When most people think of blockchain technology today, the first thing that usually comes to mind is cryptocurrencies such as Bitcoin, Ethereum, and Monero. However, while it’s true that cryptocurrency is a significant space for showing the utility and application of blockchains, it’s just one area of life that this tech may change forever.
Here, we’ll explore some of the most likely non-cryptocurrency applications for blockchains in the near future. If you’ve already invested in cryptocurrencies or are interested in taking things a bit further, be sure to check out the best Monero wallet options.
What Exactly is a “Blockchain”?
While it’s often misused to describe cryptocurrencies in general, a blockchain is a specific technology with potential use cases that extend beyond that application. Broadly speaking, a blockchain is a decentralized database that is shared among different computer network nodes. Data is stored in “blocks” linked cryptographically to each other in chronological order. Once data is entered into a block, it can no longer be changed.
The main difference between blockchain databases from other decentralized data storage systems is the level of security involved, which, for all practical intents and purposes, makes them impossible to compromise through conventional means. This security means there is no need for a trusted third party to facilitate an above-board data transfer or transaction.
Benefits of Blockchain-based Databases
While deceptively simple, the security innovations made possible by blockchain tech promises a load of benefits, which have applications in different business areas. These potential benefits include, but are not limited to, the following:
Better Authenticity and Transparency
All data transfers in a blockchain are logged in a public ledger for anyone to check, and all data entries are unalterable. This system prevents the need for a third party that both sides trust, which can be a potential weakness in verifying data. This makes blockchain valuable tech in any application that requires secure data to be easily verifiable.
Lower Overhead Costs
In many businesses, ensuring logged data agrees with reality (data reconciliation and auditing) can take up a significant amount of time and effort. Until blockchain technology became available, this was just part of the cost of doing business. The use of blockchain technology may dramatically reduce necessary losses from data auditing, reconciliation, and verification activities.
More Accurate Activity Tracking
One of the more obvious uses of blockchains is tracing different types of activity throughout an organization. This level of tracking may potentially result in a quantum leap in efficiency for businesses with complex supply chains.
How Are Blockchains Being Used By Businesses Today?
It may be impossible to say what the future holds for blockchain technology that isn’t just cryptocurrency. However, we can get a good idea of what might happen based on how different organizations use this technology. Here are some current business applications of blockchains that do not involve cryptocurrencies:
Accounting and Bookkeeping
Internal accounting and bookkeeping fraud are issues that plague businesses of all sizes. The vulnerability comes down to the need to trust specific individuals. Much of the time, this kind of fraud is not even especially sophisticated, relying mainly on the blind trust of business owners and managers. Blockchain technology is already being used to reduce the potential for these types of fraudulent activities by using the data auditing and verification features that are inherent with the technology.
More Secure Contracts
Blockchains can be used to add another layer of security to contracts. Using blockchain technology can effectively ensure that neither party can change the contents of an agreement after both parties have signed it.
Better Managed Supply Chains
Modern supply chains are now extremely long and complex. Using blockchain tech can reduce the need for human intervention to verify the status of products at different points of a supply chain. This has several potentially beneficial effects, from shortening product development and manufacturing cycles to faster, more accurate order fulfillment and shipping. Additionally, product theft and mishandling may also be reduced by applying blockchain technologies in this area.
Less Wasteful Loyalty and Rewards Programs
Blockchains can be used to reduce the waste and fraud associated with gift cards. Businesses can, instead, use blockchain technology to facilitate customer rewards while at the same time reducing their reliance on third-party benefits and rewards services.
Accurate, Fraud-free Data Storage
Medical records, insurance forms, property deeds, and other sensitive documents could be made unalterable and easier to trust using blockchain technology.
Will We See More Blockchain Tech in Business?
Absolutely. Because of the relative speed of innovations in the private sector, it might even be possible that blockchain use will be widespread and accepted among businesses before cryptocurrencies see more general use by the government and the general public.
Today, most individuals may not even be aware of how blockchain technologies affect their lives through their interactions with large businesses. Soon, blockchains may become just as much a fact of life as the internet connection you’re using.