The Four Biggest Uses of Blockchain and Which Companies Are Onboard
Blockchain is by now known as one of the leading technologies of the 4th industrial revolution and is set to have an impact as far and wide as the internet did. This month Finance Monthly delves into the growing world of blockchain, its biggest uses and the top companies that are using blockchain in their corresponding sectors: Banking, Energy, Retail and Gaming.
Banking
Once treated with caution, blockchain technology is now expected to cause substantial disruption to the banking industry, as banks and bankers are consistently seeking use of blockchain technology in order to transform sizeable areas of their business. From payments, settlements and compliance or identification, the accessibility to a decentralised platform by multiple parties at one time, cost-effectiveness and security benefits are winning legions of fans within the banking sector. Some of the main advantages and usage to blockchain technology within banking are:
Payments – Banks are able to shift their payment systems on to blockchain (or at least part of) or for launching digital currencies.
Trade finance – Blockchain technology provides a modernised update that many feel is necessary when it comes to working with various parties on goods shipment. The technology simplifies the process by enabling numerous parties’ access to the same information, at the same time, removing the need for unnecessary paperwork.
Identity – Due to the cryptographic protection blockchain technology provides, it is able to share a constantly updated digital record at all times to more than one person, or company - Great for customer identification and ensuring trust between consumers and banks.
Syndicated loans – Ideal for managing the lifecycle of a loan, Credit Suisse has already adopted the fashion of putting syndicated loans on blockchain technology.
Energy
Blockchain technology promises to help the energy industry radically transform its processes and markets. Although one of the slower industries to adopt the technology, for those who have, one of the many capabilities on offer is the adoption of a peer-to-peer trading model, which changes the way in which energy is bought and sold.
The rise of renewable energy sources that connect back to a wider grid, has helped convert energy consumers in to producers, therefore letting them sell excess power back to the grid and cutting out the middleman; in short it connects those who want green energy, to the producers who can supply.
The other common use within the energy industry is within the development of cryptocurrencies for monetary payments – something only a handful of companies have begun to trial, such as MARUY.
Retail
There are a few areas within the retail sphere in which blockchain currency can add value. The first is with trust and transparency. With the rise of online shopping, it is harder for retailers to earn trust from their customers, as the human element of a company is essentially being removed.
Blockchain technology will help to support the transparency desired by consumers. Similar to banking, all parties involved – supplier, manufacturer, retailer and consumer – can all trace a products journey and history and therefore, reaffirms the trust between retailer and consumer.
A second and obvious use for the technology is of course with payments. Blockchain promises a shared ledger where all financial transactions are recorded, eliminating the margin of error within the transaction. Blockchain also permits retailers to bypass the fees of intermediaries with a currency such as Bitcoin – this offers all the benefits of traditional currency, but without transaction fees and reconciliation issues.
One retailer trialing the use of blockchain technology at present is Walmart. The US chain is using the technology within its food division. The retailer is able to identify and remove food from its stores that has been recalled and using blockchain, the company is able to obtain crucial information from its suppliers, on its food sources, to ensure all vital food standard requirements are being met.
Gaming
Developments within the gaming industry are not uncommon and blockchain technology is now the next, or for some the latest, wave of disruption to the industry. The key shifting factor for gaming is taking it from a traditional hardware platform and on to the cloud, via a decentralized gaming ecosystem. Blockchain technology naturally lends itself to achieving this.
With blockchain, the gaming industry can be a much more enriching experience for gamers, as currently gamers – both casual and hardcore – invest a lot of time and money in to obtaining collectable, limited edition items within their games, however with the help of blockchain, they’ll be able to play and pay for their gaming needs using tokens, such as Playkey’s token, PKT.
Blockchain technology helps in this shift by encouraging owners of powerful gaming PCs and GPUs, to “rent” their servers to the individuals who don’t necessarily have the funds, or hardware they require, to play the games they desire. This means gamers will not have to invest in expensive gaming consoles and other hardware. The more developers look into blockchain technology, the more it becomes obvious that it is a natural transition for the industry.
