What are the uses of the blockchain?
The creation of bitcoin was accompanied by another innovative technology: The blockchain. Since its inception, many are the uses that companies have given it. Do you want to know the potential of the blockchain? In this article, we will tell you all about the main applications of the blockchain.
Although the blockchain was created by the hand of Bitcoin, the innovative applications of the blockchain emerged with Ethereum. While the Bitcoin blockchain limited its use to financial applications, ethereum allowed to run small applications, known as smart contracts.
This development of blockchain technology has caught the attention of a multitude of international companies, which have begun to develop applications on Blockchain. Elimination of intermediaries, automation, security, or cost savings are some of the benefits of blockchain technology.
Below, we have collected a large number of blockchain applications in companies. The uses of this technology in different sectors can be endless. Therefore, if you want to know a specific application, we recommend using the following index.
Cryptocurrencies
Everyone relates blockchain technology to cryptocurrencies. And it is that the blockchain is the cornerstone of practically all virtual currencies. Thanks to them, this technology is developing considerably.
Like Cardano, which has created a layered blockchain supported by a Proof of Stake validation system, and although it is still in the testing phase, it seems to represent a notable improvement of the blockchain.
However, most experts dare to affirm that cryptocurrencies are only the tip of the iceberg in terms of the potential in the applications of blockchain technology.
Finance and economics
The main use of the blockchain is financial since its creation arises to support the transfers of virtual currencies. For this reason, the first uses of blockchain technology in finance sector, which is where it has been most developed.<
The financial applications of the blockchain are multiple: automation of transfers, payments of rental income, or creation of exchanges.
Its advantages over traditional finance are also numerous:
They avoid fraud since the conditions are fixed in the smart contract and are obligatorily applied.
They increase confidence since they allow them to operate with more security.
They reduce risks, both for individuals and companies.
Fintech and banking
Banks are increasingly applying technological solutions to improve their financial activities. This industry is known as Fintech or Financial Technology.
The union of fintech and blockchain is already something relatively common. Some studies highlight that 77% of fintech companies plan to adopt the blockchain as part of their systems and processes in two years. In the case of payment method companies, adoption increases up to 90%.
The advantages that the blockchain offers to the banking system lies in the automation of the process, which eliminates intermediaries and manual checks and translates into a considerable reduction in costs.
In addition, transfers made on a blockchain-based system also reduce times: All transfers, even international, would be resolved in a matter of minutes.
Big data
The blockchain does not stop being a huge ledger. A database that manages millions of daily transactions effectively and quickly. But it has a limitation: It does not have tools to analyze so much data.
The binomial that Blockchain and Big Data represent is the perfect combination to solve it. The tools offered by Big Data allow us to analyze all the data of a blockchain and obtain very useful information for companies.
For example, some utilities offered by Big Data applied to the Blockchain are:
- Security, since Big Data provides more instruments to detect potential fraud.
- Transparency, by being able to collect and classify all the information, allows it to be represented more accurately and clearly.
- Avoid risks, because it could detect risky operations.
- Provide data to financial companies, such as consumption patterns.
Notaries
A notary is an official who signs contracts and documents and gives authorization. If the capacity of the blockchain to manage contracts, both public and private, is recognized by the government, it could eliminate the intermediary figure of the notary.
Contracts made on the blockchain are automatically authorized thanks to the miners. In addition, they are unalterable, avoiding bad practices, and are resolved automatically, which would eliminate, to a large extent, subsequent decisions in court.
Digital signature and identity verification
Although popularly it may not get the recognition it deserves, identity verification is one of the cornerstones of blockchain technology.
If it is possible to create a secure and robust blockchain service that allows users to be identified, the use of the blockchain will be extended to a multitude of applications: digital signatures in notaries and banks, electronic check-in in hotels and tourist apartments, voting or any type of contract can be signed from any device.
Many are the startups that are developing this technology, such as Civic or the Niuron banking consortium. Once achieved, it will be able to support many of the blockchain applications.
Logistics and Transportation
The field of commerce involves multiple agents and intermediaries: manufacturers, wholesalers, distributors, suppliers, courier companies, consumers.
