Industries that Blockchain can disrupt

When we talk about the Blockchain technology in 2021 is like talking about the internet back in the 1970s. The first internet prototype according to history.com came in the late 1960s with the creation of ARPANET, or the Advanced Research Projects Agency Network which was originally funded by the US. Ministry of defense to allow computers to talk to each other. It was in 1989 that Tim-Berners Lee invented the world wide web or www as we know it in an attempt to help institutions and science organizations share information between them. Today the internet is a necessity in every household in USA and Europe while huge organizations are putting efforts to connect third party countries to the internet through various ways.

Some history

Blockchain was first defined as a concept in 1991 as "a secure chain of blocks" by cryptographers Stuart Haber and W Scott Stornetta. Since then a lot of attempts were made to create digital currencies that use the blockchain technology. Such an attempt was "Bit gold" which never succeeded. It was only in 2008 when a whitepaper was published online by the (up to this day) anonymous Satoshi Nakamoto and his idea of Bitcoin that blockchain's first implementation was a reality. In 2017 Bitcoin and cryptocurrencies exploded in popularity and by 2020 surveys showed that at least 1% of the entire population owned or uses some sort of cryptocurrency.

The Blockchain

Blockchain's idea at its core is the decentralization of information. Blockchain is basically a distributed ledger of transactions that is copied on every node on the network. New transactions are represented by a new block while each block contains some data, the hash of the block and the hash of the previous block.

The data stored inside a block depend on the type of blockchain. If we take the Bitcoin blockchain as an example, the block will contain data information about the Bitcoin transaction like who is sending the bitcoin, to whom it is sent and the amount of bitcoin to be sent.

A block also contains a Hash. A Hash value is basically a Block’s fingerprint. When the block is created in the first place it calculates the hash value. Now when a block is altered, this has to be recalculated and changed as well. Therefore, the hash value of the block makes it very easy to detect changes in a specific block and enables transparency on the entire network. The last element of a block is the hash of the previous block, hence the chain of blocks. 

In order for a new block to be added on the blockchain, network participants have to agree that the new transaction is valid and no blocks. This is called consensus. Since 2008 many new blockchains (Ethereum, Algorand, Tron) are designed by improving the Bitcoin's network in terms of scalability and efficiency but each blockchain has different consensus mechanisms. If you want to have a better understanding on how the Blockchain validates transactions and the different consensus mechanisms, check out this article

The Future

As we are still in the very early stages and organizations around the globe learn how the blockchain works, many industries can be benefited or disrupted from its potential. Below are the top 5 Industries I believe will be disrupted from this technology. If you prefer to have a more visual representation on the future of Blockchain check out this infographic.

Finance and Banking

We are already seeing that Decentralized Finance also known as DeFi is picking up pace and market share from our traditional financial instruments.

Imagine you want to send €1000 to a relative or a friend who is using another bank. The bank will charge you €25 to fulfill the transaction so you 'll end up sending them €975. What's worse, is the amount of time required for the transaction to be completed which can be instant if you are using the same bank, but it can take 3-4 business days if the recipient is overseas.

With decentralized finance and the use of smart contracts, people can send and receive payments through the blockchain network in a matter of seconds while "Passive Income" opportunities are offered from a number of DeFi layers.

Yield farming, Staking and Liquidity mining are already offered in the world of DeFi but as these are at very early stage are susceptible to hacks and loopholes in the smart contract. As the industry evolves and smart contracts are learning through the use of Machine learning and artificial intelligence, more and more people will be moving into DeFi and away from traditional Finance.

Healthcare

Scientific institutions are running research and clinical trials all over the world on a daily basis. At the current stage, clinical trial participants need to provide their consent for their data to be processed. On top of this, research centers are sharing their results to other institutions through encrypted e-mails or other traditional ways that can be corrupted or hacked.

The blockchain can improve the way consents are collected from the clinical trial participants and also get research results transferred across institutions in a secure but transparent way.

Results cannot be altered in any way without someone finding out and if a public permissioned blockchain is used, everyone will be able to see the transaction log but only few can participate in the consensus of validating transactions (i.e. information shared or signed consent) thus improving the current workflow of information sharing.

