The basis of Bitcoin is the public open source ledger that was set from the beginning to enable a finite number of Bitcoin. Known as the blockchain, this ledger keeps track of all transactions through a process called mining.
With all of the attention given to the price runs of Bitcoin, and other popular cryptocurrencies like Ethereum and Ripple, many investors and captains of industry are predicting the blockchain itself will be the most transformative innovation. While cryptocurrencies will likely supplant traditional currencies, the blockchain offers a completely new way for businesses to present applications.
The blockchain is essentially a distributed database that features different blocks of data. Each distinct block is timestamped and has a cryptographic link to the preceding block and its stored data. This database is readable by everyone involved, since it is attached to individual blocks, but a single user will not be able to alter the information without the entire group seeing their actions.
However, there are some caveats to using the blockchain as an application base. Their distributed structure makes them difficult to manage at times, and the very definition of a blockchain is still fluid. There’s also likely to be serious blowback from some industry participants who don’t want to shift from proven traditional processes to a blockchain-based model.
Here are some industry use cases and additional benefits of using blockchain for applications:
The blockchain is ideally suited to function as an unbreakable and transparent ledger of identity documents. Whether it involves passports, birth certifications, or user names and passwords, blockchain-based ID management tools provide individuals with enhanced control over who has access to their information. With the blockchain, individuals can develop their own digital signature that can be attached every time credentials are shared.
Many humanitarian organizations and governments are currently exploring the use of blockchain technologies to provide a form of ID for the hundreds of millions of people worldwide who currently lack any. For example, Syrian refugees in a Jordan camp are leveraging blockchain tech by participating in the United Nations’ World Food Programme. The refugees receive a stipend for food, and utilize an identity-verifying iris scanner before every food transaction. The back-end of this process is built on a blockchain that authenticates the person and confirms the transaction. Other humanitarian organizations are looking closely at the blockchain for its low operating costs and ability to manage data across time and regions. On the governmental side, Estonia, Dubai, and Australia are all conducting trial campaigns that involve tracking identification documents on the blockchain, and other countries will eagerly await the results.
Undocumented individuals are often more susceptible to crime, and are largely pushed away from economic or social opportunities. Non-profit organizations can use blockchain-based technology to provide refugees and others they serve with an immutable record of their identity and any related credentials. So if a medically-trained refugee flees Yemen, they can use the blockchain to manage their credentials, which could help them obtain employment elsewhere.
Supply chain and Logistics
The immutability of the blockchain ledger makes it ideal for the tracking of products throughout the supply chain. Companies that manage complex logistics can improve the transparency between all involved parties by using the technology. The blockchain is much more secure than traditional systems, and we’ll likely see broader adoption as companies see the value in managing shipments under cryptographic protections.
Transactions involved in logistics can be further automated on the blockchain using “smart contracts” that enforce the rules of transference of assets. Blockchain transactions will be more transparent, which should simplify claims settlements, reduce middleman-related costs, and shorten the overall supply chain. Blockchain can also improve the traceability of assets, because it provides an immutable record of transactions.
The pharmaceutical supply chain is a perfect illustration of this. It involves many moving parts that do not always know exactly where drugs or treatments are in the process. Gene therapy treatments involves patients providing their DNA, then it goes to the manufacturing facility, and then from the facility to the hospital. At the hospital, it has to be properly stored and then the nurses and doctors need to account for its usage. With the blockchain, there’s no administrator that can alter or edit documentation, since every owner can put the details on each block, producing a detailed and foolproof chain of custody.
The ability of blockchain to create immutable ledgers makes it exceedingly attractive for the healthcare field. Blockchain-based records can improve transparency and efficiency in healthcare settings, bridging the gap in collaboration among providers, payments and insurance. Blockchain technology will also work well with IoT devices, such as wearables, which are further transforming healthcare by providing physicians and other care providers with instant access to patient data. Using the blockchain’s cryptographically-secure framework can help minimize the loss of patient data and streamline the processes and validations that occur between patients, their doctors and insurance carriers.
Pharmaceutical firms can also use the blockchain to track the formulation process of drugs throughout the entire production, which can lower costs and prevent counterfeiting. With such a system in place, every party involved in the process can rely on the blockchain to authenticate every shipment, from the drug makers to the receiving hospitals and care centers. The blockchain can also be used to securely transport proprietary pharma information between two entities, helping to keep it safe from theft.
Overall, blockchain technology holds promise that greatly exceeds the use of Bitcoin and other cryptocurrencies. It offers a cost-effective platform for application developers that can operate outside of political or geographical boundaries and transform dozens of industries.
About James Song:
James Song is the founder and CEO of ExsulCoin, a blockchain technology startup focused on solving the global refugee crisis. He is also the creator of Exsul, an AI-driven blockchain app delivering free basic education that is currently being tested at the Kutupalong Rohingya Refugee Camp in Cox’s Bazar, Bangladesh.
Previously, James managed the investment portfolio at Faircap Partners, a Myanmar private equity firm, where he currently remains as a senior advisor. He is also the founder of Faircap Angels—Myanmar’s first angel investment group. Prior to his work in Myanmar, James was a principal at Fury Capital, an event-driven special-situations hedge fund, where he applied his extensive analytical skills to uncover deep-value inefficiencies in U.S. securities.
James graduated salutatorian from Harvard University, and received an MSc in neuroscience from University College London. His extraordinary accomplishments and proven track record have been recognized by the World Economic Forum, which recently named him a Young Global Leader.