The transport of merchandise between all these actors generates an enormous amount of documentation, mostly on paper. The application of digital technologies to this sector would reduce this paperwork, speed up the transport of goods, and considerably reduce costs. If this technology were the blockchain, the possibilities would multiply.
Blockchain-based applications in logistics could automate all document management, eliminating many of the intermediaries and offering information in a transparent, clear, and instantaneous way.
A blockchain logistics platform could be a collaborative agent in the sector and could put shippers in direct contact with carriers.
Food and traceability
But perhaps the utility of blockchain in the logistics and transportation sector with the most potential is traceability.
The inalterability of the blockchain provides transparency, security, and trust to the data that companies provide in terms of traceability.
For this reason, many food companies have been interested in blockchain programs that ensure the origin of their food, giving consumers more confidence.
These solutions would be, for example, a BIDI code that would show the origin and distribution of the products in a matter of seconds.
Insurance
The potential of blockchain in the insurance sector also lies in the appearance of smart contracts. In these cases, a smart contract could automatically execute a clause of the insurance contract, without the need for experts or legal problems.
In addition, due to this self-executing capacity of smart contracts, it allows solving insurance more transparently and fairly and without the need to reveal personal data or confidential information.
The potential that the insurance sector finds in the blockchain is focused on microinsurance, an area that they believe they can promote and commercialize thanks to the tools offered by the blockchain.
Human Resources
The transparency and security that the blockchain transfers could lead to a transformation of the personnel selection processes.
A platform integrated into blockchain would guarantee the veracity of the candidates’ data. For example, it would confirm the identity and authenticity of titles, certificates, and references.
Likewise, a combination of blockchain technology with Big Data tools would allow a better analysis of the candidates to identify the one that best suits the job.
Furthermore, the potential of smart contracts could be applied to other tasks in HR departments, such as modifying contracts or automating payroll payments
Voting and elections
If we consulted our politicians, they would surely ensure that it is impossible to rig some votes. And they never lie, do they?
What we can say is that a voting system on a blockchain would dispel all concerns, by providing an infinitely more secure platform.
In blockchain-based applications to manipulate a single vote, the entire blockchain would have to be modified. This would require excessive computing power. Nobody has that much computing power, not even Google or Facebook servers.
Furthermore, the use of blockchain technology could increase low voter turnout. Some of the voters do not go to the polls due to having to identify and align themselves with a party or simply due to laziness.
With future blockchain applications, voters can transfer their votes online and remain anonymous.
Health and sanitation
The healthcare sector is also not shy of innovative blockchain applications. Currently, many technology companies are developing blockchain services for the healthcare sector. However, few well-known companies are employing these practical uses of the blockchain.
Some of the potential uses of blockchain in healthcare are:
- A check on the medical history of patients. The data could be shared between several medical centers, in a decentralized way and with immediacy and security.
- Confidentiality for the patient. Provided by blockchain encryption and security.
- Traceability and control of medicines. By integrating the blockchain in pharmacies, doctors would have absolute knowledge of drug consumption.
- Avoid fraud in medical policies and control bad practices in health services.
Education
Currently, blockchain technology applied to education is still in the experimental phase. However, numerous studies, such as the one carried out by the European Commission, highlight that blockchain can transform the education sector.
Some of the innovative applications of the blockchain applied to education are:
- Creation of document sharing platforms with permissions, encryption, and systems to prevent theft and fraud.
- Issuance of certificates and official documents.
- Greater protection of intellectual property.
Marketing
- Future applications of blockchain in marketing can seriously influence current SEO and SEM. That is to say, in the way that companies advertise their producers through the internet.
- Today, these services are concentrated in three major players: Google, Facebook, and Twitter. In other words, it is centralized.
- A decentralized platform could put the media in direct contact with advertisers and thus eliminate these intermediaries. The security and transparency of the blockchain would transfer more trust to said platform since its conditions would remain unchanged in smart contracts.
- In addition, the guarantee and immediacy offered by cryptocurrency transactions could be applied to online commerce, also transmitting trust and reaching a wider audience.
