In a previous blog, we have talked about the application of blockchain in supply chains specifically. Today we take a look across how the implementation of blockchain could disrupt a diverse array of sectors ranging from supply chains, financial services, healthcare, government and many other industries. Modern innovators are exploring ways to use blockchain to disrupt and transform traditional business models. Many industry leaders have already achieved significant business benefits, including greater transparency, enhanced security, improved traceability, increased efficiency and speed of transactions, and reduced costs.
1. Greater transparency
Transaction histories are becoming more transparent through the use of blockchain technology. Because blockchain is a type of distributed ledger, all network participants share the same documentation as opposed to individual copies. That shared version can only be updated through consensus, which means everyone must agree on it. To change a single transaction record would require the alteration of all subsequent records and the collusion of the entire network. Thus, data on a blockchain is more accurate, consistent and transparent than when it is pushed through paper-heavy processes. It is also available to all participants who have permissioned access. To change a single transaction record would require the alteration of all subsequent records and the collusion of the entire network. Which can be, you know, a headache.
2. Enhanced security
There are several ways blockchain is more secure than other record-keeping systems. Transactions must be agreed upon before they are recorded. After a transaction is approved, it is encrypted and linked to the previous transaction. This, along with the fact that information is stored across a network of computers instead of on a single server, makes it very difficult for hackers to compromise the transaction data.
In any industry where protecting sensitive data is crucial — financial services, government, healthcare — blockchain has an opportunity to change how critical information is shared by helping to prevent fraud and unauthorised activity.
3. Improved traceability
If your company deals with products that are traded through a complex supply chain, you’re familiar with how hard it can be to trace an item back to its origin. When exchanges of goods are recorded on a blockchain, you end up with an audit trail that shows where an asset came from and every stop it made on its journey. This historical transaction data can help to verify the authenticity of assets and prevent fraud.
4. Increased efficiency and speed
When you use traditional, paper-heavy processes, trading anything is a time-consuming process that is prone to human error and often requires third-party mediation. By streamlining and automating these processes with blockchain, transactions can be completed faster and more efficiently. Since record-keeping is performed using a single digital ledger that is shared among participants, you don’t have to reconcile multiple ledgers, and you end up with less clutter. Also, when everyone has access to the same information, it becomes easier to trust each other without the need for numerous intermediaries. Thus, clearing and settlement can occur much quicker.
5. Reduced costs
For most businesses, reducing costs is a priority. With blockchain, you don’t need as many third parties or middlemen to make guarantees because it doesn’t matter if you can trust your trading partner. Instead, you have to trust the data on the blockchain. You also won’t have to review so much documentation to complete a trade because everyone will have permissioned access to a single, immutable version.