Blockchain has reached such a level that its use goes far beyond digital currency and banking services. This technology solves business problems in various industries, from healthcare to manufacturing. Let’s take a look at the main sectors of the economy where innovation brings maximum advantages to enterprises and tangible benefits to customers. Here are blockchain business ideas that are relevant in 2022 and will remain popular in the future.
Initially, blockchain solutions were developed in the financial industry. However, security, decentralization, the immutability of records, and other innovative features can be successfully applied in different sectors of the economy. 45% of organizations use distributed ledger technology for the secure exchange of information, 16% for cross-border payments and settlements, and 10.7% for tracking the origin of goods.
As a result, global spending on blockchain will grow from $7 billion in 2021 to $39.7 billion in 2025.
Blockchain business ideas and prospects in different industries
The rapid growth of the cryptocurrency market has stimulated the interest of enterprises in blockchain solutions. Cooperation with a blockchain development company and the creation of dApps have become the priority areas for the development of businesses. As Nasdaq CEO Bob Greifeld noted, “Blockchain is the biggest opportunity set we can think of over the next decade or so.”
Let’s consider what blockchain applications firms are developing to optimize business processes.
Blockchain in the supply chain
Blockchain greatly increases the efficiency of processes that can be thought of as a supply chain. In this regard, logistics is a suitable candidate for transformation.
The supply chain faces the following challenges:
- effective management of the delivery from a supplier to a customer;
- exclusion of intermediaries from a network and cost reduction;
- tracing goods and avoiding data falsification;
- establishing trust between network participants and reducing the number of errors in the delivery processes;
- protection of payments from cyber threats within a network.
Blockchain applications simplify complex logistics processes:
- Blockchain establishes trust between network participants and automates the execution of transactions.
The blockchain structure is based on a decentralized network, database immutability, block hashing, smart contracts, and a consensus. This means that each participant has access to a copy of a database displayed as a chain of blocks with transactions recorded in them. It is impossible to change or delete information in these blocks.
Each block is protected by a hash function that converts the entries into a sequence of numbers that is extremely difficult to guess. Network members act according to the rules of a consensus. Their execution is monitored by a special program — a smart contract that automates transactions. Members of the network are equal. A transaction is carried out only if 51% of users vote for it.
For the supply chain, this means that shippers, consignees, warehouse managers, carriers, and other participants will cooperate honestly. No one will change the information about an order and will not hide data about lost or damaged goods. All transactions are recorded in blocks, and each participant has access to a transaction archive. If incidents happen along the way, they are easily detected and resolved.
- Blockchain ensures supply chain security.
When two participants initiate a transaction, a blockchain validates it and creates a hash-protected block. The new block is embedded into the chain, a transaction is carried out, and the ledger is updated. It is almost impossible to crack such strong protection. The blocks are decentralized, so you need to “open” them one by one. To decipher one block, you need a powerful computer that can sort out billions of combinations of numbers. Even if an intrusion occurs, network participants will notice a violation of the agreement and reject the transaction.
Blockchain also protects the supply chain from corruption and data falsification. It is difficult to steal documents or goods because each step of the participants is recorded in blocks. In a transparent chain, it is easier to detect scammers.
- Blockchain improves the transparency of supplies.
Blockchain increases consumer loyalty, as clients gain access to information about the supply chain. Customers can track the origin of goods and their components, evaluate product quality and storage conditions, and make sure that a product meets quality standards and is worth buying.
Blockchain applications make it easier to monitor the movement of cargo through the supply chain. Partners can view product information in real time as well as study electronic documentation.
According to IBM calculations, the transparency of deliveries will bring certain benefits to enterprises. Automakers will cut costs by 10% or more. And upgrading inefficient logistics operations by 3% will reduce working capital costs by up to $6 million.
Blockchain in retail
The pandemic that broke out a couple of years ago and quarantine restrictions boosted Internet sales. In June 2020, online stores were visited 22 billion times, although six months earlier there were 16.07 billion visits. Statista notes that the figures surpassed even the statistics of the festive season. Such trends have pushed retail players to refine business ideas with the help of blockchain to improve the level of customer service and beat the competition.
Blockchain app development will help the retail sector to:
- Manage supply/demand and increase sales.
