Silicon Valley investor Marc Andreessen describes blockchain, the system that underpins the digital currency Bitcoin, as ‘one of the most fundamental inventions in the history of computer science’, and he’s right. 2017 is going to be the year it is tested, trialled, iterated and adapted to suit different industry sectors and business requirements.
This new tech on the block is capable of disrupting many industries and bringing new innovations into industries such as property, automotive, music, banking and healthcare, to name a few.
So how does it work? One way of understanding it is to think about how a Google Doc enables people to access and make updates in real time. No need to save over and send new files to all etc. as the next time someone opens the doc it will be the most up to date. The file automatically keeps a record of who made which changes and when, as that digital address is native to the cloud, not the local hard drive. Google Docs is to Microsoft Word what blockchain is to a traditional ledger system.
Organisations of all sizes are working with innovation teams and design consultancies to figure out how this ‘shared ledger’ concept can benefit their businesses. Blockchain can be implemented in different industry sectors to speed up processes, guarantee security, trust and transparency and keep accurate records that can be accessed by stakeholders, no matter where they are in the world. Here are five industries it is set to transform:
Buying a home is one of the biggest transactions in a person’s life, yet very little technological development has taken place to enhance or simplify the purchasing process. Blockchain could help homeowners, developers, estate agents and mortgage lenders keep a record of information relating to a property, which would be centrally located for anyone in the house buying and selling process to access. This would reduce hours of paper pushing and phone calls and create transparent information on the status and maintenance of the house before putting in an offer.
It can help with the whole purchase process, reduce fraud risks, and offer in depth transparency, making the mortgage process and transfer of ownership seamless and quicker. We’ve seen examples of Bank of China and HSBC launching mortgage services using blockchain, as providing a decentralised network to verify information, offers heightened security, accuracy and reliability and guarantees that the documents are incorruptible.
In a similar way to housing, tracking the value of second hand vehicles through blockchain would make purchases a lot easier for buyers and traders. Information on the car’s mileage, services, driving history etc would be accurate, and if the car was ever written off the information could be accessed digitally to salvage the new gearbox that was installed only two months ago.
Visa and DocuSign unveiled a blockchain prototype for car leasing making it easy to click, sign and drive away a leased car. The straightforward process lets the customer choose the car they want to lease and the transaction is entered on the public ledger. The driver then signs the insurance documents and lease agreement, all updated within the blockchain. It’s easy to see how this type of system could be applied to car sales and registration.
There has already been massive disruption in the music industry with services already being developed to allow listeners to purchase or download music using blockchain to pay the artist directly with no intermediary.
Ujo Music is the start up that worked with Imogen Heap in 2015 on her track ‘Tiny Human’ via blockchain-based distribution. Fans could download, sample and remix the song with payments going directly to Heap and her collaborators on the track.
In the age of streaming services, blockchain could show musicians, creators, fans, marketers and labels the data and dialogue involved in listening to their songs and albums. It can reduce piracy, remove intermediaries, and support licensing and rights management.
Artists would be much closer to their fans and over time they could influence and reward them. A truly democratic and commercially viable way of promoting music. Projects such as these are crucial in helping the music industry understand how blockchain could change its future and we expect to see more entering the marketplace.
Most big banks like to talk about how they are working with blockchain - especially within security. Indeed, a report out in February 2017 reveals that nearly half of all financial institutions are planning to or are already investing in blockchain, with over 80 percent of bankers stating they expect to see the commercialisation of the technology by 2020.
Blockchain promotes security and trust and allows all parties to work with one single reference point, which can cut manpower and middlemen costs. Examples of this in practice include Swissbank UBS and Barclays, who are both experimenting with it as a way to expedite back office function and settlement, while Chinese banks are hiring blockchain experts as the government pushes the use of the technology to combat fraud in the financial sector.
As with any new technology, there are stumbling blocks. Commercial banks may not want all that information to be managed by developers so private blockchains may need to be created. It’s important to take a collaborative approach so banking organisations can pool their resources, identify and share hurdles and resolutions.
Many healthcare institutions are unable to securely and accurately share information across platforms but better data sharing and collection systems could bring huge benefits to care services. Within healthcare, blockchain promises to address security and data integrity issues relating to patient information within healthcare providers, hospitals, insurance companies and clinical trials.
IBM Watson teamed up with the US FDA to trial a data sharing initiative to keep track of patients involved in a particular trial and they are going on to explore how a blockchain framework could potentially provide benefits to public health. In addition, startup consortium Hashed Health has raised an impressive $1.8 million to advance its work and drive blockchain innovation within the sector.
These are all promising developments for global healthcare and as organisations and investors begin to understand the benefits it can bring, we expect to see an increase in investment into funding, developing and testing blockchain services within this important sector.
Gideon Hyde is the founder of Market Gravity