Real World Use Cases for Blockchain Technology

17 min readAug 23, 2023

Introduction

A blockchain is a type of decentralized database technology designed to provide a secure and unchangeable record of transactions. It is used to record transactions across multiple computers in a way that ensures security, transparency, and immutability. Groups of transactions comprise a block, the contents of which, in theory, can never be changed. Each block is timestamped and joined to the data filled block before, forming what is known as a blockchain. It is a distributed ledger wherein participants agree on each transaction’s “truth” and verify the legitimacy of the transaction, before it becomes a permanent record in a block.

Blockchain was originally most known as the underlying technology for the cryptocurrency Bitcoin, but its applications have since expanded far beyond digital currencies. With its ability to create more transparency and fairness, while also saving businesses time and money, this technology is impacting a variety of industries in ways that range from how contracts are enforced, money is transferred, goods are verified, to making governments and institutions work more efficiently.

Before we dive into some of the real-world use cases of blockchain technology, I want to highlight some key characteristics.

Key Characteristics of Blockchains

1. Decentralization: A blockchain operates on a decentralized network of computers (so-called nodes), rather than relying on a single central authority. This decentralization helps to enhance security and reduce the risk of a single point of failure.

2. Distributed Ledger: Transactions on a blockchain are recorded in a chronological order on a distributed ledger, which is a shared database that is replicated across all participating nodes in the network.

3. Consensus Mechanism: To validate and add new transactions to the blockchain, a consensus mechanism is used. Different blockchain networks use various consensus algorithms, prominent examples include Proof of Work (PoW) or Proof of Stake (PoS), to ensure that all nodes agree on the state of the ledger.

4. Security: Transactions on a blockchain are secured using cryptographic techniques. Each block of transactions is linked to the previous block through a cryptographic hash, creating a chain of blocks. Once a block is added to the chain, it becomes very difficult to alter any information within it, enhancing security and tamper resistance. This creates a transparent and auditable history of transactions, making it useful for applications where trust and transparency are crucial.

5. Smart Contracts: Some blockchains support the concept of smart contracts, which are self-executing contracts with the terms directly written into code. Smart contracts automatically execute and enforce the terms of an agreement when predefined conditions are met. The software code follows relatively simple logic to ensure that all parties receive the benefits or penalties stipulated in the contract. The blockchain makes a permanent record of every action related to the transaction.

Smart contracts are like regular contracts except the rules of the contract are enforced in real-time on a blockchain, which eliminates the middleman and adds levels of accountability for all parties involved in a way not possible with traditional agreements. This saves businesses time and money, while also ensuring compliance from everyone involved.

6. Public and Private Blockchains: Blockchains can be categorized into public and private blockchains. Public blockchains are open and can be read and participated in by anyone, while private blockchains are restricted to a specific group of participants and are often used by businesses for internal purposes.

These are all important characteristics to keep in mind when thinking about how this technology can be used in and disrupt different industries. I will touch upon blockchain use cases in financial services, healthcare, government, supply chain management, media & entertainment and real-estate. However, it’s important to note that while blockchains offer many benefits, they also come with challenges and limitations, such as regulatory and user safety concerns, as well as the challenge that this technology is still developing, so a variety of technological flaws, like scalability-related issues remain.

Real-world Use Cases for Blockchain

Essentially, most industries can use blockchain, as running a business more efficiently is just one part of the benefits that can be gained from blockchain applications. The need to preserve data integrity and the ability to build new revenue or business models are often mentioned as main drivers for real-world uses cases of blockchain adoption.

Here are some notable applications of blockchain in the public and private sectors:

Financial Services

Blockchain technology is used in many types of financial applications. I will touch upon capital markets, asset management, payments and remittances, banking and lending, trade finance, insurance, and compliance.

Capital Markets

Blockchain technology has a significant impact on capital markets, where issuers seek capital from investors with corresponding risk and return preferences. The challenges faced by firms include strict regulations, lengthy market entry processes, interest rate volatility, and liquidity risks.