If a seller delivers products without considering consumer demand, this slows down sales and disrupts processes in the supply chain. Supply/demand imbalances cause popular goods to be in short supply and unwanted ones to be in excess. To solve this problem, retailers are creating blockchain networks that involve warehouse managers, suppliers of goods, manufacturers of products and raw materials, and carriers.
In a blockchain, sellers track the history of sales and analyze stock balances. They know at what time they need to reorder a certain batch of goods to satisfy consumer demand and not lose money.
- Optimize transactions.
Cross-border payments and transfers can take up to 2–3 days. They involve different banks with their own rules. According to World Bank estimates, the average commission is about 6.51%. Transferring large amounts of money in this way is expensive and time-consuming.
Blockchain makes it easy to transfer, buy and sell online. Financial enterprises like Ripple Labs Inc. are creating blockchain payment systems. Banks join a distributed ledger network and store money in tokens. A transaction takes no more than 5–7 seconds, the fees are lower, and the sender and the recipient see the payment route.
- Strengthen customer confidence
Corporate Bank Research October 2020 found that 71% of consumers check the origin of the product they are about to buy. They need to know that the product is of high quality and worth the money.
When a seller reveals the sources of raw materials and the origin of products, customers appreciate it. They like being taken care of. Carrefour, a French retail corporation, uses blockchain to let consumers track products. By reading QR codes on packages, they will find out how and where the chickens were bred, whether antibiotics were used to treat them, where the meat was processed, and whether it has a quality label.
As a result, customers begin to trust the company more and buy products 4% more often. In addition, the seller reduced the operating costs by 10% and the inventory by 30%.
- Prevent fraud.
The PwC Global Economic Crime and Fraud Survey found that 47% of businesses were attacked in 2020. Hackers seek to steal confidential information to buy goods on the Internet on behalf of someone else.
Blockchain can be used to protect the personal data of online store users. To do this, consumers register on an identification platform, issue a DID (decentralized identifier), and create private and public keys. A key pair is involved in identity authentication: the public key verifies that the owner of the private key has completed a transaction. Keys are also used to encrypt and decrypt information.
Blockchain participants can use an ID in the form of a QR code to verify their identity, pay for goods or transfer money. A seller verifies the identity, a user signs a transaction with their private key. An operation is successful if these keys match.
William Mougayar, a blockchain expert, points out that “in the blockchain world, each user can and should own their data, and ‘central’ players are less vulnerable to data losses and breaches”.
Healthcare is one of the industries that generate a lot of information (from case histories to global studies). Also, medicine is one of the five areas most susceptible to cyberattacks. This means that the security and scalability that blockchain provides can be fully used to optimize industry processes.
The pandemic has posed the problem of data leakage in the healthcare industry. In 2020, there were 119 attempts to steal medical records. In addition, there were disruptions in the supply of medicines and vaccines. Blockchain solves these and other problems:
- It protects electronic health records.
If a country does not have a digitized medical database, and the information is stored in paper documents, this complicates the treatment of patients. Medical records are kept in clinics. To get an appointment with a doctor in another institution, a patient must request information in advance. Sometimes it is lost in a pile of other documents. This complicates the diagnosis of diseases and forces patients to repeatedly undergo certain procedures.
When a country has an eHealth system, it simplifies the treatment of patients but does not exclude problems with data security. A healthcare provider is required to protect patient records under HIPAA. Sharing data is still not easy, and outdated technology in clinics creates additional security vulnerabilities in EHRs.
Blockchain can become a digital medical record of a patient. Thus, each doctor, pharmacist, or laboratory assistant can add a new record of their condition. Thus, an archive of case histories from birth to old age is created. A card on a blockchain is securely encrypted. The owner can provide temporary access to medical staff from anywhere in the world. You do not need to request paper files by fax or access to your EHR.
- It helps track the origin of medicines.
The World Health Organization has found that one in ten medical products in low- and middle-income countries is fake. They can be found in pharmacies, hospitals, clinics, and on the Internet. Falsified medicines are killing hundreds of thousands of people around the world.
Blockchain applications have the potential to prevent human accidents. With their help, you can set up transparent supply chain management. Manufacturers, carriers, hospitals, pharmacies, and others join a network and make entries at every step of the supply chain. A recipient can track which region a medicine is delivered from, how many pieces there are, what the composition of a product is, and so on. Embedded IoT sensors will be able to transmit information about the conditions of cargo storage to ensure that the goods do not deteriorate in transit and that patients are not harmed by this.
