Banking isn’t the only industry that could be affected by blockchain tech. Law enforcement, ride hailing, and many other sectors could also have blockchain in their future.
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Bitcoin and other virtual currencies are made possible by what’s known as blockchain technology. Blockchain is essentially a global public ledger capable of automatically recording and verifying a high volume of digital transactions, regardless of location.
Bitcoin’s popularity is proving blockchain’s usefulness in finance, but entrepreneurs have come to believe blockchain could transform many more industries. Ultimately, the use cases for a transparent, verifiable register of transaction data are practically endless — especially since blockchain operates through a decentralized platform requiring no central supervision, making it resistant to fraud.
As startups use blockchain to drive greater transparency and veracity across the digital information ecosystem, they’re boosting awareness of the technology in sectors ranging from infrastructure to public policy. Here are the latest innovative ways companies are harnessing the power of global blockchain.
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Banking is just the beginning. But from a macro perspective, banks serve as the critical storehouses and transfer hubs of value. As a digitized, secure, and tamper-proof ledger, blockchain could serve the same function, injecting enhanced accuracy and information-sharing into the financial services ecosystem.
Swiss bank UBS and UK-based Barclays are both experimenting with blockchain as a way to expedite back office functions and settlement, which some in the banking industry say could cut up to $20B in middleman costs.
Banks are among the growing number of financial services giants investing in blockchain startups such as R3 CEV, which is working with an 80+ member consortium of banks, regulators, and technology partners to develop Corda, a blockchain platform designed to be the “new operating system” for financial markets.
2. MESSAGING APPS
Encrypted messaging app Telegram raised $1.7B from private sale investors before canceling the public sale piece of its much discussed initial coin offering (ICO), which was supposed to break records at $1.2B. Telegram is still developing its blockchain-based platform called the TON (Telegram Open Network) that extends Telegram’s services into payments, file storage, and censorship-proof browsing for its 200M users.
3. HEDGE FUNDSNumerai is taking the hedge fund model — employing a bunch of traders and quants — and decentralizing it. Numerai sends its thousands of disparately located quants encrypted datasets and asks them to build predictive models, and the best contributors are rewarded with Numerai’s token called Numeraire. Then, Numerai takes the strategy and creates a meta-model to make trades. In some ways it’s a blockchain-based spin on Quantopian‘s model for rewarding data scientists, except it’s less a competition and more an invisible collaboration.
4 . VOTING
Elections require authentication of voters’ identity, secure record keeping to track votes, and trusted tallies to determine the winner. In the future, blockchain tools could serve as a foundational infrastructure for casting, tracking, and counting votes — potentially eliminating the need for recounts by taking voter fraud and foul play off the table.
By capturing votes as transactions through blockchain, governments and voters would have a verifiable audit trail, ensuring no votes are changed or removed and no illegitimate votes are added. One blockchain voting startup, Follow My Vote, has released the alpha version of its stake-weighted end-to-end blockchain voting solution.
5. INTERNET IDENTITY & DNS
In the current web, it’s difficult to establish your true identity, and your personal information lives on company servers for apps you use with little inter-operability (even using Facebook as a log-in only gets you so far). Platforms like Blockstack and uPort think there’s a future where your identity can be easily carried with you around the internet. On Blockstack, for instance, a user will access apps atop decentralized networks, and have perfect portability of their data.
6. CRITICAL INFRASTRUCTURE SECURITY
The current internet architecture has proven easy to hack, especially when it comes to IoT devices. As critical infrastructure like power plants and transportation all become equipped with connected sensors, the risks to civil society as we know it are great. Companies like Xage, for example, are employing blockchain’s tamperproof ledgers to sharing security data across industrial device networks.
Though blockchain’s ledger is public, its data communications are sent and verified using advanced cryptographic techniques — ensuring that data is coming from correct sources and that nothing is intercepted in the interim. Thus, if blockchain is more widely adopted, the probability of hacking could go down, as the cyberprotections of the technology are more robust than legacy systems.
Other potential applications include using blockchain to provide massive scale data authentication. For example, using its blockchain-enabled KSI (Keyless Signature Infrastructure), cybersecurity startup Guardtime tags and verifies data transactions.
7. RIDE SHARING
Ride apps like Uber and Lyft represent the opposite of decentralization, since they essentially operate as dispatching hubs and use algorithms to control their fleets of drivers (and dictate what they charge). Blockchain could inject new options into that dynamic: with a distributed ledger, drivers and riders could create a more user-driven, value-oriented marketplace.
Startup Arcade City, for example, facilitates all transactions through a blockchain system. Arcade City operates similarly to other ride-sharing companies but allows drivers to establish their rates (taking a percentage of rider fares) with the blockchain logging all interactions.