Blockchain addresses these challenges and offers several benefits in capital markets, for example, by enhancing issuance speed and enabling the creation of digital representations of existing securities and new digital assets. Even the fractionalisation of real-world assets is possible. Blockchain technology also facilitate faster and customized trading through various mechanisms.

Furthermore, smart contracts automate clearing and settlement, as they match payments to transfers, offering various settlement models. Smart contracts can also help collateral management to become more efficient.

Exchanges benefit from improved compliance, trade matching, and data verification and new primary and secondary markets for enhanced liquidity are possible.

Post-trade processes become more secure and efficient, reducing costs. Asset servicing can be automated, and custody safeguarding enhanced.

Overall, blockchain offers transparency, security, reduced costs, and innovative possibilities for new financial products and instruments in capital markets.

Asset Management, Venture Capital, and Private Equity

Funds are facing demands to improve liability risk management, adapt to more dynamic decision-making structures, and address the increasing complexity of ever-changing regulations. Blockchain technology can streamline asset and stakeholder management in funds through automated fund launches, digitized portfolios for wider market access and liquidity, customizable privacy settings for transaction confidentiality, integrated voting and shareholder rights into digital assets, improved governance, and better cap table management.

Global Payments and Remittances

Global payments and remittances today are executed by several intermediaries that receive fees for their services. Blockchain technology can streamline payment and remittance processes, reducing settlement times and significantly reducing costs. Blockchain technology can enable rapid and secure domestic retail payments and settlement, as well as cross-border payments. Furthermore, blockchain technology enables real-time gross settlement between central banks, commercial banks, and independent banks, uses digitized KYC/AML data to reduce fraud risks, and supports various payment forms including tokenized fiat, stablecoins and crypto.

Banking and Lending

Core banking comprises of transaction, loan, mortgage, and payment services. Many of these services depend on legacy processes for execution. Blockchain can streamline banking and lending services, reducing counterparty risk, and issuance and settlement times. Blockchain can facilitate authenticated documentation and KYC/AML data for real-time verification, enhances credit prediction and scoring through network data, automates syndicate formation, underwriting and disbursement, and enables collateralization of assets with real-time tracking and regulatory controls.

Trade Finance

Trade finance refers to the infrastructure, processes and funding that support international trade supply chains. The industry continues to rely on paper-based processes that are susceptible to security vulnerabilities. It can take as long as 120 days to process letters of credit, verify documents, and establish trust among stakeholders. Blockchain digitizes trade finance processes, enhancing security and efficiency. Real-time verification of financial documents, faster settlement times through asset digitization, efficient financing structures, and consistent financing vehicles for the entire trade lifecycle are enabled via blockchain technology.

Insurance

Property and casualty insurance claims are prone to fraud and claim assessments can extend long periods of time. Blockchain can securely streamline data verification, claims processing, and disbursement, reducing processing time significantly. Blockchain technology can use authenticated documentation for fraud detection, automate claims processing through smart contracts, and enable tokenized reinsurance markets for policy reinsurance in open marketplaces, stepping away from traditional broker and relationship-based systems.

Compliance

Regulatory compliance has become increasingly important in the commerce and finance space. It is necessary to ensure that financial institutions respect laws, rules, and regulations applicable to their activities. Blockchain facilitates regulatory compliance by offering unique governance attributes in digital assets, creating incentive structures for real-time network governance and automating data verification and reporting.

In summary — blockchain is especially popular in the financial services industry due to the money and time it can save companies of all sizes. By eliminating bureaucratic red tape, making ledger systems real-time and reducing third-party fees, blockchain can save players in the space lots of money. The digitization of financial instruments provides unprecedented levels of connectivity and programmability between products, services, assets, and holdings. These digitized instruments can redefine the processes of commercial and financial markets, creating a new paradigm where value is brought at every touch point.

Healthcare

The potential applications of blockchain technology within the healthcare sector are vast and encompass several significant use cases, offering the potential to address numerous challenges and bring about substantial benefits. These use cases include the management of electronic medical record data, the protection of sensitive healthcare information, the safeguarding of genomics data, increased protection of patient safety and treatment outcomes, and the monitoring of disease outbreaks.

