With all the hype surrounding Bitcoin and cryptocurrency, it can be easy to forget that it is the underlying technology – blockchain – that is the real gem.
With its append-only, distributed ledger architecture, blockchain technology enables never-before-seen levels of decentralisation, security, transparency and automation.
This, in turn, holds strategic importance for companies, fostering a plethora of benefits including reducing costs, increasing efficiency and engendering trust and fairness.
All aboard the blockchain
Increasingly, businesses across multiple different industries as well as governments from around the world are discovering the powerful potential of blockchain as a tool for digital transformation.
In 2021, banking, manufacturing, professional services, retail and insurance were the five sectors that led worldwide blockchain spending, according to a report by the International Data Corporation (IDC).
Additionally, US-based tech research firm CB Insights found that investment in blockchain start-ups surged by over 700% year-on-year to reach over USD$25 billion that year.
Corporate and institutional attention on blockchain is mounting, and the rate of interest is expected to see exponential increase as more real-world use cases emerge.
Already, some of the biggest and most successful companies in the world are using blockchain, and reaping the benefits.
Recognising the many benefits of blockchain technology, many governments have since jumped on the bandwagon to promote its use and create ecosystems around blockchain. One such example, is Singapore. Doubling down on its efforts to strengthen the nation’s blockchain ecosystem, a $12 million Singapore Blockchain Innovation Programme (SBIP) was launched in 2020 to align blockchain technology research with the needs of the industry through engagements with various stakeholders.
Air travel
There is a significant amount of personal data and highly sensitive information involved in air travel. Names, identity numbers, birthdays, credit card numbers, immigration details, and sometimes even hotel bookings and vehicle rentals, are required when making a booking.
Blockchain is well-suited to securing and reconciling such data, allowing a provider to offer enhanced safety, speed and convenience to customers. Airlines, meanwhile, can benefit from quicker verification and better management of tickets and sales, while creating more accurate and trustworthy maintenance logs.
Airline loyalty is another promising area. Singapore Airlines was the first to launch a blockchain-based airline loyalty wallet, KrisPay, in 2018. The wallet has now evolved to become Kris+, an integrated lifestyle, shopping and rewards app that allows users to earn KrisFlyer miles from everyday expenditure, or use their miles to pay at participating merchants.
The Kris+ app is powered by blockchain technology to facilitate onboarding of new partners and payment reconciliation, resulting in reduced cost and increased efficiency. This early adoption not only anticipates disruptions, but makes for easy integration or migration when full application takes hold – another progressive step from the leading air carrier.
Government and public records
Switching to blockchain for government and public records can not only reduce manual and paper processes, but it can also minimise errors and eliminate fraud while increasing accountability and transparency.
Several governments around the world are already leading the change towards blockchain-based models. For instance, the Swedish Land Registry is testing out using blockchain for land registration to fight fraud and reduce ownership conflicts, and deploying smart contracts to automate property sales. If you’ve heard of NFTs, then you’ll know that the digital token can prove ownership and authenticity with art. This can also be applied to items like deeds and papers as well.
In another example, the Indian state of Maharashtra has launched educational certificates secured and verified on blockchain in partnership with a homegrown blockchain startup. Besides being fraud-resistant and instantly verifiable, the digital nature of blockchain-based certificates will also reduce costs and other inefficiencies by doing away with the need to create, process and store paper records. Another example of this can also be found closer to home, where SMU Academy works with local firm Accredify to issue tamperproof and easily verifiable digital credentials for all participants. Besides being fraud-resistant and instantly verifiable, the digital nature of blockchain-based certificates will also reduce costs and other inefficiencies by doing away with the need to create, process and store paper records. Talk about going green too!
Blockchain technology has also made travelling abroad for Singaporeans less complex in this COVID-19 age. As travel takes flight again, HealthCerts – developed by GovTech in collaboration with the Ministry of Health – uses blockchain technology to issue cryptographically trustworthy documents that are easily verifiable and widely recognised by overseas immigration checkpoints.
Supply chain management
Supply chain monitoring and management have come into sharp focus in recent years, prompting corporations to look toward blockchain to solve some of the most important and pressing challenges.
One crucial area is food safety, which can be challenging to manage given the highly integrated and complex nature of modern food production networks. However, with blockchain’s ability to record, store and track data in a decentralised manner, contamination issues can be more readily traced to their root causes, minimising fallout.
Food manufacturing giants such as Walmart, Unilever and Nestle have partnered with IBM to integrate blockchain into their supply chains, with an eye toward reducing the estimated 48 million yearly victims of food-borne illnesses in the US.
On a related note, agriculture can also stand to benefit from blockchain integration. Besides safety and traceability, blockchain can also digitise transactions such as buying, selling and storing of grain, allowing farmers and producers to reap higher profitability.
A promising technology
We’ve only just scratched the surface of blockchain’s potential to transform businesses. There are several more real-world use cases and business scenarios in which blockchain can bring about improved outcomes for corporations and those they serve.
Despite the prospective benefits, blockchain is still a relatively new and unknown technology, with several competing blockchain projects to choose from. Additionally, the lack of common standards and clear regulations create major limitations on blockchain applications’ ability to scale, holding back mass adoption at present.
What this means is that while businesses can capture value from blockchain integration, care must be taken to properly evaluate blockchain projects to determine strategic use cases.
In order to do so, familiarity with the potential and limitations of blockchain is necessary. Understanding what blockchain can and cannot do for your business is key to selecting and designing a viable solution.
More importantly, understanding how to navigate blockchain development and implementation is necessary in order to manage the risk of investing in blockchain ventures at this early stage of the game.
Learn about the promise of blockchain, and how it can be a powerful tool in the digital transformation of your business. Find out more about our blockchain certification course for business professionals here.
