Digital currencies, like Bitcoin, are interesting for the future. However, I am more excited about what Blockchain can and will do in the future. I will look at 8 potential uses for the technology and how I think it will change how many things are done today.
1. Smart Contracts in the Legal Profession
There is a digital revolution going on in the legal industry and blockchain is the technology leading this transformation. The law is being digitized. If you have ever had to close a mortgage or been part of any legal dispute you know that lawyers are good at creating tons of paperwork. I am convinced they are paid by the word sometimes.
If we can digitize the process of keeping track of the paper trail then it will reduce the cost and potential for human error. It could be a game changer. Firms like Stampery are focused on recording everything on a shared ledger that becomes irrefutable digital proof that this legal event happened between two parties.
This could be anything from a marriage to a divorce proceeding; a house sale to a land reclamation; and anything else that involves digital proof. Cutting costs out of the legal system from administration to time would be a game changer for the legal profession.
2. Clearing and Settlement
Now this is probably one of the most interesting potential uses for Blockchain when it comes to finance. Clearing and settlement costs the financial industry billions of dollars yearly. Global banking giant Santander believes Blockchain technology could save the industry $20 billion a year which would be a huge benefit to consumers in lower fees for transacting things like wire transfers, money grams, and clearing fees on investment trades.
Let's look at a simple example. Currently if you sell a stock the transaction takes 3 days (T+3) to complete and settle and the money to show up in your account. If we see a universal adoption of blockchain technology in the financial market that transaction settlement and clearing could go from a 3-day process to an almost immediate process.
With ISO 200222 standards for real time payments being a goal for the financial industry I believe we will see Blockchain become the backbone of how all financial transactions occur at some time in the not too distant future. It will require a major technology upgrade for the entire industry, but I believe the long-term benefits and savings of time and money will be too good to ignore.
3. Payments
Swift, the interbank payments platform, has been testing a system for a few years that they believe will be how all cross-border payments are processed in the future. It does not currently include blockchain technology mainly because Blockchain in its current state is not ready for this.
However, they are building their new system to be able to adapt and include blockchain in the future if it becomes more viable. The biggest hindrance to the interbank payment system using Blockchain today is the sheer volume of transactions that are done. It will require more testing but I think it will get there eventually. In the interim Blockchain is revolutionizing peer to peer direct payments and doing it in real time transactions with no bank delay.
4. Smart Assets
Think of all those components being bought and sold in the supply chains of the world, and then think about all those components being recorded in near real-time on a shared ledger. They have been talking about having real time transactions around bills of lading and letters of credit but the challenge has been recording of the bill and then documenting the movement of the assets.
If we digitize the bills and letters of credit and you have a more real-time view of the world and supply chain. It is a smarter system because you can record more than just a product's serial number and value like the current systems allow.
You can record virtually any other information you want like destination, who is shipping it, who is shipping it when it reaches port, tax, and government clearance. That is why it's a smarter tracking system. The banks that invests and adopts this sort of system will have a competitive advantage in the future.
5. Digital Identity
If Digital Identities are recorded on blockchain protocol, then my things can have authorization to transact on my behalf. In other words, I would have an identity recorded on a shared ledger, and then can add devices to my identity.
Over time, I could add smart objects too, from my shoes to my fridge to my car to my heating to anything. This will allow for a more secure way to verify someone's identity and allow for a reduction in fraud.
6. Voting
Think about it for a minute. A secure voting record that requires authentication of a voter's identity and has a trusted tally. What would the news media and candidates do without the ability to blame their loss on voter fraud or hacking (Sort of kidding).
Blockchains can serve as the medium for casting, tracking, and counting votes so that there is never a question of voter-fraud, lost records, or fowl-play. By casting votes as transactions within the blockchain, voters can agree on the final count because they can count the votes themselves, and because of the blockchain audit trail, they can verify that no votes were changed or removed, and no illegitimate votes were added. If Blockchain voting were in place today all of the nonsense that surrounded the 2016 Presidential election would have been a moot point.
7. Healthcare
Healthcare institutions suffer from an inability to securely share data across platforms. Better data collaboration between providers means higher probability of accurate diagnoses, higher likelihood of effective treatments, and the increased ability of healthcare systems to deliver cost-effective care.
Blockchain can allow hospitals, payers, and other parties in the healthcare value-chain to share access to their networks without compromising data security and integrity. To give you a simple example a hospital has up to 20 different ways to enter a patient's date of birth and no ways to standardize it. Blockchain would allow the hospital to tie a patient to their data rather than tie them to their identity.
8. Insurance Contracts
Smart contracts could provide transparency and an irrefutable record for managing claims if it was put on a blockchain and verified by the network. This would mean that identical claims would not be paid thus reducing the potential for fraud and duplicate claims being paid. Blockchain would allow for a more streamlined claims process that would be beneficial to the customer experience as well as save money for the insurance company.
This is just a small sample of the potential uses for Blockchain. As the Internet of Things continues to evolve the uses and potential uses for Blockchain will expand as well.