Impact Of Blockchain Technology On Different Industries
Updated: Feb 19, 2022
After the world got swallowed with a cryptocurrency frenzy, everyone was talking about blockchain technology. Blockchain is an append-only ledger that uses a system of computers to verify a transaction before storing its details. Just like any other new technology, various industries across the board are researching how they can leverage blockchain to their advantage.
Usually, blockchain technology is associated with NFTs, cryptocurrencies, and digital assets.
In this UNICHED article, we will see how blockchain technology could impact various industries.
Now let's get straight into it.
What makes blockchain technology different
Unlike other websites, we are not going to ‘define’ blockchain technology. You don’t need to understand it to use it.
However, we will tell you what makes it special.
Decentralized: Unlike traditional centralized organizations, each party using the blockchain has access to the data and check the history of transactions. Due to this nature, the record of a transaction is stored in multiple nodes over a distributed network. This decreases the chances of a security breach.
Privacy: Blockchain transactions occur between unique alphanumeric addresses that users can choose to keep anonymous. Coupled with the decentralization, no third-party stores any information.
Unified agreement: Every successful transaction within a blockchain network is validated by all the parties using it. This makes it difficult for forged records to exist.
Working: The way in which blockchain technology works along with all its features makes it attractive and valuable. For instance, the fact that it makes transactions safer while increasing privacy and not involving a third party to verify the validity is impressive.
Now let’s see how blockchain could impact various industries.
Impact of blockchain technology on various industries
C-level employees of multiple companies from different industries are attempting to implement blockchain technology to get ahead of their competition. Here is a rundown on how various industries might change.
Increasing transparency and trust: Everyone on the blockchain network will have access to all transactional data. This will not only increase transparency between two businesses but will also do so to the internal structure of an organization.
Improving quality and reducing counterfeits: A transaction detail gets added only when it is validated by everyone on the network. Applying this will decrease the probability of counterfeits slipping through quality control.
Data protection: Apart from creating one single source of truth for an organization, blockchain will also limit the number of individuals who have access to data, thereby securing it.
Automated maintenance and payments: Implementation of smart contracts can enable maintenance-related tasks to carry out automatically when the payment details are immutably added to the ledger.
Cost-cutting: Banks invest a lot in building, maintaining, and securing their centralized database. A lot of that costs can be avoided by using blockchain technology.
Reduced risk: The credit risk of a loan, for example, is high with traditional centralized financial institutions as the usage of funds needs to be tracked closely. With peer-to-peer transactional possibility, the risks are reduced since there is no need for ‘credit guarantees’.
Reduction in financial crimes: The need for a ‘collective yes’ required to record transaction details decreases the probability of a fraudulent transaction taking place.
Medical research: Decentralization and combined ownership of patients' data without personally identifiable information will give many organizations access to a lot of data.
Better patient care: Making patient records sharable and accessible between concerned authorities will reduce transfer costs and enable healthcare professionals to treat them better. Deployment of smart contracts can also help insurance companies in regard to payments.
Data protection: Genomics data, supply chain details, and patient data are some of the many pieces of information that need protection.
Data protection: The immutable and ‘append-only’ nature of blockchain technology makes it difficult for hackers to gain access and manipulate records. The data could be stored in a network of computers rather than in one centralized place.
Property ownership: Transfer of ownership, updating records, and transactions take a long time and cost a lot. Blockchain can make the process as quick as a few hours while reducing the paper trail and saving lots of citizens’ money.
Networked data storage: Presently data in government agencies exist in silos and do not interact with one another. This slows any process that requires data transfer from one to another.
Intermediaries and agents: The real estate industry is plagued with agents that act as middlemen. Blockchain technology will eliminate them altogether while reducing costs, increasing transparency, expediting processes, and securing data.
Fractional ownership and liquidity: Real estate has always been a non-liquid asset as it takes time to change hands. Sellers have to often wait till they find someone who can purchase a property wholly. All those challenges are solved by blockchain.
Tokenization: The risk factor in real estate transactions and additional ‘handling’ costs are always high. Treating properties as tokens reduces them.
Apart from the above industries, blockchain technology can also impact the travel, energy, advertising, and distribution industries. Its ability to expedite things at reduced cost and improved safety makes it malleable.
Blockchain technology is still in the development phase. Various industries are in the process of estimating how much impact it can make and how much of that impact is actually measurable. Furthermore, the malleability of this technology is being tested still as technical leaders are pushing the boundaries of innovation with available constraints. There is a lot of information that we are yet to receive. Presently, we need to keep a close eye on this and the legal guidelines that are continuing to evolve.