the United Nation Convention on the Rights of the Child, article 8, the most basic identity must consist of the following data:
- Full name.
- DOB (date of birth).
- A national identifier (social security, driver’s license, etc.)
We all know the importance of one’s identity. You can’t open a bank account, vote, or find employment without one. However, the way we have third-parties handling our identity is pretty abysmal. Centralized servers and databases store up our confidential data, which is very problematic because:
- The third-parties who own the servers are in complete control of your identity.
- Threat actors can hack into these servers and steal your personal details.
- Centralized servers can also mishandle your data.
One need not look further than the Equifax data breach and the Facebook Cambridge Analytica disaster to know how dangerous centralized data storage can be. Ideally speaking, we need a storage system that respects the following conditions:
- Digital units shouldn’t be easy to replicate.
- It should be impossible to tamper with the files stored in it.
- The processes used by the system must be immutable.
All in all, blockchain technology satisfies all these rules. Projects like Sovrin and Civic are working on different implementations of digital, decentralized identity.
Top 10 blockchain use cases #8: Hiring
Hiring is another issue that needs to be solved as soon as possible. As education becomes more expensive and competition becomes more fierce, many students tend to opt for fake certification. “First Advantage” did a “Background Discrepancy Survey” in India to know how problematic it was. The results they found were horrifying.
- 59% of the education discrepancies were from the Graduate level.
- The most significant discrepancies were “Fake Documents” and “Suspect Institution.”
- 50% of the job seekers they interviewed had some form of discrepancy.
Issuing digital certificates on the blockchain can turn verification into a straightforward process. There is no need to go through several intermediaries when you can just log into an app and check an individual’s record, right? The blockchain’s complete immutability guarantees the validity of the data. Just imagine how much simpler and more efficient, you can make the whole process.
Top 10 blockchain use cases #9: Voting
Countries around the world are still using the draconian paper ballot system for voting. The underlying idea is simple, put your vote down on a piece of paper. Following the voting period, whoever gets the most votes, wins. This system is very inefficient because:
- It’s very labor-intensive.
- Vote counting is a lengthy process and open to human error.
- It’s easy to hijack the system with fake votes.
- Powerful entities can use intimidation tactics to turn voting into a farce.
- You can’t keep track of your vote once cast.
The blockchain technology and public key cryptography can help modernize voting exponentially. Since the vote gets recorded on the blockchain and anyone can verify whether the signature is valid or not, the voter can keep track of their vote. Cryptography guarantees complete anonymity.
Top 10 blockchain use cases #10: Cryptocurrency
When someone asks you, “what are the use cases for blockchain,” the first thing that pops into your head is “cryptocurrency.”
While it may seem like cheating, the fact remains that the greatest and the most successful use case of the blockchain is cryptocurrency. Think of the true potential of this invention. Fiat money is utterly dependent on the competence of the central government. Failed states like Venezuela, Zimbabwe, and Bolivia are currently undergoing the worst hyperinflation ever seen.
People have opted for cryptocurrencies to ensure that their entire life’s savings don’t get completely devalued.
Now, that’s a powerful use case if ever there was one!
We hope that after reading up about different blockchain technology applications, you could understand its true potential. It’s the very definition of a horizontal innovation that can positively disrupt multiple industries at once. We should feel privileged to be officially living in the era of blockchain.
Speaking of which, do you want to learn more about this fantastic field? Why don’t you check out our blockchain courses at Ivan on Tech Academy? Ivan on Tech Academy is one of the most popular blockchain education academies available and is a one-stop-shop for everything blockchain-related.