- Few of the major use cases of blockchain
- Responses of sovereign governments to blockchain and cryptocurrencies
- The future of blockchain
Blockchain changing the way business is done
The major categories of applications of the blockchain technology and its advantages were summarized in the previous blog on the topic. However, the true potential of this disruptive technology can be understood only by examining the usage of this technology and its adoption up till now. AXA developing smart contracts on blockchain technology for flight delay and cancellation, which would compensate the affected travellers in real time is a perfect example and was indicated in the prior blog. This would lead to a higher customer satisfaction. Although, all the use cases cannot be recapitulated, the adoption of the technology in few of the prominent cases are stated below:
- Growing acceptance of Blockchain-based cryptocurrencies
- Cryptocurrencies have seen a growing acceptance among merchants in the past few years. The most prominent firms, which support cryptocurrency payments include Microsoft (games, movies, and apps in the Windows and Xbox stores), Expedia, Virgin Galactic, Okcupid, Zynga, Reddit, etc. Presently, a maximum number of these only accept Bitcoin. Additionally, there are a lot of country stores, restaurants and bars which accept certain cryptocurrencies. For instance, a subway franchise in the USA started accepting cryptocurrencies with permission from the Subway corporate. Likewise, Pembury Tavern in London and chain of Oneshot Hotels in Spain are also in the expanding list of merchants accepting such modes of payment. A growing acceptance among users has led to a boom in the value of cryptocurrencies over a period. Hence, several cryptocurrencies and tokens have grown by 200% to 3,000% (in their value) between 2013-17.
Few nations are extending their support to cryptocurrencies
Most of the countries are monitoring and contemplating their stance on cryptocurrencies. Moreover, there have been instances where countries like China, Indonesia and Russia have shown their discomfort with cryptocurrencies. However, after the ban of ICOs in China, the nation announced its support for; Neo (a cryptocurrency) based blockchain. Japan pronounced the acceptance of Bitcoin as a legal tender. There are stores mushrooming in the country, which accept the cryptocurrency. Similarly, Taiwan declared its support. Swedish Enforcement Authority accepted cryptocurrencies for the settlement of debt.
The administration in a nation control the economy through its authority on fiat currencies, this is backed by the government. Thus, concerns were expressed over cryptocurrencies by few countries like China as this pose a direct threat to the authority of the government. China is supporting Neo as a valid currency, which is probably due its control on the cryptocurrency rather than controlling the impact of several cryptocurrencies. Similarly, Russia announced its plans to launch its version of cryptocurrency.
- Governments are accepting the technology, although maintaining controlled decentralization
Many nations have reservations over the use of cryptocurrency. Their concerns emanate from the decentralized blockchain, which falls outside the purview of government authority. However, there is an increasing acceptance among nations on the benefits of blockchain technology. Thus, countries sought a way to reap the advantages of blockchain through controlled decentralization. Further, since the blockchain technology is flexible with codes modifiable to suit a purpose, hence, governments are exploring ways to employ the technology in various use cases.
Land use registrations
Many countries like Ukraine, Sweden, the United Kingdom and regions such as Andhra Pradesh (a state in India) are testing the blockchain technology to track land registrations for the future. Thus, all the records will be moved onto a blockchain with distributed ledgers, so as to avoid contradictions emanating from errors in centralized record keeping. Dubai has already implemented the technology and moved a step further by linking it to property related bills like electricity, water and taxes. This system would connect Dubai land authority, property buyers, tenants and sellers, banks and other utility authorities. Certain colored coins (cryptocurrency) representing a type of asset (financial such as loans, other assets such as real estate) would be used for operations. These would eradicate the possibility of a dubious data, false claims and corruption, in addition to significantly reducing the time in transfer of ownership. This kind of blockchain would be a controlled decentralization as the nodes which would vet the records will be limited and decided by the authority.
Digital ID cards and medical health records
Estonia is in the process of issuing blockchain-based digital ID cards for which the controlled access would be available for various public services institutions. The access to records for these nodes (public institutions, banks, etc.) would be controlled by the citizens holding the IDs based on their requirement.
Furthermore, medical records have been digitized and put on a blockchain in Estonia. Citizens can access the blockchain for medical records through their digitized IDs. The medical history on a blockchain can be checked by users, who can trace other nodes (healthcare professionals), which have accessed user’s records. This systems of blockchains will result in removal of fraudulent access and usage of public data.
- Europe’s largest shipping ports and biggest shipping companies plan to use blockchain
The movement of goods from a point to another involves several parties like carriers, terminals, forwarders, haulers, etc. A large port such as Antwerp and Rotterdam initiated pilot projects to connect these parties on a blockchain, where the movement would be recorded and will be based on a consensus and thus, result in better tracking of goods. This would abolish the risk of data manipulation and save from complexity of tonnes of paperwork, phone, fax and email. A shipping firm like Maersk and Damco are also in the list of companies, which are testing the blockchain in their supply chain.
There has been a growing and widespread acceptance of blockchain technology. Entrepreneurs have found its applicability in each and every industry and there are innumerable uses of this technology.
Blockchain is here to stay
In conclusion, blockchain-based startups have raised a huge amount of capital with their proposed solutions. Few of these use cases are already in operations across various industries, but many of these are still under development, which implies that the adoption of the technology is still in its nascent stage.
The below chart summarizes the industry and classifies the money raised in ICOs during 2016-17.
In the above table, the major industries have been highlighted, which are either an integral part of an economy or raised major funds in ICOs.
The blockchain is pushing the world into a shared economy, where the businesses would need less capital investment as the technological resources will be pooled. Cryptocurrencies saw an increasing interest from investors and adoption from the merchants, renowned companies and in certain instances, national governments as well. In addition, Ripple would be the use case where even banks have been empanelled, which could eventually use cryptocurrency for money transfer and settlements.
There remains a high risk for numerous start-ups failing to apply the idea in their white paper in practice. There will be many start-ups that will prove out to be dubious, which would be floated to fleece money from investors. However, the advantages of this technology outweigh the disadvantages. The most prominent feature; decentralization of records and security of records will provide the next level of confidence to investors and users as there will be:
- No central authority, which could potentially manipulate the data
- No central location, which can be hacked
- Access for everyone for same and real-time data
The technology is often compared with the dotcom bubble by the critics, blockchain could face rocky terrain if few of the start-ups fail. However, winners would disrupt the way business is done and establish new standards across industries.