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Applications of Blockchain Technology in Different Industries

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Introduction

We have discussed the applications of Blockchain technology in the Music and Mortgage industries in our previous article. In this article, let us consider the applications of this path-breaking technology in various other major industries. For this article, the industries we chose to discuss are Diamond Industry, Identity ManagementeGovernment and Energy Sector.

Diamond Industry

Diamonds are one of the costliest items in the world. What are the issues that diamond industries face today? People buy diamonds, insure them, and some fraudulent people claim that the diamond(s) are lost. Insurance agencies lose billions of dollars in insurance fraud. Fraud might not only happen at the consumer end, but there is also a whole lot of supply chain involved. Diamond’s undergo different processes before they reach a retail store. Mining, cutting, polishing, and fraud might take place at any point in time. Once Insurance companies pay for the diamond, the insurance companies become the owners, and they can claim the diamond when found.

Blockchain can help the insurance companies in provenance tracking of diamonds. Right from the mining of the diamonds to the retail store, blockchain can hold the requisite details. In the polishing or cutting phase diamonds are given a microscopic serial number. They capture around 40 properties of diamonds using science like the amount of light refracted, cut, clarity etc. They might even take a picture of the diamond. All these parameters are stored in the blockchain. By doing this, we are essentially converting the physical asset into a digital asset for provenance tracking. The diamond industry has blood diamonds. Blood diamonds are such diamonds where they are sold for terrorism funding. Mostly diamonds from South Africa are blood diamonds. If the data is stored in blockchain buying, such diamonds can be avoided, and people can make sure that they are making the right purchase. Everledger is a company which tracks diamonds provenance from mines to jewellery stores using blockchain. They are tracking more than 2 million diamonds today. While this cannot be used for all the goods out there, they can be used for the luxury goods industry to improve security.

Identity Management

We use our credentials to log in to any website that we use today to identify ourselves on the internet. There are many issues currently with the current process that we follow. In this digital world, we have many such credentials to remember, and we try to make it simple by giving a password which we can remember easily. This makes hackers easy to hack, and most of our accounts get easily hacked. Most of the identifiers we use today are centralised. From government provided tax ids, drivers license to private ids, like the email id which we use to login to different sites provided by Google. The problem with the centralisation of identity is that the central authority can choose to take away the identity at any point in time. Also, since these ids are stored centrally at a place, if they are compromised, the vast majority of people’s data will be compromised. This data can be maliciously used.

Using blockchain, we can create decentralised identifiers (DID’s). These DID’s are globally unique with cryptographic properties like public and private keys which are readily verifiable. The DID’s can establish secure communication channels. The DID’s solve the current credentials usage issues we face today on the internet. There are many advantages of using decentralised identifiers. For example, if we need to share our certificates with a company for a job interview we are attending, we can store the certificates in a blockchain. Then we can share only the required DID with the company. By doing this, we are giving our consent to share our data with them. For opening a bank account, we need to show our KYC documents. If these documents are stored in a blockchain, we need not give a separate set of documents for every bank that we want to open an account with. If there are any updates to be made, like the change of address, you can visit a single bank. The blockchain can be updated and thus changing our details for all concerned accounts. In the same way, we can store all the critical documents in our life like passport, birth, death, marriage certificates in the blockchain.

eGovernment

There are many applications of blockchain in government. Dubai government declared in 2017 that it wants all the government documents to be in blockchain by 2020. Blockchain can be a perfect fit to achieve a corruption-free government. The government needs to maintain daily operations and activities, government assets like land records, buildings, etc., details of people, organisations and institutions, business transactions, and so on. All these are maintained in either digital or paper format. Government is often divided into different levels like villages, cities, states, country. Hence it is multi-institutional or multi-organization. Every level can build its own ledger data. Different access management policies can be implemented. Access can be given to different employees based on their roles. Data can be prioritised with varying levels of hierarchy. Highly secured data like social security numbers in the US can be classified as restricted access to prevent unauthorised access. Moreover, since we are implementing these records in blockchain, we can have transactions on who accessed the data with timestamps.

Government data is the major target for hackers. One nation tries to penetrate to another nations government database declaring cyber wars. We heard about Russia interfering in the 2016 US national elections. Processing of government data takes place at different levels as data is shared among various organisations. This leads to the duplicity of data. Data breaches can happen if multiple sets of the same data are present. All these types of issues can be eliminated if we have these documents in the blockchain.

Energy Sector

Even though it seems like Blockchain technology has most of its applications in banking and cryptocurrencies, it has a lot to do with the energy sector as well. Energy sector’s networked infrastructure is especially suitable for blockchain-based applications. With the IoT being developed rapidly, this industry might soon transform its operations to a vast network of devices that are connected to each other. All these devices can feed the data collected on to a blockchain platform which can capture information in real-time.

Blockchain can also be used in the energy sector as a peer to peer energy trading mechanism. With the ever-increasing use of electric vehicles, people can make use of their private charging mechanisms with the public without the involvement of any central authority for a fee using blockchain. Real-time coordination of electric supply and demand can be achieved by blockchain.

Bottom line

Hope you got the gist of the applications of this revolutionary technology in the industries discussed above. It is very important to remember that this would take huge investments in time, effort and money to adopt blockchain into any industry we have discussed until now. But it would be more than worth it as it makes the businesses in these industries more efficient and transparent. Got any questions? let us know in the comments below.

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