The healthcare industry, marked by decades of evolution, has been affected by the advent of centralized data systems, health data regulation, and a mandate to focus on digitizing medical data in partnership with different electronic medical record service providers. The bulk of repositories processing information owned by healthcare providers, pharmaceutical companies, and other stakeholders in the health and medical ecosystem, do not interact with one another, hindering effective data sharing. Consequently, patients are burdened with redundant medical procedures and high costs due to fragmented information, and medical professionals may lack crucial insights into a patient’s medical history, posing risks of improper treatment.

Blockchain technology offers potential solutions by enabling secure and seamless sharing of medical data, with privacy and permission layers, and enhancing patient care in emergency scenarios. Patients cannot alter medical information entered by doctors, but they can control access by granting visibility permissions to different healthcare stakeholders. This allows patients to share complete records with specialists and limited, non-identifiable data with research firms or healthcare organizations.

Furthermore, blockchain can play a pivotal role in drug traceability, crucial for preventing the distribution of counterfeit or illicit drugs. Counterfeit drugs can lead to altered ingredients, unauthorized proportions, and unknown side-effects, jeopardizing patient safety and treatment outcomes. Blockchain’s immutable and transparent ledger can securely track the origin, composition, and chronological history of substances, mitigating the risks associated with unauthorized production and transportation of certain substances.

In clinical trials, blockchain technology can mitigate data fraud risks by preventing hacks and manipulations. Documents gain proof-of-existence and authenticity verification on the blockchain. Consensus among nodes validates new transactions and safeguards data integrity, fostering reliable trial results and promoting collaboration among researchers.

Lastly, blockchain technology can incentivise positive behaviours, as smart contracts enable the implementation of micropayments to incentivize, for example, specific patient behaviours. These contracts can be programmed to reward patients for adhering to treatment plans or sharing data for clinical research purposes. This mechanism leverages blockchain’s capabilities to encourage desired actions while ensuring transparency and trust.

I only touched upon a few examples of use cases within the healthcare sector above, but in summary, the application of blockchain technology in healthcare addresses key challenges, such as data security, consent management, and traceability, while introducing innovative ways to enhance patient engagement and research collaboration. Blockchain technology can facilitate a reduction in healthcare costs, better information sharing among various stakeholders, and streamline operational processes.

Government & Public Sector

Blockchain technology offers various use cases in government agencies and the public sector, leading to enhanced security, transparency, efficiency, and accountability.

Firstly, as blockchains cannot usually be forged or their data manipulated, blockchains provide secure storage for digital IDs, certificates, and passports, ensuring transparency and protection against data manipulation. This also enhances security for international travel and personal identification. Citizens are in theory enabled to not have to show all aspects of their ID, but only the information that is needed for a particular verification process. Storing personal, academic, and professional data on encrypted identity wallets is an example that can empower individuals to control access to their data.

Secondly, blockchain enables decentralized, transparent, and secure voting, reducing the risk of manipulation and fraud. This approach eliminates the need for intermediaries and promotes trust in electoral processes.

Thirdly, blockchain technology can enhance bureaucratic efficiency, accountability, and financial transparency. It has the potential to streamline processes, reduce costs, and provide a transparent record of government activities through smart contracts.

Furthermore, blockchain, in combination with technologies like IoT and cloud computing, can enable the creation of secure and efficient smart city infrastructures. The technology facilitates interoperable services and functions, arguably having the ability to improve the delivery of services to citizens.

Schools, universities, and employers could use blockchain technology to be able to validate achievements, enhancing data integrity. Blockchain-based smart contracts could manage loan and grant applications, track compliance, and automate performance tracking. This could enable real-time data, transparency, and security in student financial assistance.

Lastly, smart contracts can streamline tax collection by automating the matching of tax data with income transactions, calculating deductions, and transferring payments securely. This approach could bring efficiency, speed, and security to tax collection processes.

