Blockchain is a revolutionary technology.
Even the most severe cryptocurrency skeptics won’t deny that the technology is revolutionary. But many people overlook the simple fact that while blockchain enabled cryptocurrency, it is more than the building blocks of digital currencies.
Beginning years ago, and certainly continuing into the future, blockchain will be applied in many different ways. So, let’s look into:
There are several use cases for blockchain that started to materialize very early on.
Supply chain management/logistics saw some of the earliest real-world applications. This is arguably completely natural, as the basic function of blockchain technology is a transparent and immutable ledger.
Blockchain enables the shared monitoring of steps of a process. It is shared with everyone involved and can’t be tampered with. In logistics, this is the first step.
Blockchain provides a permanent and tamper-proof record of all items and transactions in the supply chain. It’s possible to track everything from the source to the end customer.
Because everyone has access to the same information, the risk of fraud is lower. If fraud or theft should occur, it’s obvious to everyone with access to the ledger. The ledger itself is tamper-proof. So, criminality can only occur through blatant (transparent) actions that leave a clear and permanent record.
Petty criminality is of course always possible; what blockchain entirely removes is the ability to deny, obfuscate, or otherwise get away with any crimes. In terms of network security, blockchain is solid. Data breaches are much more difficult than with more traditional systems.
Process automation is another benefit. All manual processes in supply chain management can be automated, speeding up operations and reducing costs.
You will see these above themes repeated for all current and future use cases.
Data storage with blockchain is an ideal solution if the goals are:
Organizations can use blockchain to transfer data seamlessly. They are designed for interoperability, so blockchain-based systems can be applied across applications and organizations.
In terms of personal data, the advent of “digital identity” predates the blockchain, but has been kicked decades forward with blockchain’s help. In some cases, it has been applied to:
Healthcare management is one of the main administrative and managerial proving grounds for this technology. This is an earlier use case.
Healthcare management tasks that blockchain is ideally suited for include:
This technology effectively facilitates privacy, security, and transferability needs. Of all industries, these kinds of tasks are the most complex and difficult but important in healthcare.
An example use case would be clinical trials. Blockchain is used to securely track and store information related to trial participants, treatments, and outcomes.
We say “other” because the above processes can be applied in similar fashions for many other functions. The overlapping themes are security, transparency, anti-tampering, and transferability.
Some ideas have been explored that can be touched upon more in regard to future uses.
This technology may see greater use in some key functions.
There are even ideas pitched that blockchain qualities can be applied to voting. There are many active, informal use cases of this already.
Real estate management is another industry that is being focused on. It’s less complex than the needs of healthcare companies. But it’s a serious matter, of course, and one with complex legal requirements.
There are already current use cases for digital identity. However, there are not yet any widespread, mainstream use cases. But it’s easy to imagine blockchain-verified driver’s licenses and other government IDs at some point.
The theory is simple: a decentralized system for storing and managing personal identity data. The benefits are of the exact same character as those discussed for the existing use cases.
Blockchain can potentially be used to decentralize energy systems. Ideas on this surround efficiently sharing energy between organizations and even between individuals.
Intellectual property rights are among the most difficult rights to enforce, globally. Lack of strong intellectual property rights guts artists of all kinds around the world.
The blockchain solution would be an overlap of its data management and data ownership and verification use cases. It may be used to securely track the ownership and distribution of music rights and royalties.
These are certainly all great ideas. They are all grounded in reality and have been tested to some extent in many real-world cases. But there are some challenges to implementing blockchain solutions at scale.
Scalability is the first real challenge. The decentralized nature of blockchain makes it difficult and often demanding to handle high-quantity requests. It can also be energy-intensive, another issue some in the crypto industry are trying to address.
Overburdening blockchain networks can nullify the efficiency benefits they are known to provide. It leads to slower transactions, which is acceptable in crypto trading, but not in many of the potential use cases we’ve gone over.
The other challenge related to scalability is one of interoperability.
More broadly, the lack of standardization is a huge technical roadblock. The networks that exist now are built on different protocols and for the most part, cannot communicate with one another. This means that for now, most implementations must be small-scale, isolated use cases.
While privacy can be protected, blockchain transactions are meant for transparency. This is a challenge for some other blockchain use cases.
Last but certainly not least, bringing crypto into the regulatory sphere has already been challenging enough.
Blockchain regulation is still in its infancy and the application of the law towards it has so far been ad-hoc and indirect. A thorough normalization of blockchain functionality regulations may be needed before large-scale, public use cases can be turned into a reality.
As an exciting and revolutionary new technology, the blockchain is making many waves, but also hitting many walls.
It’s certainly here to stay, however, and how we use it is up in the air.
Many professionals and organizations from all walks of life are actively trying to improve blockchain technology. It certainly has the potential to transform industries. Small-scale solutions have already proven blockchain’s potential.
With time, it’s likely that this technology’s challenges will be overcome and it will provide its benefits of transparency, security, and more to other areas of our lives.
