10 June 2022
3 min read
As companies use blockchain to drive greater transparency and precision across the digital information ecosystem, they’re amplifying awareness of the technology in sectors ranging from finance to infrastructure and even the entertainment sector. Here are the latest innovative ways in which companies are harnessing the power of blockchain technology in these three major domains.
Blockchain integration in finance has created the revolution of Decentralized Finance (DeFi). From a global perspective, banks serve as the critical storehouses and transfer hubs of value as digitized, secure, and tamper-proof ledgers, blockchains could fulfil the same responsibility, adding enhanced accuracy and information sharing into the financial services framework. JPMorgan Chase, the 200-year-old & world’s leading global financial services firm is facilitating to and fro real-time international payments with its clients through its JPM Coins. Other leading banks like Citigroup & Goldman Sachs are running trials with blockchain. It is a popular analysis that blockchain can rattle the $5 Trillion banking industry by disintermediating the basic services that banks provide, from payments to clearance and settlement systems.
Facilitating payments is highly profitable for banks. International B2B transactions alone are expected to reach a total value of $35T in 2022, according to Juniper Research, however, blockchain technology offers a secure and cheap way of sending payments that eliminates the need for verification from third parties and overpower processing times for traditional bank transfers.
Investing sector is also impacted by blockchain technology. We can see impact tokens integrated with smart contracts, incentivizing activities that support the UN’s Sustainable Development Goals. Disintermediation of capital formation is also adapted by the crowdfunding industry by giving pledgers the ability to directly fund creators.
Another finance sector absorbing the concepts of blockchain is mortgage/lending. Conventional banks/lenders provide loans based on credit reporting, however, blockchain provides a cheaper, more efficient, and more secure method to do the same for a broader pool of consumers, using a cryptographically secure, decentralized registry of historical payments; so consumers could apply for loans based on a global credit score. Moreover, the insurance industry is directing its blockchain applications on operational efficiency improvement. They are experimenting with blockchain to drive down costs, increase speed to market, and provide better customer experiences.
Infrastructure & Energy
Since blockchain could serve as a public ledger for a massive number of devices enabling them to mediate communication between them autonomously, several companies are incorporating this technology to allow any device to securely connect, interact, and transact independently, along with managing software updates, bugs, or energy management.
Construction is another highly regulated industry that employs a wide variety of tradespeople to take on very complex projects. It is a difficult and time-consuming task to validate their identities, quality of work, and credibility. A blockchain-based framework could resolve these issues by making it easier for general contractors to cross-reference and track progress across multiple teams. While sourcing construction materials from credible places and ensuring their quality could be implemented using blockchain technology, the incorporation of smart contracts simply automates issuing timely payments linked to project milestones. The application of blockchain in real estate can help with recording, tracking, and transferring land titles, property deeds, liens, and more, ensuring the accuracy and verifiability of all documents.
Energy management has been the most centralized industry historically. In the US and UK, centralization of authority to allow someone to transact in energy lies in the hands of established power holding companies like Duke Energy or National Grid or with a reseller that buys from a big electricity company. Blockchain’s distributed ledgers could minimize (or eliminate) the need for such intermediaries, changing the traditional energy-exchange process. An open-source blockchain platform would enable utility companies’ customers to transact in ‘decentralized energy generation schemes’ to generate, buy, and sell energy to other people.
Smart contracts of blockchain technology bring fairness in content sharing for creators, along with automatically disseminating the revenue on purchases of creative work according to predetermined licensing agreements. Moreover, the cost of video traffic by decentralizing video encoding, storage, and content distribution could dramatically reduce using blockchain disrupting Netflix, YouTube, and other players in the video distribution market.
In the world of gaming, blockchain enables gamers to attain a more even playing field for competing, getting rewarded, and exchanging digital assets, as digital tokens are securely exchanged for cryptocurrency without third-party investment. This model, termed Play-to-Earn, allows the gamers to use one perfected character or set of skills and items across digital worlds via blockchain’s distributed ledger, thereby quickly earning rewards and exchanging them through one decentralized source. NFTs and the Metaverse make the model more profitable to gamers. Axie Infinity, the NFT-based online video game, became very popular in 2021 as the players were not just earning tokens for in-game purchases, but also crypto exchange for real money. The game’s sales spiked from roughly $20K in Q1 2021 to a peak of $246.32M in Q4 2021.
There is also an urgent demand to reinvent social media networks as platforms where users are paid for the content they create, and they can also maintain anonymity. Blockchain technology and tokenization have also affected the art industry by giving a way to global access to the art market and reducing transaction costs.
As this new concept of blockchain technology grows, we will be looking forward to transformations in every sector of the global market. This technology has the potential to penetrate every barrier and establish a better structure for every sector.