Cryptocurrency and Blockchain Use Case and Applications in 2020
The cryptocurrency industry, which first came to recognition through Bitcoin, now caters to multiple paradigms. Although blockchain and Bitcoin’s original use case revolved around the financial ecosystem, cryptocurrency and blockchain applications are now explored in various sectors. From banking and business to energy and education, the applications and use cases of blockchain technology are being developed in various industries.
Let’s look at how cryptocurrencies and blockchain use case work in different industries.
Blockchain Use Cases in Banking and Finance
The banking and finance sector is one of the first areas likely to have maximum disruption with the integration of blockchain. According to this report by PWC, 77% of services in the financial sector are likely to adopt blockchain by 2020. Moreover, 90% of the U.S and European banks started exploring blockchain’s potential by 2018. An analysis by Accenture states that leveraging blockchain can reduce a bank’s infrastructure costs by nearly 30%.
What are the use cases of blockchain and cryptocurrencies in the banking and financial ecosystem?
Cross border transactions- Cryptocurrencies enable instant cross-border transactions without any restriction on time and geographical location, and incur negligible transaction fees.
Trade finance- The Blockchain and smart contracts ecosystem facilitate faster international transactions, instant settlements, reduction of paperwork, and decreased delivery time.
Decentralized finance- DeFi enables the construction of decentralized financial applications on peer-to-peer networks without any intermediaries. The value of tokens locked in DeFi has exponentially grown in the past eight months, raising from nearly $1 billion at the start of 2020 to $4.3 billion.
Blockchain Technology Use Cases In Healthcare
With the ongoing Covid-19 pandemic, the health tech industry continues to receive increasing attention. Under the current ecosystem, millions of health records are breached every year. The entire healthcare industry has turned into a mesh of entities including hospitals, laboratories, insurance companies, and health specialists with little coordination, thereby driving high costs and inefficiency.
Blockchain can be a significant tool to disrupt current inefficient practices.
Data Interoperability- The Blockchain ledger facilitates a single truth of health records that can be shared between multiple entities, the access to which remains in the hands of the patient. This eliminates the need for duplication and breach of health records.
Drug traceability- 10% of drugs circulated
in the developing nations are fake. Blockchain facilitates the tracking of drugs throughout its supply chain from manufacturer to retailer.
Clinical trials- The decentralized ledger allows patients and pharma companies to participate in drug trials while storing patient data on a secured ledger. It also validates the result of clinical trials by recording all data and further storing it on a transparent and immutable ledger.
Blockchain Use Cases in Real Estate and Land Registry
Real estate is a historically significant industry that contributes to the economic growth of a country. However, it lacks any recent significant innovation in its processes and systems. This has inevitably resulted in outdated systems, frauds, manipulation, high exclusivity, and inefficient record-management.
The decentralized ledger facilitates innovation in the complex processes of the real estate and land registry systems.
Digitized land records- The ledger enables a single copy of land records that are shared and updated among multiple stakeholders in real time. This removes discrepancies with data, reduces the possibility of fraud, and stores the records in a distributed and secure manner.
Smart contracts- Smart contracts automate real estate processes and eliminate the need for middle-men. Lease agreements and rental agreements can be drafted on a smart contract wherein both parties honor their commitments without the need of a third party to monitor.
Tokenizing property- Tokenization allows a real estate property to be converted into digital tokens, as well as management on the ledger. This increases liquidity in the real estate market, fractional ownership, and inclusiveness by lowering the barriers in real estate investments.
Blockchain Use Cases in Identity Management
The World Bank states that more than 1 billion people across the globe do not have proof of identity. This restricts a huge portion of the world population from access to basic financial services. In most developing nations, current identity systems still implement physical data storage. However, even centralized cloud-based systems for storing data are vulnerable to hacks and thefts. A decentralized system of storing and managing identity will eliminate the barrier points of inaccessibility, data insecurity, and fake identities.
Financial inclusion- Creating digitized identity data promotes financial inclusion and opens up credit services to economically weaker sections of societies.
Secure storage- Storing identification data on centralized government databases results in identity data theft. A cryptographically secure ledger distributes data onto various systems instead of storing it on a centralized platform.
Owning identity- Biometric data identities can be leveraged to provide basic services for refugees or selected groups of people. Cryptocurrency tokens can be deposited into their wallets, which they can use at supermarkets to purchase essential goods and services. In 2017, a program used blockchain and cryptocurrencies to capture the identities of Jordan refugees to provide aid.
Blockchain Use Cases in the Government and Public Sector
Countries across the globe are leveraging blockchain technology for different sectors of the government. From land registry and education to voting and combating corruption, the technology is being explored for multiple applications in the public sector.
Combating corruption- The technology facilitates a decentralized, immutable, and transparent ledger to record, store, and trace activities, removing loopholes that can lead to corruption and fraudulent participants.
Elections- Through a blockchain dApp, it is possible to create a secure system for citizens to vote directly from their mobile applications. The ledger also enables voting results audits to ensure there was no manipulation through cyber attacks.
Transparency in operations- The Blockchain ledger enables transparency in governmental activities including utilization of taxpayers money and funding for the public sector.
The Bottom Line
The World Economic Forum states that 10% of global GDP will be stored on blockchain by 2025. In other words, a number of dApps and smart contracts developed in various industries will be through the blockchain and cryptocurrency ecosystem. This is just the beginning.