The practical uses of blockchain are not necessarily clear at such an early stage in the development of the technology. However, if we look at what major organizations, governments and the most interesting and potentially disruptive startups in the space are doing with blockchain, we can get some idea of how it will be utilised in the future.
Finance
Asset Management- Tokenization’, the ‘slicing up’ and ‘digitization’ of assets/ shares would remove a major pain point in the investment trading process, where a lot of assets are difficult to subdivide or transfer. The use of decentralized exchanges would also democratize investing by allowing two parties to trade without the need for a third party. Less administration, less cost!
Clearing and Settlement- The Australian Stock Exchange announced at the end of 2017 that it plans to use blockchain technology to manage the clearing and settlement of equities. Recent reports that the Hong Kong Stock Exchange is also looking at utilising a distributed ledger system to cut costs, shows that the implementation of blockchain in finance is being accelerated globally.
Cross-Border Transactions- About 2 billion people worldwide do not have a bank account. In many cities in developing countries Western Union has more branches than all the international banks combined. Sending remittances to a different country is a complicated and expensive task for what should be a simple transaction. Blockchain peer to peer payments could make this a frictionless process.
Identity
Social media companies like Facebook monetize our personal information by selling it to advertisers. Blockchain could provide a new GDPR compliant usage model whereby the customer permits the company to access a level of data for a limited time and limited use. In this model, you don’t need ad blocking software because you get to choose which ads you see and you get paid for it. Accenture Plc and Microsoft Corp have teamed up to build a digital ID network using blockchain technology, as part of a United Nations-supported project to provide legal identification to the more than 1 billion people worldwide with no official documentation.
Land and Property
If you don’t have a valid title to your land/property, you can’t borrow against it to set up a business and you can’t plan for your financial future. About 70% of the world’s population do not have access to a formal system of property rights. This creates a space for brokers and advocates to handle the process in league with governments. Corruption and high fees are endemic in developing nations in particular. Blockchain could help link an individual’s land/property with his or her details. It isn’t just developing countries like Honduras and Kenya looking to utilise the technology, Sweden has ambitious and advance plans to implement a land registry on a private blockchain.
Social Good
In 2017 The World Bank launched a Blockchain Lab to pilot projects that can improve governance and social outcomes in the developing world.The World Food Programme (WFP)has had real world positive outcomes with blockchain based projects. For instance, over 10,000 refugees in camps in Jordan are being fed by a World Food Program project that gives food vouchers to refugees via supermarkets that are located in the camps. Cashiers are equipped with iris scanners which both identify the customer and settle their entitlement payments by verifying the data with a UN database. The blockchain-based transaction logs can also track food distributions, boosting efficiency and preventing fraud. Carbon credit trading with a carbon currency would allow consumers to make climate friendly purchases as carbon emissions and credits can be tracked transparently and reliably.
Travel
The biggest tourism company in the world , TUI, recently announced it plans to move all its data to the blockchain. It would use blockchain technology to track internal contracts and launched an application- BedSwap- to maintain real-time records of hotel inventories. A single, secure and transparent distributed ledger could drastically reduce costs for airlines, hotels and travel agencies by streamlining bank payments and settlements.
About the author: Paul Henderson is a content strategist with a background developing digital content projects for companies including Bloomberg and Microsoft as well as local government health departments. He is the founder of Blockheads, a consultancy that advises blockchain and fintech startups on content strategy and social media marketing.