3 Novel Ways to Use Blockchain for Business Across Industries

Blockchain for business has quickly become a priority for security and business leaders across industries, especially financial services, energy and manufacturing. According to a report from the International Data Corporation (IDC), blockchain spending is expected to reach up to almost $12 billion over the next five years.

That’s because industry leaders have quickly realized its potential as a game changer in many business use cases. So how can blockchain be applied in organizations across verticals today, and in what ways is it poised to revolutionize business as we know it in the near future?

What Is Blockchain?

Before we go any further, let’s take a step back and define what this emerging technology actually does. A blockchain is an encoded digital ledger that is stored on multiple servers in a public or private network, so there is no central agent controlling its record. It contains encrypted data blocks representing its history — usually including previous owners of the chain and dates of transaction — that must be validated by multiple nodes, so no single party can delete or manipulate them.

Because of its decentralized nature, blockchain enables businesses to digitize the transactional workflow through a highly secure, shared, tamper-evident ledger that cannot be altered. Each transaction is further streamlined by peer-to-peer validation and empowered by a trusted network without the involvement of a third-party to verify digital payments.

3 Applications of Blockchain for Business

Although it is best known as the underpinning technology of cryptocurrencies, blockchain is gaining momentum as it grows into its full potential as a business technology. Here are three novel ways in which organizations can deploy blockchain for business.

1. Securing Supply Chains

Supply chain management is one major application of blockchain technologies. The world’s goods, including its food and pharmaceuticals, move daily across complex networks and change hands many times before reaching their final destinations.

Blockchain technology has the ability to bring trust and focus to the process, allowing many parties to review a record securely. Because blockchain is a tamper-resistant, distributed database, the technology can help prevent fraud in the often-opaque supply chain.

A recent survey from Deloitte found that 30.8 percent of supply chain professionals surveyed had reported at least one instance of supply chain “fraud, waste and abuse” between 2013 and 2016. Blockchain fights fraud by giving businesses enhanced visibility into data at many levels through every stage. This tamper-proof visibility allows more partners throughout the process to securely access the information, which helps to minimize fraud and errors.

2. Improving Food Safety

Blockchain can speed up reverse-tracking of the food supply chain to identify possible contamination points and cut output, potentially saving lives.

“We are currently seeing a lot of incredible programs being piloted toward improving supply chain management,” said Mick Ayzenberg, a senior security engineer with Security Innovation. “If a retailer discovers that some of their produce is linked to an outbreak of E.coli, they will want to pinpoint exactly which supplier this is coming from in order pull all affected items from the market as quickly as possible. The speed and accuracy at which this can be done may mean life or death for some customers.”

Walmart and IBM have partnered to develop software that uses the blockchain to track products through its supply chain, from the farm of origin to the shelves of the store. Known as IBM Food Trust, the blockchain includes food retailers such as Nestlé SA, Dole Food Co., Tyson Foods Inc., and McCormick and Co., among other industry giants. The goal of the Food Trust is to improve companies’ ability to locate a contamination sooner and stop outbreaks more quickly to limit damage.

3. Providing Faster, More Secure Payments

Many of the world’s biggest banks, payment processors and other institutions in the financial services industry are exploring blockchain as a way to make financial transactions more secure. With blockchain technology, everyone has a record of every transaction in the system, adding trust to the process.

These records, such as smart contracts, for example, can’t be altered once uploaded and are visible for all parties to see. This also embeds protection into the payment process for all parties involved. In addition, many banks are considering using blockchain to shorten the timeframe on processing very large payments and transfers.

Why Blockchain Is a Boon for Business

Much like when the internet changed the way we communicate with each other, blockchain stands to be a massive business disrupter in the next few years. The technology is poised to enhance the cybersecurity of cashless and mobile payments, minimize supply chain abuse and fraud, and offer better tracking of the food supply to prevent disease outbreaks.

These are just a few examples of blockchain’s potential. With a permanent, trustworthy record of transactions, blockchain can help minimize both vulnerabilities and human mistakes and bring security and safety to the next level for many industries.

Joan Goodchild

Contributor

Joan is an award-winning veteran journalist, editor, writer, researcher. She is a seasoned correspondent covering the...