How Blockchain Can Make Our Lives Better?

What is blockchain?

The Blockchain is an online distributed ledger which allows parties to conduct secure (encrypted) transactions on a decentralised platform where time-stamping ensures that every data is easily traceable. It functions on peer-to-peer networking where there is minimal interference of the third party.

Blockchain is not a concept, but a technical application to log data in a way that it cannot be changed or erased de-centrally. Blockchain will bring massive improvements in quality of service, efficiency and organisation for transport companies for current and future operations.

1.Financial Sector – Reduce Financing Cost

Blockchain technology assures in faster settlement and speeds up the financial transactions. Besides, it also offers more secure data management and smart contracts can be used to automate contracts for execution of rules and obligations, eliminating the need for costly intermediaries.

In future, we will enjoy an efficient financial system where the cross border transfers can be completed for seconds and in the absence of bureaucratic red tape that impedes the process. The blockchain technology can automate the reimburse of insurance claims are as soon as all the pre-set requirements have been met and ensure the settlement of payrolls by the deadline.

The Monetary Authority of Singapore (MAS) and Bank of Canada (BoC) have jointly announced that the successful trial of cross-border payments using blockchain technology and central bank digital currencies. They have concluded that there is tremendous potential to increase efficiencies and reduce risks for cross-border payments by leveraging blockchain technology.

2. Financial Sector – Reduce Financing Cost

The rising house prices have left fewer young first-time buyers able to own a home, exceptionally, the ability to fork out a substantial lump sum of money for the deposit on a house or even a condominium is challenging. Blockchain provides the ultimate solution for most of the young people who can’t afford to purchase a home. Lending loans via blockchain eliminates the need for a ‘middle man’ from the beginning, transforming the lending process more efficiently.

Moreover, the credit score of a person is another crucial evaluation criteria to get a loan approved from the bank. Prior to placing a deposit on a house, the bank could reject the loan due to an unsatisfactory credit rating, which seems unfair for many young people as they have yet to build a  good credit history for enhancing the creditworthiness.

In fact, without having a credit card might be harder for the applicant to obtain a loan as the bank has no proof of the payment history. One of the features on blockchains is to store the data from its creation to the completion, hence it can trace for more than just the credit score, but taking into consideration on other factors that may argue that actually, the applicant can be trusted with a loan.

3. Financial Sector – Bond Issuance

One of the most promising and transformative applications of blockchain is in the charity and business crowdfunding sector. In 2015, more than USD 34 billion was raised globally via crowdfunding, whereas venture capital funding approximately USD 30 billion a year. Furthermore, current trending shows that crowdfunding will surpass the venture capital in the next few years as the leading source of start-up financing. By leveraging blockchain technology, the person will be able to track their investment in real-time that where is the money leading to.

It offers an alternative for new start-ups and charities to guarantee the investors or donors that the funds will be appropriately used, adequately protected and not misused for criminal purposes by using the smart contract to automate the fundraising process.

In 2018, the World Bank launched the first public bond powered by blockchain, “bond-I” to examine the practicability of this technology in bond sales. Commonwealth Bank of Australia (CBAUF) has been assigned to manage the bond and raise USD 73 billion for the World Bank. World Bank imitate the similar blockchain-based bond issued by German automaker Daimler in 2017.

Blockchain can help to streamline the bond issuing processes, which has been heavily dependent on paperwork for the past decades. In Australia, the country’s stock exchange plans to replace the current stock clearing and settlement system with blockchain technology by the end of 2020.

4. Internet of Things – Real-time Data Exchange

The Internet of Things (IoT) is a network of interrelated computer devised with sensors embedded to allow the interaction from human and integrate the command into computer-based systems to enhance efficiency. IoT is probably the next evolution from the technology sector after AI and Machine Learning. The blockchain has the potential to realise the dream for IoT due to its ability in tracking billions of connected devices.

