Over the last few years, we’ve seen blockchain go from a new idea or concept, to being seriously investigated as a useful tool to solve business problems, to now, being implemented within technical environments. Nearly every industry and sector is now looking at blockchain to solve or augment a variety of use cases.
So, with that in mind, let’s discuss the uses of blockchain.
Types and Uses of Blockchain
It’s important to keep in mind that all blockchains are not the same. There are public blockchains like the bitcoin blockchain, private blockchains like hyperledger and IBM’s Corda, and hybrid public/private blockchains like ULedger. Public blockchains create a trustless environment but tend to have scalability bottlenecks. Private blockchains are more scalable but create issues where you have to trust those that control the private blockchain. ULedger has created a way to mitigate both issues with our public/private hybrid blockchain, but all types of blockchains are appropriate for certain use cases.
Because there are so many uses for this technology, we’d like to focus on blockchain for merchants/retailers, financial services, regulatory compliance and fraud prevention.
Blockchain offers a number of benefits for merchants and retailers. Let’s start with transparency. More and more consumers are demanding transparency. Using blockchain, merchants and retailers can trace the history, origin and authenticity of products. Imagine being able to ensure that the Gucci purse you bought is authentic, are able to trace your coffee to a responsible farmed and produced supplier, or even trace your seafood’s journey from the ocean to your plate. For the merchant, imagine having a clear picture of where your products are in the supply chain and who has custody of goods at any point in time. Blockchain offers a timely and reliable audit trail of goods. Another compelling example is using blockchain for loyalty and reward programs. This technology adds transparency and traceability of reward transactions. This will help retailers create a more captivating loyalty and rewards program that aids in performance management and enhances engagement through real time reward updates and availability to use for consumers.
Financial services is an area that has spent a lot of time and money investigating and implementing blockchain. The technology could completely revolutionize this space. Blockchain adds the ability to enter into “smart contracts”, which can execute transactions and agreements automatically in near real time. Take, for example, cross-border payments. The transfer of value has always been an expensive and slow process. This is particularly true for cross-border payments. Blockchain can reduce associated costs by cutting out middlemen through the use of smart contracts and speed up and simplify transactions. Even simple financial contracts can be simplified through the use of smart contracts. Not only is the contract executed through a mathematical, dependable smart contract, there will be a permanent trail of the life of the contract, meaning there will be less disputes about contract execution.
Regulatory compliance is another exciting use of blockchain. Since the financial crisis in 2008, the regulatory oversight has consumed resources and increased spending on compliance creating challenges for all industries. Entities using blockchain to underpin their data provides regulators with a mathematical trail of data, contracts, transactions and any other digital transaction. Because the blockchain is unalterable, regulators can rely on the integrity of the data in question. One simple example is that of email. Some regulations require that emails be saved and stored for a certain amount of time. Underpinning your email platform with blockchain provides regulators, attorneys, or any other third party a way to see exactly what occurred within an email platform, knowing that he emails have not been deleted or altered. In fact, if someone tried to delete or alter the emails, there would be a permanent audit trail of those attempts!
Cyber-Attack Prevention & Detection:
Hackers are extremely sophisticated and will continue to get more sophisticated. Not only can they penetrate firewalls and other barriers, but they have learned to cover their tracks after they are gone. For example, most entities use data logs to track and record what happens to their data. These logs are typically a good way to see what happened during a cyber-attack. However, bad actors have learned to access these logs and cover their tracks, making it very hard for entities to discover that an attack even occurred. This actually happened when millions of Social Security numbers were hacked several years ago. Blockchain can prevent this. By augmenting a logging system with blockchain, not only can hackers not cover up their tracks, but just by trying to do so could trigger an alert resulting in timely detection of a hack.
This blog post is just touching the very tip of the iceberg when it comes to looking at blockchain use cases. This technology will revolutionize nearly every aspect of how we interact with data. This is a space that is quickly evolving and maturing and ULedger is on the bleeding edge of these technologies!