Looking through specialized blogs or digital newspapers, there’s plenty of references to blockchain and what it is all about: a technology originally developed to make the bitcoin possible, now expected to become the so-called “fourth industrial revolution” and a new path for business management.
Blockchain is a way to encrypt information, a somehow abstract computer-based concept entailing basically, for practical purposes, security, veracity and disintermediation. When we provide personal information on the Internet, shop online, perform banking operations or take out insurance, for example, the issue between the parties involved is trust. That is why there’s always an intermediary in order to validate those data: a digital signature, a bank, platforms such as PayPal… This is centralized information that must be authenticated by a third party.
That is the key factor regarding Blockchain: its encryption system and its operability is distributed. It’s a database or a ledger which every party involved holds a record of. And its leitmotiv is consensus. Should every node in the network validate a piece of information, there’s no need for confirmation on the part of an intermediary.
In this article and this infographic we established some time ago which were the main agents in a blockchain network but, beyond the functional part and its encoding system, do we know how is blockchain technology going to be applied to everyday life situations? When companies begin to develop software programming based on this technology and adapt their services to this new paradigm, what shall we expect?
Blockchain applications and their impact on multiple industries
As a starting point, it is worth saying that Blockchain allows any value that can be expressed digitally to be virtually registered: birth certificates, property deeds, votes, financial accounts, etc. All in the quickest, most secure and most transparent way possible.
It began as a monetary application, but as further systems based on blockchain are developed, it will entail a big leap forward socially speaking. Here are some examples:
Blockchain in banking
– The world of banking is on the verge of undertaking a dramatic shift regarding some services such as international transfers or transaction settlements thanks to blockchain technology. Currently, in order to send money from, let’s say, Spain to the USA, there are payment providers which work with a messaging standard between Banks providing authenticity to that transaction. Said transaction can be delayed between two and four days.
With blockchain’s secure, encrypted and network-validated consensus technology, these payments could become immediate and intermediary-free.
Blockchain for the insurance industry
– Insurance industry could rework a great deal of its business strategy thanks to blockchain and the possibility of utilizing Smart Contracts: in a nutshell, a contract capable of self-executing without any intervention on the part of intermediaries. Thanks to Smart Contracts, insurance companies could perform their duty “ex officio”, so to speak, in the event of any incident. If a passenger, for instance, contracts cancellation insurance along with his plane ticket and misses the flight eventually, he will be reimbursed the amount agreed in said contract promptly because there’s a Smart Contract involved. These systems reduce costs, speed up the procedure and create a truly satisfactory user experience.
Another example is car insurance. Let’s imagine that a driver wants to take insurance on his vehicle; thanks to blockchain technology, he could send across his claim record anonymously. Moreover, if his vehicle was connected (enter the Internet of Things), he could send a report about his driving habits. Once the information is analyzed, the insurance company could send him a customized Smart Contract, with coverage and cost completely personalized. The driver would give ownership proof, make the payment and receive the corresponding certificate. All thanks to the authentication network, encrypting, security and transparency offered by blockchain.
The very same notion could be applied to other sectors such as telephone operators, car rental businesses and many other services.
Blockchain to power the energy industry
– It is expected that blockchain technology becomes the best partner for energy industry, since it could make point-to-point power purchase agreement possible, as some reports regarding initiatives in the Netherlands or the UK suggest. The so-called Virtual Power Plant system, which turns energy consumers into producers, would be greatly benefited.
The UK-based company Electron is seeking, precisely, to enhance renewable energy industry through blockchain in order to make it more efficient.
Blockchain, an ally for NGOs
– Blockchain technology could entail an innovative, more secure and transparent way to make donations. Donors could be able to trace their contributions and be informed about their allocation. And it would be a way more just procedure, since no intermediaries would be involved in the process. All in an anonymous and righteous fashion.
For some time now, organizations such as Save the Children or Wikileaks have been accepting crypto-coins as a funding method, and the future of blockchain in this sector seems very promising.
Blockchain, a tool for public services
– Public entities have also a great opportunity to go digital with the development of blockchain-based systems, since they’re still unable to provide integral response to the demands of today’s society. Some countries are already delving into this technology regarding property deed and vehicle registration, licences, subsidies, health registration… Electronic voting is also waiting for its chance to be viable thanks to the reliability of blockchain, since it could be an achievement capable of saving much time to citizens and money to the administration.
These are some examples of blockchain technology applications, but one thing is clear: any industry using centralized databases fed by diverse sources will be potentially benefitting from the improvements made through this fourth industrial revolution. We’ll stay tuned.