Initially, the primary blockchain application was to facilitate transactions in the financial sector.
Nowadays, the blockchain application can be seen in various sectors.
Today, various industries using blockchain technology, with five industry accounting for 67% of all blockchain startups. Finance industry continues to be the most popular industry. Healthcare, energy, and food/agriculture are also becoming popular user of blockchain. Real estate, legal, arts, and culture are just a few of the industries that still lack uniform regulations across all countries.
1. Blockchain Application in Finance & Banking
High transfer fees, poor exchange rates, and even some hidden costs come with using a third-party partner as a bank. Furthermore, the procedure is time-consuming and not completely secure. The most significant benefit of blockchain is that it provides a low-cost, high-security peer-to-peer payment system. By recording all transactions in a public ledger, blockchain eliminates the need for a third party and provides complete transparency.
The main driver for blockchain adoption in the finance sector was an out-of-date infrastructure and pressing cost-cutting needs. Many startups began by investing in better processes in order to enable cheaper and faster financial transactions while maintaining a higher level of security. In the financial industry, both retail and investment banking, blockchain technologies are providing a solution for low and pressured margins.
85% of asset managers predict that blockchain technologies will provide real-time transactions and transparent data logs for documentation and reporting purposes, as well as disrupt the Transfer Agent value chain, in the coming ten years.
2. Blockchain Application in Energy Management
Previously, the energy management industry used to be highly centralised. To transact in energy in more developed countries, businesses had to go through an established power holding company or the National Grid or deal with resellers who previously bought from large electricity companies.
The blockchain application could eliminate the need for third-party intermediaries, and some startups are already rethinking the traditional energy exchange process. Transactive Grid is one of them and it makes use of Ethereum technology to allow people to generate, buy, and sell energy to their neighbours in a decentralised manner.
3. Blockchain Application in Healthcare
Drug development is a high-cost, long-term process with a low success rate and it is one of the biggest issues in the healthcare industry. Finding, acquiring, and retaining patients for clinical trials is a crucial challenge. Another significant hurdle is that administration and regulations in different countries may differ. According to a study published in the United States Academy of Sciences, the success rate is only about 10%.
Another significant issue is falsified medicines due to a lack of transparency. Due to the sensitive nature of data and data standards, collaboration between major industry players was nearly impossible. Blockchain technology has the potential to facilitate collaboration while also ensuring data security and privacy.
People's health information was kept in centralized files that could be easily damaged, stolen or lost. Furthermore, the time it takes to access data when someone requests it is lengthy, and data is exposed during this time. Blockchain eliminates the need for a central authority and allows for quick access to data. Furthermore, the blocks are connected and distributed across the blockchain nodes, making data corruption more difficult.
4. Blockchain Application in Food & Agriculture
One of the most significant challenges in the food production industry is establishing trust between manufacturers and consumers. Only 33% of consumers trust food companies, and nearly 75% say they will switch to companies that are more transparent and provide more information. 70% of people are also concerned about the environment's impact. By design, blockchain can increase trust in these brands while also increasing transparency and accountability.
Farmers and growers are essential elements in producing high-quality food, but they are frequently overlooked, and sustainable producers struggle to stand out and raise prices. This effectively disincentivizes them, but blockchain could solve this problem by increasing transparency, which would encourage consumers to spend their money on sustainable products.
5. Blockchain Application in Cybersecurity
Cyberattacks are an extreme danger to the general public. In 2015, the total cost of cybercrime was $3 trillion. The costs of cybercrime are increasing at an annual rate of 15% and are expected to reach $10.5 trillion by 2025.
Blockchain is a decentralized system. It records all previous transactions securely and transparently without jeopardizing the owner's personal information. Another advantage of blockchain technology is that it encrypts all data with a cryptographic algorithm, making large-scale attacks impossible.
Peer-to-Peer transactions is the third benefit that blockchain offers. It helps to detect malicious attacks quickly and data cannot be tampered with.
