Blockchain Insights : Blockchain in industries around the world (Part 1)

What is Blockchain:

Many of us hear about blockchain and cryptocurrencies like bitcoin everywhere nowadays. Very high load of search topics in google in Bangladesh tends to move to blockchain and whether bitcoin is legal in Bangladesh. So a thought arises, what is the hype of this blockchain, what is it?

Blockchain technology itself is nothing entirely new, It combines existing technologies like an age-old concept of recording book that we use to keep track of our income and expenses or in business an account book to keep track of the money. Blockchain is just the digital version of it with some enhancements.

When searching for blockchain we get some technical terms like decentralized, distributed and record that are connected using cryptography. These basically means that the recording book we already have talked about is not maintained by one single person or a company rather its shared between multiple person in a network and secured and public(depends on the users).

Blockchain’s Use in Industry:

From last few years major research and development is going on producing and developing uses of blockchain. Its visible in many sectors of our society.

Financial services

• Banking
• Stock trading and hedge fund
• Crowdfunding
• Cryptoexchange
• Will and inheritance
• Accounting
• Loan and credit
• Insurances

Travel & mobility

• Automotive manufacturing
• Car Leasing and sales
• Ride-hailing
• Trucking
• Aerospace and defense
• Air Travel
• Hospitality

Infrastructure

• Industrial IoT
• 3D printing
• Construction, Architecture and building
• Real Estate
• Energy Management

Healthcare

• Health information exchange
• Claims management
• Pharmaceuticals
• Research and Clinical trials

Public sector

• Govt. and Public records
• Voting
• Gun tracking
• Federal Mail
• Law Enforcement
• Public Transportation
• Waste Management
• Public Assistance

Retail & CPG

• Retail
• E-commerce
• Food and Beverage
• Gift card and Loyalty program

Agriculture & mining

• Crops and Agriculture
• Animal Husbandry
• Fishing
• Logging and Timbre
• Mining

Education, communication, & information services

• Education and Academia
• Publications
• Libraries
• Messaging

Entertainment

• Intellectual properties and rights management
• Video Streaming
• Gaming
• Sports Management
• Art
• Photography

Other

• Cloud computing and storage
• Internet identity and dns
• Internet advertising
• Human resources
• Business and Corporate Governance
• Forecasting
• Charity

For Part 1 will discuss Financial Services

Banking:

Blockchain and banking are just the start. From a high level perspective, banks serve as the critical storehouses and transfer hubs of value. As digitized, secure, and tamper-proof ledgers, blockchains can serve the same function, injecting enhanced accuracy, transparency and information sharing into the financial services ecosystem.

Credit Suisse, for example, partnered with New York-based startup Paxos to use blockchain to settle US stock trades in March 2020. Meanwhile, JPMorgan Chase has entered the blockchain space with the JPM Coin, which they intend to use to facilitate transactions between institutional accounts. Other banks like Goldman Sachs and Citigroup have also experimented with blockchain. The incumbents performed an equity swap built on Axoni’s Axcore blockchain in February 2020.

Facilitating payments is highly profitable for banks — cross-border transactions generated $224B in payments revenues in 2019. However, blockchain technology offers a secure and cheap way of sending payments that cuts down on the need for verification from third parties and beats processing times for traditional bank transfers.

One of the greatest financial service and mobile wallet service providers Bkash along with Standard Chartered Bank along with Valyou of Malaysia, launched the first blockchain-based cross-border remittance service in Bangladesh, facilitating instant transfers from Malaysia.

Stock Trading and Hedge Fund:

For a long time companies have worked to ease the process of buying, selling, and trading stocks, and now blockchain-focused startups are looking to automate and secure the process more efficiently than any past solution.

TØ.com, a subsidiary of Overstock, wants to enable a stock transaction system online using blockchain. The tZERO platform integrates cryptographically secure distributed ledgers with existing trading processes to minimize settlement time and costs and increase transparency and auditability.

Working together with currently working trading networks and exchanges will help blockchain take off in the space. Blockchain company Chain, which was acquired by Stellar in 2018, helped build a live blockchain integration that successfully connected Nasdaq’s stock exchange and Citi’s banking infrastructure. More recently, Nasdaq partnered with R3 to build a platform — using R3’s enterprise blockchain software solution Corda — that financial institutions can use to create and manage their own digital asset marketplaces.

Crowdfunding:

The crowdfunding industry emerged to “disintermediate” capital formation by giving backers (aka “pledgers”) or individual investors the ability to fund creators and entrepreneurs, without the involvement of any middleman. Thus providing a natural alignment with blockchain capabilities.

For example, the movie BRAID became the first major feature film to be financed through a token “crowdsale” on the Ethereum blockchain through its $1.7M campaign on Weifund.

