Those who see a strong future for cryptocurrency point to the numerous applications of blockchain technology in the real world. The potential for blockchain tech to disrupt dozens of industries, and the fact that it has already begun doing so, means that blockchain is here to stay. Since blockchain and crypto go hand in hand, it makes logical sense that these real-world blockchain use cases also show that cryptocurrency and the related tech is not going anywhere.
The following are just a handful of the real-world blockchain use cases that we can expect to see in the future, along with some that are already undergoing implementation.
Cryptocurrencies that you can spend on items, such as Bitcoin, are far from the only tokens that can make use of blockchain tech to change the world. Many see potential in the use of the blockchain for asset tokenization. The unique thing about tokens on the blockchain is that they do not need to be fungible. Fungibility refers to the fact that all of a single token is worth the same. For example, if you swap a dollar bill with a stranger, you each have the same amount of money you started with.
By using non-fungible tokens, it becomes possible to tokenize assets that were not previously liquid. With the right setup, we can even do this with fungible tokens, although the focus for this particular use tends to be on non-fungible ones. The idea is that liquidity of certain types of assets suddenly becomes possible via tokenization, even in the case of assets that are highly non-liquid.
Two of the most common examples of asset tokenization would be with real estate or art. If you were to tokenize these assets, it suddenly becomes easy to trade them with others. It also becomes simple to divide them up so people can share ownership of the asset in question. This not only improves the liquidity of assets but also allows for freer trade and allows for greater diversification of portfolios.
Many organizations around the world look forward to the use of blockchain technology in the form of digital identity. At the moment, most jurisdictions in the world have their own variations of official identification, resulting in a lack of uniformity except for passports. Furthermore, it is common for certain demographics to face additional challenges in obtaining official identification. There are also problems associated with losing identification, particularly in the case of refugees or migrants who are forced to flee and do not have time to grab the relevant documents.
Blockchain technology has the potential to resolve all these issues while putting each individual in charge of their own identification. Potentially, we could use a single key to identify ourselves for everything, from voting to traveling to banking. This key would be checked against the immutable ledger to verify it, a quick process.
The digital identification could also include more than just the most basic information. It could also have information like social security, social media credentials, or medical records built in. Best of all, each individual would have full ownership of their digital identity, including the ability to choose if and when to share it. The information would remain securely stored on the blockchain otherwise.
While everyone can benefit from the digital identity use case of blockchain, certain groups have even more to gain. These are the groups that traditionally find it hard to get official identification. Those who are homeless, for example, would no longer have to worry about proving address to gain an ID or keeping track of an identification when they do not have a secure place to stay. Refugees would not have to worry about leaving behind their crucial records and documentation.
Voting is yet another application of blockchain tech that builds on the ability to create secure, immutable digital identities. Blockchain technology can help create a system for electronic voting that ensures anonymity while still allowing for auditing. Tampering of records is not possible with the blockchain technology. Furthermore, the ability to vote from a range of devices securely, including mobile phones, could increase voter participation.
Zug, Switzerland has already begun piloting both digital IDs and e-voting. This was on a smaller scale but went well. West Virginia and Estonia are also working towards electronic voting via the blockchain.
Building on the idea of digital identity, the potential use cases for blockchain tech in healthcare are also significant. At the moment, data regarding patients sit in multiple locations, stored in various formats and with no way to easily share the information with a new doctor. The blockchain would make it possible to securely store these medical records in a single spot that new healthcare providers could access. This would cut down on paperwork when visiting a new doctor and reduce the risk of mistakes during patient onboarding.
It would also put patients in complete control of their medical history. The only people who would have access to the relevant medical data would be those who the patient allows to access it. There is also the added benefit of encryption for patient data and an audit trail that proves the information provided is correct.
Other Healthcare Applications
You can even extend the use of blockchain tech to other applications within healthcare. For example, it would be possible to provide incentives via tokens for patients who follow care plans to meet their goals. Or they can receive tokens for participating in clinical trials, or for sharing data with research. The blockchain could also be used to minimize insurance fraud for the blockchain. It could do so by confirming information regarding claims via the immutable, auditable ledger.
Supply Chain Management
Another area in which blockchain technology has the potential for true disruption is supply chain management. At the moment, supply chains suffer from a lack of transparency, but the blockchain can overcome this. With the use of the blockchain, multiple people can access the same blockchain, letting them see exactly where and when a particular material or item was.
This transparency via the blockchain makes it easier to audit supply chains, both for efficiency and for accurate reporting of transactions. The transparency also increases confidence in the products for retailers and consumers, since they know it is not counterfeit. In the case of sensitive items like medications, the blockchain’s transparency can also provide reassurance that the item remained within the proper temperature range.
