Industrial revolution 4.0 has begun. The Blockchain will revolutionize the way contracts are tracked among parties. Blockchain will redefine the definition of “Trust” and open up transformations across industry. Simply put, Blockchain is a file system that creates blocks of transactions, called the distributed ledger in a multi-party system, where all parties have access to the ledger through their private keys.
Transactions in this distributed ledger get approved based on consensus build through proof of work (POW). Most important feature of Blockchain is that transactions cannot be rolled back or tampered with.
Across industry there is lot of experimentation on blockchain and various business problems are being evaluated for the use of Blockchain. As an example, small and medium enterprises (SMEs) have been at the mercy of larger companies because credit cycles were essentially not under their control.
Payments used to get delayed, and credit terms were not honoured even through specific dates stated in contracts. For such SMEs, legal recourses are an expensive proposition, and here Blockchain can solve their problem as it can execute smart contracts based on agreed T&Cs among parties and facilitate the execution of goods & payments.
Here are few industries that can benefit from this technology
According to consulting firm E&Y, the size of the retail industry is $650 billion, and only 10 percent is organised. Of the $65 billion that is organised, only 1.5 percent is spent on future technologies. The e-commerce industry has arguably changed the way we shop and live and the opportunity for Blockchain implementations are plenty in this domain, especially in supply chain management.
It is the most important aspects of the e-commerce industry since the current supply chain system has issues which only blockchain technology can solve in today’s, fast-moving ecommerce business world.
Blockchain in e-commerce aims to create a marketplace using fast and secure transactions by providing low cost financial transactions, high security standards, and an overall amazing customer experience for any e-commerce business model. Services like AI and machine learning (ML) can be built on top of Blockchain to allow retailers to take decisions faster and bring transparency across complex SCM process.
All the transaction processes would work like e-commerce/retailing, but the applications can be used to track credit cycle payments, design stock movements and purchase decisions. Most company information flows through a supply chain characterized by communication with little or no agreement on data classification, or even a uniform way of recording, storing and exchanging data.
It has the potential to create smarter and more secure supply chains, tracking the journey of a product through a clear and solid audit trail, with real-time visibility. For example, a car manufacturer works with hundreds of vendors.
Have department to cover from design to product planning to marketing and must be in sync. Blockchain as a system ensures design communicates its plans to the entire chain and only if the chain accepts the viability will the business move forward with execution.
Here, the Product Planning department could get in to its own distributed ledger and integrate its vendors on to the Blockchain platform, so the “bill-of-materials” is executed with precision. At the board level, these transactions are observed on a real-time basis.
Growth in businesses demand the need to bring revolutionary changes in all its aspects. The urgency escalates to higher levels when it comes to the field of health care. Focusing on quality health care services always means ensuring patient health management at a superior level. It is seen that critical patient data and information is scattered across different departments and systems due to which crucial data is not accessible and handily available in times of need.
Blockchain can be leveraged at several levels in this industry. Under a blockchain network, every citizen who is insured can avail government-provided, or private insurance in any hospital and not be denied service.
Patients Unique Identity Number (Aadhaar number) can be linked to it for easy verification of an individual, with the system generating blocks of transactions that insurance companies and hospitals must honour provided the information of the citizen is correct. If the information provided is wrong, the ledger identifies the process and stops the execution of the transaction.
Blockchain as a technology is used by different governments to improve services, secure transactions, and enhance security and trust amongst the system. It has many applications for the public sector that can help improve the quality of government services, safeguard property rights, prevent fraud while improving transparency.
This trend is growing and is attracting a great deal of attention from agencies around the world. Problems related to food safety, profit identification in food supply chain, land title registration, subsidy disbursement are some of the major issue which can be dealt impressively with the adoption of blockchain technology in the government systems.
The challenge in Blockchain implementation is that it needs consortiums, and organisations agreeing to be on a single platform. Different industries should start incorporating blockchain into their business strategies so as to not fall behind.
Industry-wide blockchain initiatives can open-up new business opportunities and application across multiple domains. Whatever strategy an organization deploy, this is for sure that being a first mover on blockchain in their respective industry will give them an edge over their direct competitors.
By Mr. Anil Awasti, Global Head, Retail Banking Practice, Virtusa Corporation