Development of blockchain applications for education
The COVID-19 pandemic has boosted the digital transformation of education as well. Schools, colleges, universities, and training centers were forced to urgently switch to distance learning. Digital platforms worked before the pandemic, but the new conditions forced them to transfer their studies to an online format using technology.
Blockchain does not stand aside and helps to:
- Keep digital diaries, report cards, and diplomas.
Since 2017, the University of Melbourne has been keeping records of student progress in a blockchain application, and Massachusetts Institute of Technology is issuing digital diplomas. Entries in a registry cannot be changed or stolen because blockchain protects them with encryption and a smart contract. Students can view their progress at any time. Using a digital diploma, employers check the veracity of the words of applicants and make sure that a candidate is suitable for a position.
- Protect the authorship of publications or open educational content.
Publications or educational content stored on a blockchain are timestamped and contain the names of authors. All changes that are made to a resource are tracked. The genesis block indicates who created a document and when. Stealing content and attributing it to somebody else will not work as the authorship is always reserved for the creator.
Today, cars are not just a means of transportation. They have become more complex — these are network-based software platforms on wheels. Blockchain can support the maintenance of such cars:
- It makes connected vehicles more convenient.
Users expect to be able to pay for car-sharing and use other mobile services in connected cars. Major automotive companies are collaborating with IT partners and banks to implement a blockchain-based automotive e-wallet service. With it, drivers will be able to pay for car rental, road taxes, gas station services, parking, and so on. For example, Ford uses blockchain to collect and track information about emissions of harmful substances into the atmosphere.
- It helps to monitor the quality of manufactured auto parts.
Parts for car assembly are supplied all over the world. This is a complex and large-scale process, which is difficult to track. Transparency in the car supply chain helps prevent counterfeit parts from entering production and causing product recalls. Blockchain applications for supply chain management help build traceable logistics. All participants in the chain are online and create records in blocks that are stored forever in a blockchain. And if at some stage a fake part is found, it is easy to identify its manufacturer. Blockchain also supports transactions within the supply chain. Smart contracts automate payments when consensus conditions are met.
Blockchain in other areas
Blockchain application development is not limited to the areas mentioned above. The technology can be applied in any sector of the economy where you need to store data, pay for services or goods, check transactions, track the movement of products, and so on. Here are some blockchain business ideas:
- Government sector. A blockchain application can ensure the integrity of voting in elections. When a participant votes, an entry is created in a block that cannot be changed or faked.
- Charity. It ensures the integrity of online charity events. Each altruist who made a donation can track how much money was collected, where it went, whether it was spent properly, and so on.
- Copyright protection. Applications that allow digital documents to be apostilled are already in operation. You can upload a photo, audio, or text file to a blockchain. The author receives a certificate with the address of the transaction that keeps the information about this file (number of bytes, characters, and other parameters) and about the owner who uploaded it.
- Telecommunications. To prevent clients from deceiving operators by using certain services for free (for example, roaming), blockchain helps to record the date and time of the start and end of a call. So, an operator will be able to track how much time and money a subscriber spent on a call.
- The Internet of things. Some users hesitate to trust IoT devices because they are concerned about the reliability of information storage. Blockchain removes these fears because the data that connected devices collect is stored securely on a network.
- Agriculture. Agricultural products (milk, meat, or eggs) are exported. Customers need to make sure that the products are of high quality:
- an animal or a bird was properly taken care of;
- farmers did not overuse antibiotics while treating livestock or poultry;
- products are gathered correctly;
- products have been kept under appropriate conditions, and so on.
Blockchain will not allow sellers to fake data to look better in the eyes of customers.
In this article, we have presented only a small number of blockchain business ideas. This technology can not only increase the competitiveness of enterprises but also globally change society.
There is no need to introduce blockchain everywhere because it is trendy. Technology brings value to a business when it is applied correctly. You need to understand what problem it will solve and how. To successfully create and implement innovation in business processes, it is worth enlisting the support of an experienced blockchain development company. Such an IT partner will advise on how to optimize internal operations and properly adopt blockchain.