Initial Coin Offerings (ICOs), in which companies sell cryptocurrency-backed tokens in their companies in the same manner as a publicly traded company sells stock, are another example of blockchain-powered crowdfunding. Companies like CoinList, which began as a collaboration between Protocol Labs and AngelList, are bringing digital assets to the mainstream by helping blockchain companies structure legal and compliant ICOs.

Other startups emerging in the ICO ecosystem include Waves, a platform for storing, managing, and issuing digital assets, and Republic‘s crypto initiative, which is aimed at helping people invest in ICOs for as little as $10.

Crypto Exchange:

One way blockchain reduces conventional cybersecurity risk is by simply removing the need for human intermediates — thus lessening the threat of hacking, corruption, or human error.

Some of the most successful blockchain companies are fairly centralized middlemen. However, many new projects are “dogfooding” the buying and selling of blockchain-based currency by putting the whole exchange on a blockchain.

A 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 which can work without the need of a third party to act as a clearinghouse.

Another high-profile decentralized exchange is Ethereum-based 0x.

Centralized exchanges like Binance and Coinbase have made moves in the decentralized exchange space, launching Binance DEX in 2019 and acquiring the peer-to-peer trading platform Paradex in 2018, respectively.

Wills and Inheritance:

Wills are a specific kind of contract, providing an ideal use case for a blockchain smart contracts solution. In addition to the challenge of verifying the deceased’s actual death, will-related litigation often involves challenges to the “genuineness” of a will — that is, whether the legal interpretation aligns with the deceased’s intentions.

While the application of blockchain would not completely remove these challenges, it might make it easier to identify factual information, thus providing verifiable transaction data, and dismiss claims that are without merit.

Through its Smarter Contract platform, Japan-based startup Zweispace is developing a self-executing will system with a blockchain that will automatically distribute assets of an inheritance trust to beneficiaries upon confirmation of the trustee’s passing, eliminating the need for executors and going to court regarding the integrity of the will.

Accounting:

As the banking industry continues to adapt to cryptocurrencies and blockchain technology, accountants are beginning to follow along.

Accountants work with a lot of documents — from tax forms to bank statements to spreadsheets — containing a lot of personal or organizational information. Using blockchain technology could make it easier to keep track of this sensitive data as it is processed by accounting firms.

Data tracking enabled by blockchain technology can also help to automate certain accounting services using AI, which could reduce human error and capture the occurrences of fraud.

Big four accounting firms are already trying to implement blockchain: KPMG has invested in programs and projects to research and share information about blockchain; PwC has created an auditing service for cryptocurrency assets; Deloitte has developed blockchain-based software; while EY‘s Blockchain Analyzer can help auditors to accurately vetting digital assets.

Loan & Credits:

Banks and lenders underwrite loans based on a system of credit reporting. Using a credit report provided by one of 3 major credit agencies — Experian, TransUnion, and Equifax — banks evaluate the risk that you won’t pay them back.

This central system can be hostile to consumers. The Federal Trade Commission (FTC) estimates that 1 in 5 Americans have a “potentially material error” in their credit score that negatively impacts their ability to get a loan. Further, concentrating this sensitive information within 3 institutions creates a lot of vulnerability. The September 2017 Equifax hack exposed the credit information of nearly 150M Americans.

Alternative lending mechanisms using blockchain technology offer a cheaper, more efficient, and more secure way of making personal loans to a broader pool of consumers. With a cryptographically secure, decentralized registry of historical payments, consumers can apply for loans based on a global credit score.

A number of companies are working in this space. Dharma Labs, for example, is a protocol for tokenized debt. It aims to provide developers with the tools and standards necessary for building online debt marketplaces. Meanwhile, Bloom wants to bring credit scoring to blockchain and is building a protocol for managing identity, risk, and credit scoring using blockchain technology.

Insurance:

Most blockchain applications in the insurance industry today are focused on improving operational efficiency. Rather than developing new products, insurance companies are looking at ways blockchain can reduce costs, increase speed to market, and provide better customer experiences.

For example, using a blockchain to create a single source of truth for transactions between parties has the potential to significantly reduce processing time and costs for insurance companies.

Many insurance blockchain initiatives include cross-border partnerships or deal with cross-border transactions, leveraging the immutability and version control aspects of blockchain tech.

Insurwave, a joint project between consulting firm EY and blockchain company Guardtime, delivers a blockchain platform aimed at marine insurance. Built on Corda’s distributed ledger technology, the Insurwave solution creates an immutable database between shippers and insurers to allow for better risk assessments and quicker claims payouts.Clients can read more about 12 blockchain pilots in insurance here. We’ve also looked in depth at how blockchain could disrupt insurance.