Blockchain first of all supports those areas of the market where security and transparency play a key role. This is because it is a distributed database, decentralized, without regulations that are a bottleneck. It works well wherever it is necessary to share resources and build an environment of complete trust.
What is important here is the use of the concept of trustlessness as a distinctive feature of blockchain, smart contracts and cryptocurrencies. Trustless simply means that there is no need to trust a third party of the transaction, i.e. intermediaries or resource management institutions. Everything on blockchain can be verified.
To better understand how the technology works, imagine that all the data is stored as a chain of blocks. Every so often a block is created and joined to the previous blocks. We have a chain loaded with data. In this structure, any interference is visible, and an unauthorized action breaks this sequence. Each block has its own ID which is created based on the ID of the previous block and the data of the current one. If any data is attempted to be changed, the id will change, making it easy to detect this manipulation. The security and transparency of the network are guaranteed by a smart contract, a certain kind of rule that applies to the transaction sides.
For more details on how blockchain works, see our text: An introduction to blockchain
Features of blockchain technology:
- Distributed ledger
- Decentralized technology
- Enhanced security
- Immutable and unanimous
Business is going for secure and transparent solutions based on blockchain
Although the technology is most closely identified with bitcoin, it has much more potential business uses already eagerly explored. There are also many concepts that will be reached in the near future, however, it is already worth noting that there is a technology that opens up new capabilities and can bring about revolutionary changes. Below we have gathered some examples of uses in finance, business and other industries.
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Blockchain and international payments
The decentralized solution already supports the development of a secure and efficient tamper-proof log of sensitive activities. International payments and money transfers can take place much more safely with blockchain.
In 2018, Santander launched the world’s first money transfer service based on this technology. Known as “Santander One Pay FX,” the service uses Ripple’s xCurrent to allow customers to make same-day or next-day international money transfers.
The bank has automated the process and reduced the number of intermediaries in the transactions, This makes the process not only more transparent but also efficient. The blockchain can also reduce transaction costs by simplifying the steps: manual settlement of transactions is no longer necessary.
Meanwhile, on the other hand, there is more and more talk about a new payment model, and retailers already provide the option to pay with cryptocurrencies. Deloitte surveyed the industry’s commitment to this novelty, and it turns out that as many as 75% of companies want to expand payments to include cryptocurrencies in the next two years. Read more about it here.
Supply chain management and blockchain
The immutable blockchain ledger makes it possible to track freight in shipping in real time. As a result, it can seal even a long and complicated supply chain. Particular incidents saved on the blockchain are visible, carried out in concrete order and transparent. Blockchain gives transparency to the supply chain, reduces costs and risks.
Benefits of using blockchain in modern transportation organizations:
- Increase tracking of the supply chain of goods according to standards
- Reduce the losses caused by fake trade and identify theft
- Improve transportation visibility in the manufacturing industry for outsourced orders
- Reduce paperwork and administrative costs
Changes in terms and conditions and data security in e-commerce using blockchain
Poland’s largest e-commerce platform has announced the implementation of a new service: persistent data carrier. It is a solution based on blockchain, and WORM (Write Once, Read Many). Allegro has created this solution to communicate news and changes implemented in the terms and conditions for using the platform and storing new releases.
The immutability of saved files is guaranteed by WORM, and this is the value of the solution. As blockchain is used to store hashes. Each hash has a unique identifier of the saved document, allowing it to verify the file’s authenticity and integrity. Thanks to the solution, users of the platform will have access to all changes made in each future version of the regulations.
How is blockchain being used in real estate?
Blockchain is increasingly being used in real estate transactions. In fact, that’s because it’s a secure, decentralized way to register and transfer assets. The solutions are numerous, and one of them is to simplify the process of buying and selling real estate. Smart contracts can automate transactions and signings. Another use is as a secure way to register property ownership. Blockchain offers a tamper-proof way to keep this information. This can help in reducing cases of real estate fraud and extortion.
The technology can also improve property management. Blockchain makes it easier to share data safely, streamline the payment of rents and other fees to the landlord. Solutions based on this technology are growing in popularity and can transform the industry’s operations by cutting operating costs, increasing the efficiency of operations and reducing the risks that come with operating such a large amount of data. The system can contain contracts, legal deeds, as well as all necessary information, such as the legal status of the building.
Digital fundraising, meaning cryptocurrencies support nonprofit foundations
Charity organizations are keen to accept payments in a safe, transparent and global way without the need to pay exchange fees. Therefore, blockchain can be used here as well. This is where we get into the topic of cryptocurrencies already. They can serve precisely as a good tool for supporting such organizations.
Among the charity sector’s initiatives in this regard was Crypto Giving Tuesday, which promotes donations using Blockchain via Bitcoin. The Giving Block platform has become a solution dedicated to NGOs seeking donations in cryptocurrencies. The solution formed a team with experience in financial management, cryptocurrencies and non-profit fundraising and operations has created a platform to connect donors and foundations ready to use cryptocurrencies.
Blockchain is moving slowly from being controversial to a technology dedicated directly to business development. By its features, it has already proven itself in the financial industry and is now expected to conquer more. The examples mentioned above are actually just the beginning. Technology can support many more industries. It can be used in the healthcare industry, to support government applications, or to secure artwork. In other words, wherever it is necessary to secure data and ensure the authenticity of the service and instant user verification. At ValueLogic, we are constantly looking for new business applications of blockchain, so look out for the next article on the benefits you will gain if you bet on this technology.
