This is part two of a three-part series on blockchain. Part 1, Blockchain Basics, was published in April 2018.
Blockchain technology is simply intriguing – and still a bit of a mystery. As a general purpose technology (GPT), its key advantages are trust, transparency, and verification – and the added benefit of a peer-to-peer distributed ledger that keeps a history of any transaction.
All this is terrific – but how can we use it?
If your instinctive reaction was Bitcoin, you’re not alone – cryptocurrency might be the most well-known application of blockchain. But there are many other uses that you might not expect. Keep in mind that this is only the tip of the iceberg. Let’s look at blockchain applications in categories – because, frankly, the variety of potential uses is overwhelming.
Supply Chain: Want to know where your salmon came from? or whether you’re at risk of exposure to counterfeit pharmaceutical drugs? Maybe you just want to see whether a part on your vehicle came from a certain factory. Blockchain can do this, with a verified transaction at each point in the supply chain.
Healthcare: Medical records, drug development, clinical trial management, billing and claims, regulatory compliance – the list is almost endless. The healthcare industry is an excellent place for blockchain technology because of the need for tracking, verification, and privacy.
Identity: think of identity theft. Hacking of personal information. It’s hard to argue that our digital identity is secure now. But what if we could have control over our identity – over the personal information that we choose to share? Blockchain has a great deal of potential to verify identity, from voting records, to transactions, to record keeping.
Smart Contracts / Investment of Digital Assets: this is one of the most interesting applications, because it removes the intermediary – the bank, the investment firm, the lawyer (maybe) – and leverages the peer-to-peer value of a blockchain. There are still risks, but transactions that are traceable and tied to digital assets give a level of protection to both parties that is missing with a large entity.
And speaking of protection? KodakOne will be using blockchain technology to protect digital, copyrighted images using a KodakCoin token (see image at top).
This is a small sample of the ways that blockchain technology can be used. Some key questions to ask when considering blockchain technology are:
- What is the value in having your data as part of a blockchain?
- How do you plan to use the data?
- What types of data do you need to record, and who should have access?
- Is there a competitive, regulatory, or privacy advantage to having data in a blockchain?
Not every application is right for blockchain. But there are a surprising number of disruptive use cases – and that’s why you need to learn more about it. In Part 3, I’ll give you more information on how to get started with blockchain.