The Energy Market
Those who are in search of a more environmentally friendly future see the blockchain as a way to do this. Even traditional energy-production methods can benefit from the blockchain by decentralizing the energy market. At the moment, a few big companies tend to control the market, but with the blockchain, that control could go back to the people.
We can use blockchain tech to use smart meters to see how much energy a person with solar panels generates. The person who produces that solar energy could then trade it, with settling right on the ledger. Essentially, blockchain tech makes it possible for people to buy and sell energy just like they do many other commodities. This lack of centralization would also eliminate the ability of a few companies to raise the prices artificially.
When it comes to banking and financial services, blockchain has the potential to disrupt the current system while also providing access to the millions of people around the world who are currently unbanked. At the moment, the infrastructure for banking is slow and expensive, especially in the case of international transactions. There is also a heavy reliance on intermediaries, which further slows down the process while adding to the cost and putting privacy at risk.
Banking done via the blockchain can resolve these issues. Privacy comes from the security of the blockchain’s distributed ledger. Since the blockchain can handle everything, including peer-to-peer transactions, there is no longer a need for intermediaries. This results in quicker transactions that cost less and do not have international fees. Blockchain tech is particularly useful in the case of cross-border transactions, where the systems have not changed since the 1970s. In this case, financial institutions in different countries can directly connect with each other with full transparency.
Blockchain technology also stands to make auditing and accounting much easier by recording all the transactions in a way that is immutable. The information in the blockchain includes relevant information, like time and quantity, and is easily accessible. In terms of auditing of a compliant or regulatory nature, the full transparency of the blockchain makes it much easier for regulatory bodies to ensure financial institutions, companies, and individuals report information accurately.
Smart contracts are a key part of blockchain technology as they are built into it. These contracts execute automatically based on if-then statements and have far-reaching applications. When you use a smart contract, there is no need to involve an unbiased intermediary as the smart contract serves this role. That lack of an intermediary can reduce cost and time while also improving trust since smart contracts are fair, provided their coding is fair. Smart contracts also deliver transparency by letting the participants view the details of it at any point.
We can theoretically use smart contracts in any situation where a legal contract would traditionally be used, particularly in cases with if-then contracts. Just some applications include crowdfunding agreements, property law, insurance premiums, and financial derivatives.
Government and Public Sector Applications
Government bodies can also make use of blockchain technology, whether they use the other applications mentioned or use the blockchain in a different way. The distributed ledger technology improves the efficiency of modern-day paperwork while also providing transparency. Governments can use the blockchain to enhance the speed and transparency with which they deliver services. Or they can use it to minimize tax fraud, reduce waste, and streamline transactions.
Thanks to the transparency associated with the blockchain, citizens of governments who use this tech will experience peace of mind since they can check the government’s actions. The transparency and immutability of the distributed ledger system also eliminate corruption, by making it nearly impossible to engage in things like falsification of data, identity theft, and tax fraud. This can be particularly useful in developing countries or other areas where corruption is rampant.
The Internet of Things
The Internet of Things (IoT) is growing rapidly with more and more connected devices from Smart TVs to smart fridges to voice-activated home assistants like Amazon Alexa. Blockchain’s role in the Internet of Things will involve streamlining processes and avoiding things like centralized bottlenecks. Traditionally, an IoT system uses centralized architecture, but those systems have extremely limited scalability. They also pose risks in terms of network security.
By incorporating blockchain tech, including smart contracts, the IoT devices can function both autonomously and securely. This results in improved scalability, automation, and even more affordable transfers. At the same time, the smart contracts protect the devices from potential overrides by unscrupulous individuals looking for data. Using blockchain as the basis for the IoT can provide decentralization and security via cryptography. Blockchain-enabled IoT systems already exist, and more companies are creating them.
The blockchain can also transform the rights of musicians, providing transparency and preventing theft. The music industry currently suffers from ownership clarity, issues with royalty distributions, and transparency. The sharing of online music hurts musicians as they cannot track their music’s distribution or collect profits on their creative work. Worse yet, many of the music files shared lack basic information like the artist’s name or the producer’s.
Blockchain technology can step in to create a comprehensive decentralized database with music rights that uses smart contracts. This would facilitate royalty distribution for everyone involved, including producers, cowriters, artists, and more. This particularly application applies to anything creative with royalties, including music, movies, videos, images, books, and more.
The above use cases are only some of the many applications of blockchain technology. With so many implementations already in place and more on the way, it seems clear that blockchain tech is here to stay, and crypto along with it.