Many people worldwide have heard the word, but very few understand why it has created such a frenzy.
In essence, blockchain is a revolutionary technology combining:
- A decentralized database (like an Excel spreadsheet that anyone can read or update)
- Cryptographic verification of transactions (like a bank’s anti-fraud measures)
But what use is it outside of the massive interest in banking, finance, and speculation?
Here are five industries that we think are prepped to be upset by blockchain in the next five years.
With over 17 million shipping containers worldwide, and goods passing through 30 intermediaries on a typical voyage from East Africa to Europe, global shipping is poised to be shaken up dramatically by blockchain tech.
Although it seems like adding blockchain to an existing system is an increase in complexity, global shipping giants like DHL seek to decrease complexity and reduce reliance on third parties by moving certain transactions onto a blockchain.
For instance, shipping giant Maersk and IBM have started working together to do end-to-end shipment tracking.
They are able to check the status of customs documents, view bills of lading, and view the progress of goods in the supply chain. They hope that by deploying this system to their millions of shipping containers, they can reduce delays and fraud, leading to billions of dollars in savings.
In fact, the World Economic Forum estimates that reducing the paperwork-heavy aspects of world trade can increase global GDP by almost 5%!
Opportunities: Wave, developing secure, paperless documents for the shipping industry.
Challenges: One difficulty with adding blockchain tech to logistics is the GIGO problem. In essence, it means that junk data getting verified on the blockchain is still possible due to human error or sabotage. One possible solution is to develop open-source IoT devices that can verify the presence and quality of goods shipped.
Another key industry that will likely be overtaken by blockchain solutions is digital identity. And there’s nowhere that identity is more important than in politics.
Although many elections worldwide have already gone digital, ballot machines are notorious for being hacked, unreliable, and often downright fraudulent.
While blockchain isn’t a guarantee against fraud, the verifiable digital signatures in the underlying cryptography has promise for securing digital identities.
In addition to ensuring that voters are who they say they are, distributed digital voting systems could also help enfranchise people who can’t make it to the polls because of work or childcare’s just vote from your phone!
Challenges: Getting political buy-in for digital identity and/or distributed ledger voting systems is tricky, given the entrenched industry.
Most people will agree that the healthcare system in every country is a mess. But how can blockchain tech help out?
Although it seems like doctors are on your side, anyone who has ever tried to get their medical records transferred from one place of care to another knows how difficult it can be!
Distributed, revocable, secure access to patient records recorded on a blockchain could accelerate competition in healthcare, thus lowering costs and improving patient outcomes.
Opportunities: MedRec, developed by the MIT Media Lab to link patients and medical providers in a privacy-sensitive way.
Challenges: Patient medical records are both private, protected data, and extremely valuable to marketers. An ideal platform would balance these two competing interests.
Although the original Satoshi Dice has lost some steam, gaming is still an industry that is hotly contested in the crypto world.
The primary benefit to players and gaming houses alike is the use of provably fair smart contracts that anyone can verify, unlike other forms of online gambling where you have to take their word for it.
Opportunities: FOMO3D, a modern smart contract that pays a lump sum pot to the last person to put in money before a timer expires.
Challenges: All crypto gambling is essentially also placing a long side bet on the value of the currency. Imagine consistently winning at a slot machine, only to find out that when you cash out your chips, you have less money than you walked in with!
While charities do a lot of good in the world, they’re also one of the oldest and ripest opportunities for fraud. Sadly enough, many times the crying child in the picture is not the one receiving the donation.
But imagine if all donations were traceable, from donor to recipient.
Although we already have third party audit organizations like GiveWell that measure charities based on their auditable finances and outcomes, we still have to trust them to do what they say they will.
Charities are just starting to take advantage of blockchain tech to instill donor trust and help them manage their limited resources.
For example, Akshaya Patra, an Indian NGO serving millions of school lunches to disadvantaged children, used IoT sensors uploading food preparation data to a blockchain to more efficiently serve meals.
Their hope is that this data will not only be easily verifiable, and thus increase their donor’s trust, but will also lead to increased efficiency in their meal preparations. Preliminary results showed that the increased efficiency will allow them to serve millions of additional meals per year.
Challenges: Charities already have limited, scrutinized budgets, and probably donate have the expertise to develop blockchain solutions in-house.
The immense interest in blockchain solutions has driven a lot of experimentation, but so far little change outside of the banking sector. However, these five industries are likely to see massive disruption in the next five years.
One thing’s for sure: competition is fierce to develop next-generation solutions to increase trust, decrease reliance on third-parties, and improve efficiency.
What do you think will be the hottest industry to adopt blockchain technology? Reply in the comments below!