This allows Arcade City to appeal to professional drivers, who would rather build up their own transportation businesses than be controlled from a corporate headquarters: drivers on Arcade City are free to set their own rates, build their own recurring customer base, and offer additional services like deliveries or roadside assistance.
8. INTERNET ADVERTISING
The internet as we know it emerged with ad hoc solutions for advertising. In aggregate, ads add tons of mobile data usage to loading web pages, and both advertisers and consumers suffer from any lack of protocols.
Brave recently ICOed its Basic Attention Token (BAT) to compensate advertisers and users. Instead of a middleman like Google or Facebook’s ad arm, advertisers will list directly onto Brave’s blockchain-based browser. Users who opt in receive fewer, but better targeted ads without the malware. And advertisers get better data on their spending.
9. CRYPTO EXCHANGES
One way blockchain reduces conventional cybersecurity risk is by simply removing the need for human intermediaries — thus lessening the threat of hacking, corruption, or human error.
Ironically, some of blockchain’s most successful companies are fairly centralized middlemen, and many new projects are “dogfooding” the buying and selling of blockchain-based currency by putting the whole exchange on a blockchain.
One high profile project here is Enigma, which claims MIT and Flybridge Capital as supporters. Enigma is the developer of Catalyst, an off-chain decentralized exchange and investment platform that works without the need of a third party to act as clearing house.
Another high-profile decentralized exchange is Ethererum-based 0x.
10. EDUCATION AND ACADEMIA
By nature, academic credentials must be universally recognized and verifiable. In both the primary/secondary schooling and university environments, verifying academic credentials remains largely a manual process (heavy on paper documentation and case-by-case checking).
Deploying blockchain solutions in education could streamline verification procedures, thereby reducing fraudulent claims of un-earned educational credits.
Sony Global Education, for example, has developed a new educational platform in partnership with IBM that uses blockchain to secure and share student records.
Learning Machine, a 10-year-old software startup, has collaborated with MIT Media Lab to launch of the Blockcerts toolset, which provides an open infrastructure for academic credentials on the blockchain.
11. CAR LEASING AND SALES
The experience of leasing, buying, or selling a vehicle is a notoriously fragmented process for stakeholders on all sides of a transaction, but the blockchain could change that.
In 2015, Visa partnered with transaction management startup DocuSign on a proof-of-concept project that used blockchain to streamline car leasing — transforming it into a “click, sign, and drive” process.
With the Visa-DocuSign tool, prospective customers choose the car they want to lease and the transaction is entered on the blockchain’s public ledger. Then, from the driver’s seat, the customer signs a lease agreement and an insurance policy, and the blockchain is updated with that information.
If the technology were to be implemented in practice, it’s not a stretch to imagine that a process of this sort might be developed for car sales and registration as well.
12. INDUSTRIAL IOT & MESH NETWORKING
IBM and Samsung have been working on a concept known as ADEPT (Autonomous Decentralized Peer-to-Peer Telemetry), which uses blockchain-type technology to form the backbone of a decentralized network of IoT devices. With ADEPT, a blockchain would serve as a public ledger for a massive amount of devices, which would no longer need a central hub to mediate communication between them.
Without a central control system to identify one another, the devices would be able to communicate with one another autonomously to manage software updates, bugs, or energy management.
Some startups are looking to build blockchain technology into an IoT platform as well. For example, Filament (formerly Pinocchio) provides a decentralized network for IoT sensors to communicate with each other.
By encrypting down to the hardware level and leveraging blockchain technology, Filament’s decentralized network stack allows any device to connect, interact, and transact independent of a central authority.
13. CLOUD STORAGE
Enterprises that offer cloud storage often secure customers’ data in a centralized server, which can mean increased network vulnerability from attacks by hackers. Blockchain cloud storage solutions allow storage to be decentralized — and therefore less prone to attacks that can cause systemic damage and widespread data loss.
Dubbed the “Airbnb for file storage,” Filecoin is a high-profile crypto project that rewards the hosting of files. This could help create a decentralized version of S3 from Amazon Web Services.
The company behind it, Protocol Labs, has garnered investment from Union Square Ventures, Naval Ravikant, and The Winklevosses, among a number of prominent names. But Filecoin is just one of many projects in this area, and other token names in storage include Storj and Siacoin.
Storj offers a blockchain-enabled cloud storage network to improve security and lower the transaction costs of storing information in the cloud. Storj users can also rent out their unused digital storage space in a peer-to-peer manner, potentially creating a new market for crowdsourced cloud storage capacity.
