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The term blockchain has never been as ubiquitous as it is. It isn’t uncommon to hear it popping in everyday conversations. Its mention almost always conjures up images of cryptocurrencies and, in particular, Bitcoin. Although it has found prominence in the cryptocurrency world, it has a myriad of applications elsewhere. In this guide, we explore how different enterprises adopt it in executing their functions.
To begin with, let us differentiate the significant types of blockchains. Also, it is essential to identify reasons for the increased adoption of enterprise blockchains.
The Blockchain Dichotomy
Blockchains fall under two major categories; public and private blockchains. Public (permissionless) blockchains are open for the general public to use. Anyone can view, edit, and validate information on it. As such, they are more decentralized.
On the contrary, enterprise (permission) blockchains restrict usage to specific individuals or entities. To use them, one requires authorization from the administrator. Accordingly, they’re centralized.
The Rise in Enterprise Blockchain
The adoption of blockchain technology is on the up. According to IBM, organizations are seeing real efficiencies and cost savings from its use. This assertion is firmed up by Deloitte’s 2018 Global Blockchain survey that found out that 95 percent of companies across different industries were investing in blockchain tech projects. What then, are the pool factors to its adoptions? Here is a sample of a few of them
They’re tamper-proof and, therefore, crucial in stemming fraud within an organization. Their immutability arises from the fact that they possess cryptographic hash functions that prevent alteration of data.
Enterprise blockchain information is available to all players with access to it. The transparency enhances accountability as it compels honesty from the players.
It is fast
Blockchains that eliminate the need for third-party verifiers of information. Therefore they hasten interaction between parties. Communication with them is direct.
They lower the transaction costs.
As blockchains allow P2P engagements, they eliminate or drastically lower transaction fees making them affordable.
Enterprise Blockchain Use Cases
Blockchain technology has broad applications in enterprises. Here are the key sectors employing it
Supply Chain Management
The supply chain is a maze of individuals/entities and their actions. Keeping up with these may prove daunting if the products are voluminous. Thankfully, blockchain technology simplifies the complexities of them. Firstly, it is transparent, helping one to determine the stages a product goes through ab initio. They can identify the processes and the players involved in each step.
Secondly, the technology enables the traceability of shipments. Its immutable nature and time stamp feature make it possible to locate products from the manufacturer’s to the consumer’s end. In this way, players can intervene when required, building confidence in the supply chain.
Provision of Financial Services
Blockchain technology is transforming the financial sector. By eliminating intermediaries, it expedites the uptake of services and transactions. Additionally, it makes transactions affordable.
Further, The Rise of Decentralized finance continues to revolutionize the financial sector. By exploiting the traditional financial industry’s inefficiencies, Defi promises to expand the reach of financial services. It is a solution to the barriers in financing currently experienced. With the cross-platform application, lower costs, and ease of use, it will disrupt liquidity flows.
Another important application of blockchain tech in finance is in the issuance of CBDCs. Many nations are plotting the movement from fiat currencies to digital sovereign ones.
Managing patient information is a daunting activity the world over. Exacerbating this difficulty is the lack of a universal patient identity system matching them to their histories. Here is where blockchain comes to the rescue. By employing cryptographic hash functions, the technology enables the issuance of unique patient ID hence eliminating the danger of mismatched information,
Additionally, this unique patient hashing system creates a patient information pool. This pool allows information sharing and, therefore, interoperability of services. Thus the patient has a broader choice for the services. Similarly, institutions will increase their competitiveness as they wouldn’t want to lose their patients to competitors offering better services.
Blockchain technology allows for P2P transactions between consumers and producers of goods and services. The P2P engagement increases the affordability of goods and services as it negates the use of intermediaries. Again payment is prompt and secure motivating individuals and firms to stay in business.
Real Estate Management
Crucial to the settlement of deals between listers and customers is their interaction. Blockchain technology enhances interactions between these parties through its P2P feature. The feature cuts off intermediaries allowing direct engagements.
Additionally, P2P engagements lower transaction costs, a boon for both the lister and the customer. Taking third parties out of the transactions makes property acquisition affordable. Moreover, it improves ROI. The third parties charge fees per transaction, thus increasing the cost of uptake on the consumer and decreasing earnings on investment.
Employing smart contracts automates property listing and acquisition. These remove the need for face to face engagements between the transacting parties, saving money and time. Further, the tokenizing property allows for fractional ownership. One need not own the whole property but a part of it, removing barriers to entry in the space.
Management of Energy Resources
Global Market Insights Inc predicts a rise in Blockchain technology from $ 200 million in 2018 to $ 3 billion in 2025. This increase affirms the significance that the technology is gaining in the sector.
Investing in blockchain will impact the energy sector differently. First, it will enable P2P energy trading. Private energy producers can sell this energy to the public affordably as a result of decentralization.
Additionally, blockchain enables an audit of the energy distribution systems. In turn, this allows for quick intervention whenever shortfalls or bottlenecks emerge. Thus consumers can expect smooth supplies of their energy requirements.
Blockchain will make the management of energy data transparent. By embracing smart billing functions, the blockchain abets manipulation or misrepresentation of data. Thus it ensures accurate capture and, therefore, billing of the consumers.
The P2P blockchain function allows for borderless trading. It enables the creation of marketplaces, where producers and consumers can interact regardless of their situation.
Further, the technology enhances the confidence of the players in international trade. A primary concern for players in this space is the rise of fraudulent activity. The technology’s transparency feature allows for real-time location and verification of product shipments.
Again, the blockchain allows seamless movement of digital assets between peers in different countries. Consequently, it improves liquidity flows critical to economic development.
The adoption of blockchain technology is in the ascendency. As knowledge in the area expands, so does it find applications beyond the crypto world. Initially approached with caution and outright skepticism, the technology is steadily finding accommodation in the enterprise world. Crucial to this change of heart are its features that increase the convenience and security of executing functions. They are immutable, but they are also transparent, cheaper to transact on and expedite exchanges. They will play central roles in the evolution of functions of different sectors of our economies.