Overall, blockchain’s application in the public sector holds the potential to revolutionize various government functions, making them more efficient, transparent, and secure. I was only discussing select use cases within a plethora of other options. Generally, the technology can lead to improved citizen trust, reduced administrative burdens, better data management and enhanced service delivery.

Supply Chain Management

Blockchain technology offers significant advantages in improving supply chain management and addressing issues within complex global supply chains. Blockchain is a good fit because complex global supply chains have no central authority and lack visibility. Companies involved in a supply chain can benefit from transparency and an immutable record of transactions.

Blockchain’s transparency and immutability are particularly suited to trace the journey of goods from source to consumption, providing accurate sourcing information and combatting counterfeiting or the provision of incorrect information to the buyer/consumer. Blockchain technology helps verify accurate and ethical sourcing of products and helps to prevent fraud in certifications and official documents, creating greater trust among participants. The authenticity of data can be verified by third-party attestors, enhancing credibility further. Important to note is also that blockchain could bring transparency and accountability to industries like fashion and food, addressing and exposing ethical concerns related to labour and environmental practices.

Enhancing traceability for, for example, product recall processes by locating affected products swiftly, can significantly reduce costs, and prevent injury or illness. The technology allows tracking of both digital and physical products throughout their lifecycle and enables automation of reporting, reducing errors and costs associated with manual activities.

The technology also facilitates efficient ownership verification and licensing, ensuring accurate licensing of services, products, and software, and payments can be made without delays through automated smart contracts.

In this section I also want to touch upon logistics and international trade. International trade encompasses the exchange of capital, goods, and services across borders, amounting to a several trillion-dollar market. It’s divided into two main categories: about 75% comprises various goods shipped via containers or ground transportation, while 25% involves commodities. The trade and financing industry faces trust and coordination issues between exporters and importers, particularly in emerging to developed markets. Operational inefficiencies also stem from complex processes and reliance on manual, paper-based methods.

Technological advances have been slow in this sector, but blockchain technology is now emerging as a transformative solution. Start-ups and companies have attempted digitalization with limited success, but blockchain’s potential impact on logistics and international trade have motivated the industry to modernize. Blockchains enable document tokenization, facilitate smart contracts for automation, and enhances coordination between trade parties. Its global adoption promises benefits in cross-border coordination, trade settlement, and standardization. Blockchain’s potential to establish a single source of truth in e.g., the very fragmented shipping industry enhances data transparency, builds trust, and streamlines logistics processes, potentially saving billions of dollars annually.

In summary, blockchain’s features like transparency, immutability, and automation offer solutions to various challenges within supply chain management, international trade, and the logistics industry. From tracing product origins to enhancing regulatory compliance and enabling tradability, blockchain has the potential to revolutionize these sectors and supply chain management is often hailed as one of the most obvious real world use cases of blockchain technology.

Media & Entertainment

The media & entertainment industry is a rich arena for blockchain use, and the applications are as imaginative as the industry itself.

Many of the current problems in media deal with data privacy, royalty payments and piracy of intellectual property. The digitization of media has caused widespread sharing of content that infringes on copyrights. Blockchain’s strength in the media industry is its ability to prevent a digital asset, such as an mp3 file, from existing in multiple places. It can be shared and distributed while also preserving ownership, making piracy virtually impossible through a transparent ledger system. Additionally, blockchain can maintain data integrity, and musicians and artists can receive proper royalties for original works.

So, to clarify, this means blockchain’s impact in media and entertainment includes:

Helping artists and creators digitize content metadata, manage IP rights, and enforce ownership through immutable ledger records, reducing digital piracy and copyright infringement.
Disrupting and cutting out intermediaries prevalent in the advertising and media industry, enabling artists to upload, self-publish, and manage content directly, monetizing their content through smart contracts and micropayments.
Blockchain streamlines licensing, contracts, and payments, allowing creators to sell content directly to consumers.
Blockchain’s usage data tracking and micropayments allows for innovative consumption-based pricing models, offering alternatives to the existing subscription-based streaming services.