14. CLOUD COMPUTING
Blockchain-based processing projects like Golem are allowing users to rent out their CPU capacity and be rewarded with tokens. Similarly, Ethereum itself has been informally called the “world’s supercomputer” because of its ability to execute smart contracts and its mining is ASIC resistant (allowing everyday PC owners to compete proportionally with big mining operations).
As more industries embrace blockchain in a holistic way, the research, analysis, consulting, and forecasting industries could also be shaken up by the technology: with an unshakably accurate transaction record supporting their data analysis, forecasting operations will have a stronger foundation for using machine learning algorithms to cultivate targeted predictions and insights.
Even now, blockchain is creating new a new “predictions market.” Augur, built on the Ethereum blockchain, allows users to forecast events and be rewarded for predicting them correctly.
The service remains in beta, but the company says the entire process will be decentralized and will enable users to place bets not only on sports and stocks, but on other topics such as elections and natural disasters.
16. MUSIC/ENTERTAINMENT RIGHTS AND IP
Entertainment entrepreneurs are turning to the blockchain to make content sharing fairer for creators using smart contracts, whereby the revenue on purchases of creative work can be automatically disseminated according to pre-determined licensing agreements.
Before pivoting into an entertainment think tank, Mycelia was launched with a focus on producing “intelligent songs” supported by blockchain technology and cryptocurrencies. Ascribe.io, a product of BigchainDB, also works to provide a trackable, verifiable record of ownership between artists and their work.
British blockchain startup JAAK also has plans to work with music rights holders and other entertainment-industry stakeholders. JAAK, which provides an operating system for content, is developing a platform that allows media owners to convert their repository of media, metadata, and rights into “smart content” that can self-execute licensing transactions on the Ethereum blockchain.
17. STOCK TRADING
For years companies have worked to ease the process of buying, selling, and trading stocks, and now new blockchain-focused startups are looking to automate and secure the process more efficiently than any past solution.
For example, TØ.com, a subsidiary of Overstock, wants to enable stock transactions online using blockchain tech. The “t zero” platform integrates cryptographically secure distributed ledgers with existing trading processes to reduce settlement time and costs and increase transparency and auditability.
Partnerships with existing trading networks and exchanges will help blockchain take off in the space. Blockchain startup Chain (which is also mentioned below) is a leader on that front: the company helped orchestrate a live blockchain integration that successfully connected Nasdaq’s stock exchange and Citi’s banking infrastructure.
18. REAL ESTATE
Pain points for buying and selling property include a lack of transparency during and after transactions, copious amounts of paperwork, possible fraud, and errors in public records. Blockchain offers a way to reduce the need for paper-based record keeping and speed up transactions — helping stakeholders improve efficiency and reduce transaction costs on all sides of the transaction.
Real estate blockchain applications can help record, track, and transfer land titles, property deeds, liens, and more, and can help ensure that all documents are accurate and verifiable.
Tech startup Ubitquity offers a Software-as-a-Service (SaaS) blockchain platform for financial, title, and mortgage companies. The company is currently working with Land Records Bureau in Brazil, among other stealth clients, to input property information and record documents through the blockchain.
Companies like AirBnB, Tujia, Wimdu, and others provide a way for people to temporarily exchange assets — including private homes — for monetary value. The problem is that in the absence of a public record, it has been nearly impossible to insure assets on these platforms.
Together with blockchain startup Stratumn, which helps developers build trustworthy applications enabled by Blockchain features, professional services firm Deloitte and payment services provider Lemon Way recently unveiled a blockchain-enabled solution called LenderBot.
LenderBot is a micro-insurance proof of concept for the sharing economy that demonstrates the potential for blockchain applications and services in the industry. LenderBot, which allows people to enroll in customized micro-insurance by chatting through Facebook Messenger, enables blockchain to serve as the third-party in the contract between individuals as they exchange high-value items through the sharing economy.
Healthcare institutions suffer from an inability to securely share data across platforms. Better data collaboration between providers could ultimately mean higher probability of accurate diagnoses, higher likelihood of effective treatments, and the overall increased ability of healthcare systems to deliver cost-effective care.
Use of blockchain technology could allow hospitals, payers, and other parties in the healthcare value chain to share access to their networks without compromising data security and integrity.
To that end, startup Gem has launched the Gem Health Network, a blockchain network for the global companies across the continuum of healthcare. (Gem is using Ethereum blockchain-enabled technology to create a secure, universal data-sharing infrastructure for the space.)
Tierion is another blockchain startup that has built a platform for data storage and verification in healthcare; both Gem and Tierion recently partnered with Philips Healthcare in the Philips Blockchain Lab.