When Thomas Edison invented the light bulb in the late 19th century, not everyone was immediately impressed.
The British Parliament issued a statement in 1878, noting that Edison’s light bulb was “good enough for our Transatlantic friends, but unworthy of the attention of practical or scientific men.”
Nowadays, there are light bulbs installed in every building, worldwide, even in England. It turned out to be one of the most successful inventions in human history.
Blockchain is said to be the next big thing. Some have gone so far to announce the 5th Industrial Revolution.
The first thought that comes to mind when reading the word “blockchain” is the emergence of cryptocurrencies. However, the application of distributed ledger technology goes far beyond digital currencies.
The real innovation is that blockchain establishes trust through a peer-to-peer system, without the involvement of a central authority. You no longer need a bank to make a money transfer, or a real estate agent to buy a house.
Erasing the need for a trusted and certified middleman is the true revolutionary potential of blockchain technology, which will likely affect nearly every industry.
1. Financial industry: Banks are already feeling the pressure
The financial industry is feeling the pressure from blockchain companies already today. As cryptocurrencies are becoming more popular and ICOs are raising serious funds, even conservative bank CEOs are realizing the technology’s potential.
30% of today’s blockchain applications are built for the financial industry. The technology could provide a more secure way to store banking records, and a faster and cheaper way of transferring money worldwide.
Particularly individuals and businesses in developing nations that do not have access to a well-functioning banking system can benefit from blockchain technology. Digital currencies also allow its users to protect themselves from government interventions, as there is no central bank involved which can dilute the asset’s value.
Moreover, distributed ledger technology has the ability to independently verify data. This could be of great use for insurance companies, as the pricing of insurance contracts is highly dependent on the quality and availability of private data.
2. Real Estate: Will we still need real estate agents 10 years from now?
Buying or selling real estate can be a lengthy process which much paperwork involved. Blockchain could simplify the process by eliminating escrow accounts and even cutting out real estate agents.
A smart contract could be designed in a way that it only executes when pre-determined conditions are met, for example funding. Blockchain applications can also be used to transfer land titles and property deeds and ensure that all these documents are accurate, verifiable and stored securely.
The San Francisco-based startup Rentberry, for example, allows potential tenants to bid on the landlord’s offered price. This improves transparency during the rent auctioning process. Users can also take out microloans from the Rentberry community to fund their rental deposits. All monetary transactions, even the rental payments, are governed by smart contracts.
3. Education: Distance learning could soon dominate the industry
The education industry is ripe for a major disruption in the 21st century. Traditional class-room models are increasingly considered outdated. As the distance learning industry is growing, so does the need for independently verified educational records.
So far, verifying academic credentials remains mostly a manual process, in primary and secondary schools as well as in universities. Blockchain-based solutions could simplify these verification procedures, while also reducing fraud risks.
Sony Global Education is leading the way. The company has developed a tool that uses blockchain technology to secure and share student records.
As records can be verified in a secure way, more educational content can move online. This will improve global interconnectedness of educational institutions and students. It will also lead to better access to education, especially in developing countries.
4. Government: Decentralized democracy?
If you have ever volunteered as an election helper, you know the mountains of paperwork involved during the election process.
While internet-based elections have been discussed in recent years, there has not been any major innovation in this field so far. The main concern is security and the fear of voter fraud.
Blockchain-based applications could improve the security of an internet-based voting system, ranging from voter registration to vote counting. It could also add more transparency to the process and significantly reduce costs.
Aside from voting systems, blockchain could also help reduce government bureaucracy and corruption in government agencies. Smart contracts could ensure that welfare or unemployment payments are only released when certain conditions are met.
There are companies working on this. The Delaware Blockchain Initiative aims at increasing efficiency and speed of incorporation services via blockchain technology. BitFury is working with the Georgian government to secure and track government records.
5. Legal Industry: There are too many lawyers anyway!
Verifying and storing legal documents is a key function of the legal industry. Especially wills and inheritances provide an ideal use case for smart contracts.
The Swiss startup PassOn is creating a blockchain-based infrastructure that allows users to transfer digital assets to relatives after they have passed away. The rules for the transfer and verification procedures are encoded in a smart contract.
US-based Blockchain Technologies Corp. is developing a blockchain-based will system that can check the government’s database after a user has passed away, to verify that this person did really pass. Once verified, the assets of this person will be distributed based on a smart contract. As a result, the need for court cases and executors will be reduced.
6. Charities: Trust is the main asset
Donors give their money to charities based on trust. Smart contracts and an internet-based donation management system could ensure that donations will reach people in need.
The BitGive Foundation has developed a bitcoin-based system that provides greater transparency allowing users to track where their money goes.
The U.N. World Food Programme is implementing a blockchain-based system, which enables refugees in refugee camps to receive food via an iris scan. This erases the need for cash or food stamps which can be stolen or misused.
7. Healthcare: All medical records could be stored in one digital ledger
We all have that big – or hopefully not that big – paper-based folder at home storing all medical documents which we have received over the course of our lives. Imagine you wouldn’t need that folder anymore but instead could store all your health records in one single digital ledger that travels with you from birth to death.
Whenever you go to see a doctor he/she could immediately access your entire medical history. This could lead to more accurate diagnosis, more effective treatments and more cost-effective healthcare solutions.
That’s why Philips Healthcare has recently started the Philips Blockchain Lab, moving forward blockchain-based healthcare applications.
8. Corporate applications: From HR to Accounting
Businesses can streamline corporate processes with blockchain technology in many ways.
Human resource departments can conduct background checks more easily, verifying employment histories and criminal records. Chrononbank is a blockchain-based application that focuses on improving corporate recruiting for on-demand jobs. Individuals can find work via the app and will be rewarded for their labor via a cryptocurrency.
Smart contracts can also create more transparent business accounting, as payments could be verified and executed automatically.
The Boardroom app is another great example, it enables users to organize decentralized shareholder voting.
Blockchain technology is still very early in its growth cycle. It has, however, long passed the point of being a dreamy idea for the financial industry. The examples above show that the technology can be used in a wide variety of industries.
In future, the implementation of blockchain technology will only increase. Businesses, governments and non-profit organizations will have to adapt.
As always, there will be forces trying to prevent innovation and protect the status quo. People will lose their jobs; business models will become obsolete.
But eventually, blockchain technology will become a tool that we use every day, just like the light bulb.