©Shutterstock/Panchenko VladimirUsing blockchain technology to manage physical items in cyberspace
One of the earliest large-scale blockchain use cases was the management of supply chains. The process of managing products from the original producer all the way to the consumer is expensive and time consuming.With today’s product-tracking applications, it can be difficult for consumers to know much about the products they consume. Some products, such as electronics and appliances, may have descriptive tags that identify places and times of manufacture, but most products we consume don’t provide that type of information.
Implementing supply chain management provides multiple benefits. The first is transparency. Producers, consumers, and anyone in-between can see how each product traveled from the place it was manufactured or acquired to where it was finally purchased and the time it took to get there. Inspectors and regulatory auditors can ensure that each participant in the supply chain met required standards.
This increased transparency occurs while eliminating unnecessary middlemen. Each transfer in the process occurs between active participants, not brokers.
Proper tracking of physical products in the blockchain depends on accurately associating the physical product with the digital identifier. For example, recently a flyer checked his bag on a commercial airline. The agent was busily engaged in a conversation with another agent, and swapped tags from his bag with those of another traveler. His tag was attached to the flyer’s bag, and vice versa. When the flyer arrived, the airline discovered that the flyer’s bag, with the other person's tag attached, had flown to Mexico. Always remember that the blockchain only represents the physical world — it isn’t the physical world.
Using the blockchain to handle sensitive information
Health care has become one of the most popular topics of conversations, ranging from politics to research, to spending. It seems that everyone is interested in increasing the quality of health care while reducing its cost. The availability of large amounts of digital data have made advances in health care possible.Researchers can analyze large amounts of data to explore new treatment plans, increase the overall effectiveness of existing drugs and procedures, and identify cost-saving opportunities. This type of data analysis is possible only with access to vast amounts of patient medical history. The main problem for researchers is that a patient’s electronic health record (EHR) is likely stored as fragments across multiple practices and databases. Although ongoing efforts to combine these records exist, privacy is a growing concern (we’re back to the trust problem) and progress is slow.
EHR management is a good fit for a blockchain app. Storing a patient’s EHR in an Ethereum blockchain can remove the silos of fragmented data without having to trust each entity that provides or modified parts of the EHR. Storing the EHR in this way also helps clarify the billing and payment for medical services. With comprehensive medical procedure history all in one place, medical service providers and insurance companies can see the same view of a patient’s treatment. Full history makes it easier to figure out what should be billed.
Another advantage that blockchain apps can provide in the health care domain is in managing pharmaceuticals. Blockchain EHRs provide the information for medical practitioners to see a full history and current snapshot of a patient’s prescription medications. It also allows researchers, auditors, and even pharmaceutical manufacturers to examine the effect and possible real side effects of their products. Having EHRs available, yet protected, can provide valuable information to increase the quality of health care services.
Using blockchain technology to conduct financial transactions
Financial services are interactions that involve some exchange of currency. The currency can be legal tender, also called fiat currency, or it can be cryptocurrency, such as Bitcoin or Ethereum’s default currency, ether (ETH). Blockchain apps do a great job of handling pure currency exchanges, or exchanging some currency for a product or service. Financial services may center on handling payments, but there are more nuances to the many transactions that involve money.Another rich field for blockchain in the financial services domain is real estate transactions. As with banking transactions, Ethereum makes it possible to conduct transactions without a broker. Buyers and sellers can exchange currency for legal title directly. Smart contracts can validate all aspects of the transaction as it occurs.
The steps that normally require an attorney or a loan processor can happen automatically. A buyer can transfer funds to purchase a property after legal requirements are met, such as validating the title’s availability, and filing required government documents. The seller receives payment for the property at the same time the title transfers to the buyer.
Want to learn more? Check out our Blockchain Cheat Sheet.