All new technologies go through some growing pains and the same can be said for Blockchain. But while it’s still in the early stages of maturity, it has immense potential to improve many applications and systems across many industry sectors.
A Blockchain is a public ledger that records all the transactions and movements of an item such as a cryptocurrency like Bitcoin. The technology can be applied to physical goods, for example tracking products through a supply chain, as well as electronic transactions other services. Indeed, the UK Government’s Chief Scientific Officer Sir Mark Walport said last year that distributed ledger technology has the potential to transform the delivery of public and private services. He also stated that any new technology creates challenges, but distributed ledgers (or Blockchain) could yield significant benefits for the UK
While there’s no doubt around the potential of Blockchain, some organisations still have concerns about its security as well as associated issues such as identity and trust. It’s in these areas that major players, such as BT, Intel and IBM — as well as smaller start-ups — are driving innovation to find solutions.
So what are the applications we are likely to see emerging?
The current hot spot for Blockchain innovation is in banking, and particularly in the capital markets. There are numerous currency services that could benefit from Blockchain and many sometimes esoteric applications from oil trading to risk ledgers. This is because a Blockchain can process multiple transactions very quickly. For example when it comes to payment processing and corporate bonds, a distributed network of computers can process transactions quicker and more securely than conventional systems.
In the insurance industry, a distributed ledger such as Blockchain can help with complex scenarios involving multiparties such as a building owner managing a complicated matrix of insuring, say, 50 office rental units rented via Air BNB for short-term lets of a week to a year. Blockchain can help by keeping record of all of these small transactions in a central place with full visibility to all involved.
The manufacturing supply chain is another space where Blockchain can simplify complex and time critical functions. Tracking components used in the manufacture of an aeroplane is a complex task involving thousands of different parts coming in from multiple locations. Blockchain has the both the capacity to store, and the ‘traceability’ to keep track of these assets as they move through the supply chain, giving the manufacturers a full view of their existing production as well knowledge of which components are in each aeroplane for servicing and maintenance purposes.
And Blockchain has the capacity to provide immutable and multiparty authentication of provenance and ownership of high-value items, and has been used in diamond trading and art sales.
A really exciting example of where Blockchain can transform a cumbersome process is in health. Maintaining and storing paperwork is a huge challenge for most modern hospitals. Personal records need to be kept secure but made available quickly when needed. Blockchain has the power to revolutionise this process. This could be achieved by keeping a central record, securely and by providing ID and permissions so only the relevant information released to the right people.
Also, how about voting and proof of identity, particularly in remote or developing nations? The power of the distributed network combined with local processing can help to authenticate people, securely.
But the really, really exciting potential is in benefit and aid distribution. How do you get aid to the people or places that it is intended to reach and do it quickly? Some charities estimate that 30 per cent of intended aid is ‘lost’ as it is passes down the chain. Because the Blockchain is distributed and available to anyone with connectivity and a computer, this could help aid distribution by quickly authenticating transactions and getting money to a known and approved list of people acting in the field, with greater transparency.
There is no denying that when it comes to Blockchain, the art of the possible is vast. We are a way off this vision, but I for one am excited to watch this disruptive technology grow and mature, and to see where it takes off and flies.