How Can My Industry Benefit From Blockchain?
As we move past the early adoption stage of blockchain technology, industry leaders and innovators are ready to see how they can adapt the technology to offer better products and services. By approaching technology as a tool, industries can apply it appropriately to solve problems and leapfrog ahead of their competition.
Let’s take a look at how some industries are embracing the use of blockchain technology to cut out intermediaries, access data in real-time, and automate processes.
Blockchain is not just a new tool. It’s a chance to rethink an industry and radically change it.
When the supply chain breaks down, finding the weak spot in an opaque industry is difficult. Supply chain management relies heavily on paper—an IBM Institute for Value study estimates that the costs associated with trade documentation processing and administration are up to one-fifth of the actual physical transportation costs. In other words, 20% of transportation costs in the supply chain industry are due to paper records.
On the manufacturing, consumer, or even for governments, here are a few use cases that demonstrate how blockchain can provide more data transparency.
Proof of Authenticity
Eco-conscious consumers want to see proof that a company is delivering on its promises. Consumers have been burned by companies’ eco-friendly claims while they’re engaged in greenwashing or pretending to be environmentally conscious. Making a product’s traceability transparent guarantees a product’s origin. To modern consumers, proof that a wool mattress came from humanely-treated sheep in Wales matters.
Heavily regulated industries, like diamonds or pharmaceuticals, need airtight paperwork to withstand government or financial audits. Scanning products into a digital ledger and tracking them through the manufacturing and distribution process provides the perfect audit trail. Moving paper processing onto the blockchain network provides options companies didn’t have before.
Streamlining paper processes could provide the biggest benefit for tracking inventory. How many products are ready for shipping? How many are in transit? Real-time data from smart contracts can detail where inventory holes lie. Human error can be reduced if there’s less manual data entry at every transfer point in the supply chain.
Currently, every online transaction involves two parties on either end and a financial institution in the middle. Since the purpose of Web3 is to decentralize power, applying blockchain technology would mean removing the middleman from the center of the transaction. For companies that make their living facilitating transactions, like banks and payment processing companies, this is an uncomfortable vision of what their future could look like.
However, there are ways that banks can apply blockchain technology to the financial sector so that they can continue to stay relevant. In Canada, six of the largest banks collaborated to create an identity management tool called Know Your Customer (KYC). The banks worked with government authorities to allow other industries to access the identity key. When consumers use the KYC key at other institutions, the banks earn a small percentage.
Thirty-three percent of the banking and financial industry is considering how to tap into the benefits of blockchain while fintech startups are stepping into the space, trying to alter centralized finance radically. Many startups are trying to tackle peer-to-peer (P2P) transactions, with companies relying on distributed ledger technology to perform the work that traditional financial institutions used to do.
Blockchain solutions in finance aren’t limited to cryptocurrency. Whether a company comes from the traditional side or the startup side of the financial industry, there’s room to create blockchain applications that solve real problems for consumers.
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During a vacation, a traveler falls ill and is taken to the hospital unconscious. Their partner can remember a few of their allergies and pre-existing health conditions, but they’re not sure. Time is of the essence, but the hospital can’t access the patient’s health records located in an entirely different health system in another state 1,000 miles away.
Privacy rules, siloed patient data, and disparate IT systems have made software innovations within healthcare incredibly difficult. Without a centralized database, hospitals and doctors are making decisions without all of their patients’ relevant personal data, and healthcare analysts are working without real-time data that provides transparency into patient data, finances, and trends.
The same issues that make innovation difficult can also be solved by blockchain. Digitizing transactions on a secured, shared and distributed ledger will improve access to patient health records. Tackling industry-wide problems is like trying to eat an elephant in one bite. It seems impossible to fix all of the problems all at once.
Instead, healthcare companies should focus on initiatives that solve smaller problems as they test out how blockchain can be used in this industry. That could look like using permissioned blockchains to restrict information to the appropriate employee. It could be reducing time-consuming health insurance tasks by tying a patient’s verified identity to their benefits. By focusing on patient or provider problems, innovators can use blockchain technology to address solvable issues.
Five major wireless communication service providers are spread across the U.S., representing the bulk of the telecommunications industry. 50+ virtual providers connect to this larger network. For users that travel, they may not notice as their service is picked up and transferred from network to network so that they’re covered, but they’ll notice when they’re charged roaming fees.
Fragmentary systems like telecommunications are ready for evolution, but disrupting this industry requires cooperation. Just like the Canadian banks working together, decentralization is a team sport. It needs the buy-in from multiple players to effect real change. Since the users are in control of their information on Web3, companies must adjust their way of thinking about how they deliver their services.
In telecommunications, blockchain technology could simplify payment between carriers as users switch between them. It can also provide a single source of data. This kind of transparency can give you unique insights into how much 5G certain demographic areas use or analyze the data from more than one point of view.
As more consumers purchase smart devices for their homes, telecommunication companies could tap into the IoT trend to provide an exceptional customer experience. Forbes Councils Member Einaras von Gravrock points out in a recent article, “Consumers crave services and online experiences that are fast, secure, resilient and dependable.” IoT devices are not as safe as they could be. Telecom companies have the resources to use blockchain technology to improve cybersecurity in these devices and add value to their services for customers.
Big Data Decisions
Correctly applied technology solves a real problem. Blockchain solutions aren’t about building cool NFTs for the Web3 world. They provide better data. Fresh data. Big data gives stakeholders a comprehensive picture. Blockchain can leverage the flow of data, especially in platform environments.
If you’re ready to use blockchain technology, start small. Digital transformations fail in so many companies because it’s not part of their broader strategy. Instead, it’s a temporary solution that doesn’t have buy-in from the rest of the company.
- Are you prepared to collaborate with your competitors?
- Will users control their data in your industry?
- Does your industry need better transparency and record-keeping?
- Would your paper processes benefit from automation?
- Are your customers concerned about transparency and sustainability?
- Is there a middleman in your industry that you could remove with smart contracts?
Once you’ve identified problems that could be solved with blockchain technology, find a tech partner to navigate your first step into Web3. A trusted and experienced collaborator can help you avoid the pitfalls that frequently pop up with innovation.