The blockchain technology is slowly gaining traction in the mainstream. The technology was generally unheard of more than a decade ago, but it is predicted to have a market capitalization of 3 trillion dollars by 2024. The efficiency, transparency, and versatility associated with blockchain technology have appealed to various industries, making a wide-scale adoption a real possibility in the coming decades.
Due to its potential to disrupt the traditional infrastructure, many businesses have already started integrating the technology in everyday business operations. A 2017 report found that 16 percent of companies had purchased blockchain enabled tools, while 22 percent were developing tools using the technology. Before we discuss how various industries are adopting blockchain technology, it is important to understand blockchain and how it works.
Blockchain technology underpins the digital currencies like Bitcoin and Ethereum. It is a distributed ledger that stores information permanently without a central governing body. It uses a network of personal computers to store data that can be accessed by anyone with an internet connection. Every user in the network looks after the data which makes the technology hackproof. Blockchain stores information as blocks, each with its timestamp and link to a previous block. Hence the blocks are linked to each other in the form of a chain which is where the name ‘blockchain’ comes from.
Though initially developed for cryptocurrencies, the technology is no more limited to it. Many industries have come to the forefront to use the underlying principles of blockchain and transform their business models. It is expected that the blockchain platforms will contribute to 10 percent of the global GDP within the next decade. This demonstrates the immense potential the blockchain technology holds for various industries.
Five Industries that are adopting blockchain
Given the profitability of the blockchain, many companies across various industries are currently harnessing the power of the blockchain technology. Here we present the five prominent industries that are actively looking for blockchain solutions.
1.Banking and Finance industry
When an average person hears ‘blockchain,’ they immediately think of digital currencies. So it comes as no surprise that banking and finance top the list. The industry is among the early adopters of the blockchain technology. It is leveraging the power of blockchain to eliminate the issues in the current banking systems.
The finance and banking industry, albeit much sophisticated compared to the past decades, still lack inclusion and fairness. The transactions we do currently favor the financial companies as individuals are often forced into unfair deals. Customers gain very little from their interactions with banks.
Cryptocurrencies and blockchain, with its incorruptible ledger and no centralized authority for supervision, offer a solution to this problem. They place power back in the hands of the individual without usurious interest rates and intermediary fees. With the help of a smartphone and an internet connection, both of which are almost ubiquitous now, anyone can bank and transact.
The Swiss multinational investment bank UBS and the UK based Barclays are currently experimenting with blockchain. According to experts in the banking industry, this could save us up to $20 billion by eliminating infrastructure and middleman costs. Many banks are now partnering with cryptocurrency and blockchain based startups like Ripple. It recently drew attention for its partnerships with the Saudi Arabia’s central bank. The rise of blockchain based startups and platforms like Cryptochats is a harbinger of a decentralized future.
2. The Automotive industry
The blockchain technology is also transforming the automotive industry as it enters a new era of digitization. Major brands in the industry have shown interest in the technology that will bring fundamental changes to their business models. The Frost and Sullivan research showed that the total automotive industry’s spend on technology is projected to stand at USD 168.80 billion by 2025, with 0.6 percent of the investment in blockchain technology alone.
From vehicle financing to vehicle insurance and auto supply chain management, the technology is proving to be the driving force for the automotive industry. The three-pronged strategy is recently put forward by Toyota Research Institute. It is an example of how the main players in the auto industry view blockchain. They consider it to be an essential factor in the new mobility ecosystem.
Mahindra & Mahindra (M&M), is a multinational and conglomerate and a leading automaker in India. It created a blockchain incubator that specifically focuses on the auto financing use case. The auto industry is also benefiting from blockchain technology with platforms like The Autoblock that connects you to automobiles’ buyers and sellers. The transaction takes place via the AutoCoin – the platform’s dedicated currency that incorporates blockchain technology.
3. Real Estate
The practice of buying or renting a house or apartment includes interaction with landlords, security deposits, and endless paperwork which is painful. People are desperately looking for solutions that make housing arrangements simple and efficient, preferably without any involvement of a third-party.
Various blockchain based projects have been presented that incorporate the technology in the real estate industry. The Rentberry platform is one such solution that employs smart contracts to ensure a seamless rental experience. It directly connects landlords with tenants; hence removing the brokers’ exorbitant fees from the rental equation.
Atlant is another project in the property space that uses smart contracts to simplify property purchase. It empowers sellers to list their property assets on blockchain and tokenizes its value when verified. Its peer to peer transaction features allow users to avoid intermediaries involved in rental transactions, making the process more secure and cost-effective.
4. Healthcare industry
The healthcare industry currently suffers from obsolete processes, poor data management system, and outdated infrastructure. Better data management would ultimately increase the probability of accurate diagnosis which will lead to more effective treatment. Use of blockchain technology will allow everyone in the healthcare value chain to share access to their networks. This can be done without compromising on data security and integrity.
Los Angeles based startup Gem developed the Gem Health Network, a blockchain network for companies across the healthcare industry. It uses Ethereum blockchain-enabled technology which ensures a secure data-sharing infrastructure for the healthcare space. Patientory and DokChain are two other blockchain-based projects that work in the healthcare industry.
5. Cloud Computing:
Heavy computing power is now a fundamental necessity. Most of the tasks that we do today, particularly in the scientific industry, require extensive computation. The blockchain-based processing project Golem Network does exactly this. It allows users to rent out their computing resources like processing power to people who can then perform their computationally intensive tasks. Users are rewarded with tokens in return for their computing resources.
The impact of blockchain technology on various businesses looks profound. Different industries are beginning to invest in blockchain solutions. This is an attempt to leverage the power of the distributed ledger and untampered data. Besides the five industries we covered in this post, other industries like music, insurance, trading, etc. are equally being influenced by blockchain technology. The versatility, profitability, and transparency of the blockchain make it truly the invention of the 21st century.