Industries including finance, logistics, healthcare and legal services are set to be disrupted by the adoption of distributed ledger and Blockchain technology.
The Blockchain of Things
The evolution of blockchain promises to set in motion a transformative revolution of established and emerging industries, particularly the financial, logistical, healthcare and legal industries. Most of those familiar with this emerging technology associate blockchain with bitcoin and related cryptocurrency; however, cryptocurrencies are only a small part of the emerging technology.
Since its creation by the pseudonymous Satoshi Nakamoto in the infamous white paper dubbed Bitcoin: A Peer-to-Peer Electronic Cash System, people have come to understand the potential of blockchain.
A blockchain is an open-source ledger that records and tracks assets (e.g. bonds) without the need of a trusted third-party intermediaries (e.g. banks). This is known as distributed ledger technology. A distributed ledger is a record of transactions simultaneously kept across different locations and people, removing the need for a single authority to track changes. While blockchain is a type of distributed ledger technology, not every distributed ledger is a blockchain. The decentralized architecture of blockchain underlies a secure and “trustless trust,” built on a distributed system, which has the potential to remodel the future economy.
This technology has the potential to transform interactions across a variety of industries. Don Tapscott, executive chairman of the Blockchain Research Institute, highlighted blockchain as the second era of the Internet, when anything of value can be stored, managed, and transacted around the world. Blockchain’s appearance of complexity stands in contrast of its conceptual simplicity. The first major application of the blockchain was Bitcoin. Bitcoin is used by millions of people for payments, specifically growing in the remittances market sector. Yet, Bitcoin is just one application for this technology.
“Moving from the Internet of information to Internet of value.”Don Tapscott
A number of financial institutions are exploring how to use blockchain to mitigate the rising risk of cyberattacks because of the cryptic and distributed nature of the technology. For example, Bank of America Merrill Lynch and Microsoft partnered on a project using blockchain technology to update data in real-time while maintaining a safe and secure service. This use of blockchain technology allows businesses to make financial transactions faster, cheaper, safer, more transparent and reduce the effects of data breaches.
“More than 50 percent of the volume of the containers of the world shipping industry will be on a blockchain.”Bridget Van Kralingen, Senior VP of Blockchain at IBM
The logistics industry is an integral part of the global economy. The industry has a complex network of businesses, systems, services and stakeholders all around the world. The dynamic nature of the industry impacts everything from national Gross Domestic Product (GDP) to commodity pricing. However, the industry has suffered from several problems, which vary from lack of efficiency to high levels of fraud as global trade grows. Many of the processes for transporting and trading goods are costly, in part, due to manual and paper-based systems. Traditional methods are often unreliable and difficult to control due to the numerous parties involved. For example, a typical shipment can leverage more than 200 interactions and 25 stakeholders, slowing down transactions and impacting the growth of the global economy.
IBM, in collaboration with logistics conglomerate MAERSK, introduced blockchain platform TradeLens that allows businesses and authorities in the supply chain industry to interact with a single, secure source of shipping data, enabling more efficient global trade. Already more than half of the world’s container shipping industry is utilizing this technology. By adopting blockchain into standard operations, the global supply chain industry will transform to a more efficient, transparent and secure industry.
“Blockchain technology can elevate care excellence and emphasize the participation of owning one’s health and data.”Tory Cenai, founder and publisher of Blockchain in Healthcare Today
The current fragmented state of healthcare record-keeping has long been an issue in the industry due to the lack of a uniform structure, frustrating patients over the lack of control over their own records. In the face of the unsettled future of medical records, the healthcare industry could benefit from adopting blockchain technology. Blockchain addresses the issue by providing a coherent distributed ledger. A blockchain-enabled patient record database would integrate health records and reduce transaction costs due to disintermediation, allowing a peer-to-peer transaction. Additionally, it would enable real-time data sharing across all parties while managing consent and confidentiality.
Aetna, in cooperation with Anthem, Health Care Service Corporation, PNC Bank and IBM, announced a new collaboration to design and create a network using blockchain technology to improve the healthcare industry. The network will be set to reduce administrative and financial friction, enhancing the patient’s experience. The goal of the technology is to enable healthcare companies to build, share and deploy solutions that drive digital transformation in the industry.
The immutability of blockchain is a gamechanger for the fundamental way law works.”Charley Moore, CEO of Rocket Lawyer
4. Legal Services
The legal industry is becoming heavily invested in blockchain technology because of its ability to hold and secure data in a large capacity. A blockchain can hold any legal document, from deeds and marriage licenses to educational degrees and birth certificates.
In addition, blockchain technology transforms the way the industry understands contracts. With the rising cost of legal service, individual contracting parties are turning to smart contracts instead. These autonomous, decentralized and auto-sufficient digital contracts use blockchain to eliminate the need for intermediaries. Rocket Lawyer is one of the most recognized names in utilizing smart contract services. Operating on the Ethereum blockchain, Rocket Lawyer allows stakeholders to create, edit and verify contracts, ensuring a “trustless trust” between all parties.
Despite blockchain being a relatively new technology with the potential to significantly transform established and emerging industries, significant obstacles stand in the way of wide-spread adoption. Debates around regulation, policy and knowledge hinder the development of the technology. Yet, as blockchain connects with various industries, the fate of the technology is optimistic. Organizations in all industry sectors will face complex and potentially controversial issues while embracing the technology. While still at its early stages and evolving, the technology is putting in motion a transformative revolution, remodeling tomorrow’s business structure.