6. Blockchain Application in Supply Chain Management
In supply chain management the biggest challenge is a lack of transparency. As a result, there was a lack of coordination and communication among the various vendors, resulting in lower reliability and service redundancy.
Blockchain allows for product tracking by facilitating traceability throughout the supply chain. It provides permanent transaction transparency and validation, allowing almost everything to be tracked, from the date and time to the history of where the goods have been. For example, if you place an order for specific food and are dissatisfied with it, the owner could go back in time and find where the order went wrong in the supply chain. He can move from farmer to producer, distributor, retailer, and finally to the person who placed the order.
7. Blockchain Application in Real Estate
During the buying and selling of properties, the real estate industry has issues with transparency, copious amounts of paperwork, possible fraud, and public record errors.
Blockchain could aid in the recording, tracking, and transfer of land titles, property deeds, and liens, as well as ensure the accuracy and verifiability of all documents. Some startups like Propy use a blockchain-based smart contract platform to allow buyers to secure home purchases.
8. Blockchain Application in Human Resources
The application of blockchain technologies to the HR industry could solve several issues.
Talent acquisition was a time-consuming, labour-intensive, and costly process. With blockchain application, it is possible to accurately assess a potential recruit's education, skills, and performance. This activity will lead to better role allocation and increased productivity by automating payroll and VAT while reducing administrative time. Small and medium-sized businesses will benefit the most because they will be able to devote this time to expand their operations.
Many multinational corporations may develop their corporate currencies. It will allow them to transfer value across their global operations in real-time without incurring additional costs from third parties. It results in managing cross-border payments and employee mobility more effectively.
Small and medium-sized businesses will benefit from the cybersecurity and data protection that the blockchain application provides. Lack of data transparency, cybersecurity, and fraud threats are all issues that blockchain may be able to help with in the future.
9. Blockchain Application in Accounting
Accounting is related to the measurement, communication, and analysis of financial data. It is also related to planning on how to benefit from the proper allocation of resources. Blockchain has the potential to lower costs, improve efficiency, and provide complete transparency into asset ownership and history.
Blockchain has the potential to improve the process of determining the value of a company's data. In the long run, the accountants that are mainly focused on their role may be jeopardised by the adoption of blockchain technologies. But some accountants who are willing to learn more will have plenty of time to devote to judgemental and consultative areas, such as due diligence in mergers and acquisitions.
Accountants excel at record-keeping, critical thinking, applying complex rules, business logic, and establishing standards. This provides them with a unique opportunity to shape and influence how the blockchain is used in accounting. It will take some time for blockchain to be developed, standardised, and optimised. Most blockchain applications and start-ups in this niche are currently in the research or proof-of-concept stage, and delivering regulations and standards remains a major challenge.
Data analytics and machine learning, in combination with blockchain development, will boost accounting efficiency and value. Many processes will be improved, and the need for reconciliation and dispute resolution will be reduced, as well as the certainty of rights and obligations. As a result, the skills needed to be an accountant will change. Reconciliations and provenance assurance will be reduced, while advice on blockchain adoption and assessing the impact of blockchain on their clients' businesses will be increased. They'll have to act as a link between various business stakeholders.
10. Blockchain Application in Education and Academia
Verifying academic credentials in primary, secondary, and higher education remains a manual process with many frauds and claims of unearned educational credits.
Blockchain technology has the potential to simplify verification procedures and aid in the resolution of the aforementioned issues. Sony Global Education and IBM have already developed an educational platform to secure and share student records based on this technology. Learning materials could be made more accessible with blockchain, administrative tasks could be simplified, and communication and data sharing between parents could be improved.
Conclusion
Blockchain is a method of recording transaction lists that is decentralized and transparent. It was first released on January 3, 2009, and the cryptocurrency bubble drew the most attention in 2017. The blockchain technology has a lot to offer from online payments to product and business process transparency. Blockchain also significantly reduces fraud and corruption. We can conclude from these use cases that blockchain technology's potential applications are limitless.
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