The public can also benefit in the healthcare industry if the industry adopts blockchain as medical information and prior incidents can be shared across private and public hospitals in a seamless and secure way.

So if you are traveling for vacation and you need to visit the hospital for any reason, the doctor that will be assigned to check your case can have access to all your medical information which can help the diagnosis and the treatment (if needed).

Supply chain

Everything we use, everything we wear and everything we touch, have some sort of supply chain process associated to them. The clothes we wear had to be shipped, sewed in factories, materials had to be ordered and so on and so forth. When we eat fish, that fish was at one point in the sea and had to pass a whole supply chain process in order for it to reach our dinner table.

Everything is centralized though; the materials being used for your branded t-shirt can truly be known only by the parent company and other parties involved. How your food is being processed can only be known from the people who process it (except from the eye-opening Netflix documentaries here and there).

Blockchain can resolve all of that and provide transparency on the supply chain which will help their reputation in the long term. Counterfeit branding will not be a problem ever again if every piece of clothing transaction is linked on the blockchain and can lead back to the original source. You will know exactly what you are eating since you will be able to track a can of tuna up to the point that tune was swimming in the ocean.

Even though there will be a lot of benefits for big companies all over the world to using the Blockchain, I believe this will take some time since being transparent can also destroy the reputation of a company. Imagine you can track everything, and you find out that a t-shirt you wear is sewed by a 12-year old kid in a third world country. This would damage that brand and with all the social media connected it would go viral in a matter of hours.

Construction and Real estate:

Construction requires a very big number of professionals being involved. If you are building a house you need an architect, interior designer, electrician, engineer, plumber, builders and the list goes on and on. And this is just for a house. Imagine having to build a company's headquarters or a skyscraper. The logistics alone would terrify a lot of people. So, how can you be sure about the quality of these people's work, how efficient they are or previous experiences?

Currently you just ask around and get referrals, so you won't know for sure until the project is done. Or how many times we hear of paperwork missing in public records or taking forever to complete and deliver the title deeds?

All of these problems are due to the lack of trust in the human nature and the fact that you can't track any of these by yourself. You just have to rely on someone else.

Implementing blockchain technology in construction and real estate can fix all of that. Imagine you are in the process of hiring stuff to build your house. You ask for each person's public key address on the blockchain and you can immediately track their experience, previous work, quality of work, feedback, reviews, complains and anything you might want to know.

Since these cannot be altered due to the technology's nature you can rest assured that you have a solid team for your house, or you need to find someone else. And once you are done with the house and want to start the paper work, you send it through the blockchain, and after couple of hours the participants (engineer's office, electricity authority, water authority etc.) reach a consensus and send you the title deeds in the form of a token.

Smart cities

As we speak and with the current technological advancements, smart cities are very easy to be implemented. Companies like Microsoft and Siemens are already working on this. However, the biggest issue of building as smart city is from my point of view cybersecurity. When everything is connected with company X software and that company gets hacked, then everyone is vulnerable to the hacker.

If I have a connected car and a security system connected to the network, the hacker can just take my car and see what I am doing in my house without me even knowing.

Blockchain technology's biggest feature is the cybersecurity it can provide. Due to its nature, if a block (in a smart city it can be a car's electrical "fingerprint", a street light, a parking sensor) is altered, then the blockchain participants (i.e. law enforcement, owners etc.) will know and not add the new block on the network, making it near impossible for a hack in a smart city.

Given the fact that even Blockchain networks have to be designed and architected by a team which will see that the security is airtight, human error is always possible which can open backdoors on the network. However, as the upside here can be much higher than the risk, blockchain looks like the reasonable bet to be the future underlying technology of smart cities.

Conclusion

Innovations will always come into picture by people who are crazy enough to believe they can change the world and they end up doing just that. Steve Jobs did it with Apple, Elon Musk is doing it with Tesla and SpaceX. Blockchain is surely a technology that can reshape the world in the coming decades. In 10 years from now, it might not even be in the form it is today. One thing is for sure, people always need time to research and accept anything new that comes in and change the way they interact or transact and once they do I think they will embrace blockchain and see the potential it holds.