by Lindsay N Patterson – Senior Manager, Communications and Public Relations, Association of International Certified Professional Accountants
Yes, blockchain is the technology behind Bitcoin. But just like the internet is more than email, blockchain is more than cryptocurrency. Check out these seven examples of how blockchain is changing the world.
1. Product tracking
Blockchain brings all new meaning to the phrase “farm to table.” It allows an organization to track a single item – such as an apple – throughout the entire supply chain process. For example, a company could track an apple from its specific tree to a numbered crate and from the crate to a truck. From there, you could see where the apple goes as it travels on roads or planes to where it eventually ends up in a store or restaurant. One benefit? Easier inventory tracking. If a product needs to be recalled, a company could save money by recalling only those specific items that are impacted.
2. Legal agreements
When two parties sign a legal agreement, it doesn’t mean both parties will always deliver. Enter smart contracts. This technology allows users to create self-enacting agreements based on whatever terms the parties agree to. It can also trace intellectual property rights and payments. For example, let’s say you sign a contract to pay $150 for digital photographs. Using blockchain technology, you can verify the seller has the authority and right to sell the photographs. At the same time, the seller can pre-verify that you have enough cash to pay for them. Thus, the exchange of the photographs and cash can occur simultaneously, with both you and the seller receiving exactly what you were promised.
Worried about election fraud? Blockchain could be the solution. The technology encrypts votes and allows private individuals not only to confirm who they voted for, but also to verify that all votes were properly counted. And this isn’t voting in 2050. West Virginia tested this technology in their May 2018 primary elections, and Sierra Leone used the technology for their national elections in just two months earlier.
4. Government-issued documents
Blockchain can help governments be more efficient and cost-effective. Using the same ideas that underpin smart contracts (see number 2), governments aim to digitize official records such as licenses and visas. Delaware is already moving forward with this idea, and states like New York considered similar action in 2018. The city of Austin also aims to put identification information – including ID cards, social security numbers and medical information – on a blockchain system. Their goal is to help homeless individuals who may not have easy access to items that prove identity. Even more boldly, Dubai has committed to putting all visa applications, bill payments and lease renewals on blockchain-based systems by 2020.
5. Stock market trades
Blockchain could reduce costs for trading on the stock market. A 2016 Goldman Sachs report says the industry could save up to $12 billion in fees by using blockchain to clear and settle cash securities. “Despite the relatively low transaction costs for securities such as equities, up to 10% of trades are subject to various errors, leading to manual intervention and extending the time required to settle trades,” the report states. Blockchain could virtually eliminate those manual errors.
6. Medical records
Imagine needing to visit the hospital while on vacation. You walk into a waiting room you have never visited before, but you don’t fill out any paperwork. You don’t even pull out your insurance card. Why not? Because your medical records are stored on a secure blockchain that only medical personnel can view. The doctors and nurses in this far-away town immediately have access to information about your vaccination record, previous surgeries, allergies and prescriptions. This blockchain use could prove life-saving in cases where a patient is unconscious and without loved ones able to provide life-saving information to doctors. MIT is already looking at this type of blockchain application.
7. Financial Transactions
Blockchain could supplement or replace the way many financial transactions are currently handled. The technology could be used to track assets and debt. In a world where payments are sent automatically once agreed-upon terms are met, separate invoices and receipts may no longer be necessary. Employers could automatically manage and track payroll and benefit expenses. Barclays is exploring many of these options in an effort to increase compliance and combat fraud.
If these unexpected uses of blockchain sparked your interest in the technology, check out the Association’s Blockchain Learning Program to future-proof your career during the age of disruption.