As blockchain evolves, several industries are poised to take advantage of the distributed ledger technology. Here are four examples of how the blockchain can be used to get work done.
Blockchain could revolutionize the way business is conducted across several industries--but it isn't necessarily right for every company, Derek Martin, a cloud solution architect at Microsoft, explained in a session at Microsoft Ignite in Orlando on Tuesday.
Blockchain, originally developed as a supporting technology for cryptocurrency Bitcoin, is a distributed ledger that tracks transactions, connecting them to other transactions nearby and securely encrypting the information. This ledger technology has proved to be the larger value of cryptocurrencies, with implications for almost every industry, not just tracking digital currency.
The business value-add of blockchain is expected to grow to more than $176 billion by 2025, and to exceed $3.1 trillion by 2030, according to Gartner.
However, many companies that bought into the technology's hype faced challenges to adoption, including corporate muscle memory, technology maturity and security, enterprise needs, a fragmented tech landscape, and unclear ROI, Martin said.
SEE: Quick glossary: Blockchain (Tech Pro Research)
"We are starting to address large-scale business problems," Martin said. For example, Microsoft is currently working with Accenture and the United Nations to prevent human trafficking by using blockchain to provide a legal form of identification for 1.1 billion people worldwide. And in August, Microsoft announced the Coco Framework, an open source system that allows businesses to build scalable, secure blockchain networks, and better leverage the technology to get work done.
The following four industries have the strongest blockchain use cases as the technology currently stands, according to Martin:
The financial industry can use blockchain to redesign costly legacy workflows, improve liquidity, and free up capital, Martin said. The technology can also help reduce infrastructure costs, increase transparency, reduce fraud, and improve execution and settlement times, he added.
Multiple governments in small nations are also examining blockchain's potential use for replacing national currency.
2. Retail and manufacturing
Blockchain can offer the retail and manufacturing industries better supply chain management, smart contract platforms, digital currencies, and tighter cybersecurity, Martin said.
For example, growers, suppliers, processors, distributors, retailers, regulators, and consumers could potentially gain permissioned access about the origin and state of food in their transactions, and more easily trace contaminated foods to their source.
This same process can also be applied to manufacturing, to quality control parts of buildings, for example. This all involves Internet of Things (IoT) sensors and data as well, Martin said.
SEE: The executive's guide to implementing blockchain technology (TechRepublic)
Blockchain could allow people "to always have access to your healthcare records, and grant people access or revoke a person's access from your healthcare records, and have that data always anchored, encrypted, and protected on blockchain," Martin said.
The technology could also remove third-party verifiers such as health information exchanges by directly linking patient records to clinical and financial stakeholders. It could provide fast, secure, authenticated access to personal medical records across healthcare organizations and geographies, he added.
Blockchain could increase the transparency and traceability of how money is spent in government, Martin said. It could also track asset registration, such as vehicles, and reduce fraud and operation costs.
However, blockchain is not the right choice for every industry or individual business, Martin said. If your business needs an application that will be accessed only by the business, the technology does not make sense. Further, blockchain is not a database, and if a business's use case calls for one, it would require changing the way blockchain operates to be successful.
"If you have to change what blockchain is to fit your business case, stop," Martin said. "Business and technical incompatibility means blockchain is bad for you."
Businesses with use cases that do fit blockchain's strengths should "figure out what you want to do, try it, and fail fast," Martin said. "The technology is getting mature, and we want you to be able to succeed."
- How blockchain could revolutionize IoT security (TechRepublic)
- Yes, Blockchain could reverse the course of civilization and upend the world's most powerful companies (ZDNet)
- Microsoft facilitates automated transactions with blockchain and the Coco Framework (TechRepublic)
- Blockchain explained in plain English (ZDNet)
- Blockchain: The smart person's guide (TechRepublic)