To some, Bitcoin is the greatest thing since kale. Whether a bubble or the next big thing, it’s clear that Bitcoin dominates the headlines, thanks to its ever-fluctuating valuation, minting millionaires on a seemingly continual basis. Until recently, speculation about Bitcoin’s legitimacy overshadowed discussions of blockchain technology, the foundation upon which Bitcoin and other cryptocurrencies are built. However, innovators across a broad range of industries have begun to see blockchain’s potential, and the versatile technology is emerging from the cryptocurrency shadows once and for all.
What is a blockchain?
Before we dive into some of the ways blockchain technology is being applied to data security, poverty reduction, smart energy, and more, we need to properly define it. A blockchain is essentially a digital record of transactions that anyone can access, like an open ledger. And, with this openness comes transparency as everyone looking at the ledger sees the same information. Every transaction recorded in the ledger (also known as a “block”) is cryptographically validated and therefore immutable once recorded. Additionally, new transactions are only recorded in the blockchain after all of the computers on the network verify accuracy and authenticity of such transactions. The cryptographic nature of a blockchain prevents any single party from altering past records and it’s very difficult to hack, hence its use in cybersecurity defenses.
In short, blockchain holds widespread appeal because of its decentralized, encrypted, and auditable nature. These attributes make it extremely applicable to efforts that secure data, streamline information systems, and improve public and private services. With the recent popularization of non-fungible tokens, or NFTs, blockchain technology is seeing an even more widespread appeal in proving ownership and authenticity of digital assets such as files or physical assets including homes and vehicles.
Blockchain in action
From identity protection to traceability, here are 8 examples of blockchain at work:
- Personal identity protection. The inherent properties of blockchain technology make it an excellent candidate for enabling authentic, ownable, verifiable, and auditable digital identities for individuals, corporations, smart devices, digital agents, and more across the internet or even the emerging metaverse. For example, the idea of an SSI, a self-sovereign identity, is something that experts believe may bring a greater level of democratization and equality to the Internet. Be it individual or enterprise use, SSIs can utilize the same underlying blockchain technology that powers cryptocurrencies and NFTs to give holders full ownership and control over their digital footprint. This removes the need for oodles of account passwords, profiles, data privacy settings, legacy directory systems, and more. SSIs may even evolve to combat risks posed by deep fakes, misinformation / disinformation, impersonation, and an ever-evolving mix of cybersecurity threats.
- Distributing diplomas. There’s something deeply satisfying about crossing a stage to receive a physical diploma that you can hang on your office wall for years to come. However, paper diplomas fade and they’re susceptible to damage and deterioration. But diplomas issued via blockchain will survive virtually forever. Blockchain isn’t just useful for saving diplomas for posterity, however. By issuing virtual degrees, schools enable graduates to submit this information to employers who may want to verify their application information or delve into their academic histories. Through use of private-public encryption keys, students would have full control over their data and would be able to decide which prospective employers should gain access.
- Establishing lineage & provenance. As the global demand for goods continues to increase, recordability and traceability throughout supply chains is fast becoming a top opportunity for tech disruption from AI, hyperautomation, and blockchain. One prominent area where blockchain can have an outsized impact is establishing lineage and provenance of products, raw materials, components, and parts as they move through the value chain. This type of blockchain implementation “assists in regulatory compliance, specific recalls, and prevents counterfeit components.” It was one of the “top use cases for blockchain technology in terms of market share worldwide [in] 2021” at just over 10%.
- Improving shipping logistics. If you’ve ever shipped a meticulously crafted care package across the country, you know that shipping costs can seem staggeringly high. Fortunately, such issues may become concerns of the past, thanks to blockchain. UPS and other members of the Blockchain in Trucking Alliance have indicated that blockchain, in combination with artificial intelligence and predictive analytics, will help shipping companies reduce costs and improve delivery times and methods. The transparent nature of blockchain infrastructures will streamline order fulfillment and help companies operate more efficiently. Using high-quality market data and blockchain-secured platforms, shipping businesses will be able to decrease errors and lower labor costs.
- Tracking farm-to-table food. Agricultural manufacturer Cargill served up a novel use of blockchain for Thanksgiving. Its Honeysuckle White brand used the technology to document and record the journey of each of its family-farm-grown turkeys. Honeysuckle White catalogued the process so that customers could trace their birds directly to the farms on which they were raised. The pilot program provides a model for how other companies can deliver on growing demands for transparency, education, and ethics in how food is grown and distributed.
- Proving asset ownership. It was only a matter of time before the foundations that powered cryptocurrencies were applied to physical goods where verification of authenticity and ownership would have tangible real world value. Enter, the NFT. By end of 2021, NFT sales in aggregate reached “approximately $1.8 billion per month.” Some NFTs have transformed into fully tradable assets. For instance, CryptoPunk 7523 (a.k.a. “Covid Alien”) which was sold by Sotheby’s for a record $11.8M. Whether for personal, professional, or enterprise use, the benefits of utilizing NFTs are becoming increasingly clear for managing the ownership, authenticity, and tradability of assets, whether digital in nature or virtual representation of physical goods such as equipment, buildings, products, and more. And, with accelerating tech investments in digital twins and metaverse as tech trends in 2022 and beyond identified by Entefy, NFTs are likely to play a growing role in the future of blockchain technology.
- Reducing voter fraud. Every election carries with it the risks of voter fraud and discrimination, and until recently, even the most well-intentioned attempts to alleviate these problems sometimes fell short. Requiring voters to show photo identification at polling stations helped reduce fraud, but it marginalized people who didn’t have qualifying IDs. Blockchain’s use to defend against voter fraud circumvents both problems by allowing voters to use data stored on their smartphones to verify their identities and vote privately and securely. Remember that encryption is a core feature of blockchain technology and that it’s very difficult to alter previously recorded transactions. By allowing people to verify their identities through their smartphones, both by using personal encryption keys and through biometric measures, governments could engage a greater number of voters and reduce the chances of fraud and ballot tampering.
- Securing medical records. There are few greater risks to your personal data security than having your medical records stolen. Yet most hospitals and medical providers are highly vulnerable to cyberattacks. Criminals who gain access to your medical data can sell it, use it to hack your bank accounts, or bill costly medical procedures to your insurance. Beyond security concerns, obtaining your medical records can be a cumbersome and frustrating process, and the lack of centralized access can lead to gaps and inefficiencies in care. Fortunately, blockchain offers a better way. In addition to providing a much more secure alternative to standard electronic record databases, blockchain affords patients more control over their information. Instead of chasing your records from provider to provider, all of your information would be stored in one secure, up-to-date location and you would have full control over what to share with different doctors.
The above use cases are only a sampling of how blockchain technology is evolving across industries. Although many companies are merely exploring ways in which blockchain can help them innovate and deliver better products and services, we can expect to see the technology increasingly take center stage—and perhaps even eclipse Bitcoin in the public conversation.