In summary, blockchain’s applications in media & entertainment hold the potential to transform the industry by reducing piracy, increasing earnings for creators, and offering innovative content distribution and pricing models.

Real-Estate

Blockchain has a transformative impact on the real estate industry, offering numerous benefits:

Blockchain technology enables tokenization of real estate assets, making them more accessible to investors and increasing liquidity. Digital assets can represent real estate properties, revenue streams, and governance rights.
Blockchain can also streamline industry operations, reducing friction and inefficiencies between different systems, resulting in faster and more efficient processes.
Process automation reduces costs associated with paperwork, intermediaries, and administrative tasks, leading to cost savings for all involved parties.
Real estate tokenization allows for broader asset distribution across the globe, providing access to a wider investor pool. And tokenized assets can be divided into smaller fractions, enabling fractional ownership, and allowing a wider range of investors to invest.
Increased connectivity and liquidity in tokenized assets can create secondary market opportunities for investors.
As blockchain technology increases transparency and data accessibility, this facilitates better investment decisions and portfolio management.

Overall, in the real estate industry, blockchain facilitates the digitization and programmability of real estate, transactions, and processes, including issuance, trading, and lifecycle management. It revolutionizes the industry by making transactions faster, more efficient, and accessible to a wider range of participants.

Ethics and Challenges in Blockchain

It is, however, important to note that there most likely will be regulatory hurdles and changes that will impact the feasibility of several of these use cases discussed in this blog.

In addition, blockchain technology, praised for its transformative potential across industries, also raises ethical concerns:

Privacy and Data Security: Despite being seen as private, blockchain transactions are visible to network participants, raising concerns about personal data control and potential misuse. It is important to note that the right data privacy measures need to be in place on a case-by-case basis.

Fairness and Accessibility: Blockchain’s potential to promote social and financial inclusion is unparalleled. It offers access to the global economy for those excluded from traditional financial systems, reducing costs and barriers. However, the current interface and applications utilising blockchain technology are difficult to use for less technically minded or interested individuals, which can exacerbate inequalities, leaving those without access to necessary resources behind and contributing to a digital divide. It is important that the UX and UI, as well as the useability of blockchain technology develops and becomes friendlier to use for everyone.

Cybersecurity, Hacking and Technological Developments: Decentralization poses an ethical dilemma, as it can be exploited for illegal activities. In addition, we are currently still seeing a lot of security breaches and hacks that show further technological development needs and appropriate regulatory oversight to protect consumers. Further it is important to note that a major issue with blockchain technology today is scalability as blockchain networks can be slow and inefficient due to the high computational requirements needed to validate transactions. As the number of users, transactions, and applications increases, the ability of blockchain networks to process and validate them in a timely way becomes strained. However, many teams across the industry are working on highly innovative ways to fix this problem.

Decentralization of Power: Blockchain’s decentralization disrupts traditional power structures held by governments and banks. It empowers individuals for direct transactions and collective action, impacting democracy and governance, potentially causing uncertainty and both highly impactful positive and negative knock-on effects.

Employment and Economic Impacts: Blockchain’s effect on employment is mixed; while it can cause job losses, it also opens opportunities in fields like blockchain development and cybersecurity. Novel economic models like DAOs and token economies hold potential for financial inclusion and alternative funding mechanisms.

Conclusion

Today, companies are zeroing in on how to use blockchains to generate new revenue streams and create rather than suffer from disruption, at least this is what I am starting to see.

The best blockchain use cases are the ones that let industries or companies take advantage of the efficiencies and new revenue streams created via blockchain technology without the need or requirement to move substantial chunks of their market with them. This creates a more manageable shift, and we are still at the point where all industries and companies can be an early adopter driving disruption, rather than being disrupted.

Many industries can utilise blockchain technology in the future and the ones touched upon today are just some examples. Today we showcased how blockchain technology could impact these industries, but we have a while to go before we will see how these ideas and predictions will develop.