Based on a report released by IBM, blockchain technology is a game-changer for IoT that will help to establish trust between parties and devices, reduce costs, and accelerate transactions. The IoT will redefine the future of human living—agriculture, healthcare, transportation, security, mass production and etc. The blockchain will ignite the possibility for IoT devices to transfer data in real-time and settle payments seamlessly with negligible charges. All these transactions will be executed via smart contracts without involvement from third-party but only device-device interaction.

5. Artificial Intelligence – Data Sharing & Tracking

Artificial Intelligence (AI) is one of the trending topics to optimise complicated tasks and reduce the burden of human beings. In spite of its comprehensive applications in reality, we often encounter the issues to understand the decision making process by AI. The “black box dilemma” persists as we cannot track the internal operations of an AI. Hence, some of the experts are anticipating to explore a convergence between machine learning and blockchain technology.

Adoption of blockchain in machine learning enables the possible tracking of data to understand the decisions made by AI algorithms. Due to its data tracing and transparency properties, the programmers can now replicate the machine’s decision-making process as the data is much more trustworthy from the identified source.

Moreover, the potential for blockchain to offer highly-secured data-sharing could be more accessible. AI algorithms can be trained with more data without privacy concerns, hence improving obsolete models and more evolved models can be introduced to the public.

6. Public Sector – Data Tracking & Management Platform, Digital Voting

Government agencies are notoriously porous and records are always mismanaged, damaged or otherwise lost. Furthermore, the majority of the system in place now is inefficient and obsolete. A digital data management platform backed by blockchain would definitely transform the current process across multiple agencies in government. The potential application can be ranging from voter registration to safekeeping the social security records for improved data security and so on.

Recently, the UK government has outlined an action plan, including action on crypto-assets to combat financial crimes. Collaboration from all the related parties is confirmed to fund the project on longer-term to reform the Suspicious Activity Reporting regime. The establishment of crypto assets regime aims to tackle fraud, money laundering, bribery and corruption in both local and abroad.

7. Healthcare Sector – Data Management

Medical errors affect 1 in 10 patients globally. It is the third leading cause of death after cancer and heart disease in the United States. Medical officers often encounter difficulties in data retrieval, misfiling and missing of patients’ records due to the ineffective and manual medical record management system. With disruptive blockchain technology, electronic medical records can be kept safe and transferred more quickly. Blockchain systems can integrate individual healthcare networks to enable health practitioners to ease access to patients’ medical records. The usage of blockchain mechanism can help to regulate and ensure the use of medicine and prescriptions; hence, it allows the monitoring of substance abuse.

Besides to reduce the unnecessary diagnosis and treatment, patients will have full access to their records of medical history. In Taiwan, one of the renowned hospital – Taipei Medical University Hospital has launched a blockchain platform to store and secure medical records. Patients are allowed to request their medical records by logging into a password-protected mobile app.

8. Logistics Sector – Data Tracking

Blockchain technology offers a potent tool for logistics and transportation, especially in tracking items, recording their movement, and sending the data to all participants in the network. Every single step along the supply chains can be monitored digitally from the source of manufacturing to the end-consumer.  Another application of blockchain – smart contracts may even use to automate the invoice settlement and reduce the inefficiencies associated with the supply chain.

Blockchain technology enables the possibility to empower the customer with more data and tracking the products to their source. In a real-life case, Unilever, Nestle, Tyson Foods and several prominent retail companies are jointly exploring the opportunity to use blockchain in developing an ecosystem to track food supply chains and reduce food contamination with IBM.

9. Retail Sector – Source Tracking

The retail industry was fast to adopt disruptive technology into their daily operation and there are few exciting projects in progress. Majority of the blockchain-based developments are focused on product quality and branding. The concept is to use a blockchain, which is a unique token to trace a product from its first stage of production until it reaches the end stage of the life cycle for the end consumer.

For instance, EY, who is one of the “Big Four” professional services firm, has built a blockchain platform for a wine firm that will help consumers ascertain wines’ quality, provenance and authenticity. The TATTOO Wine Platform has developed using EY’s OpsChain solution for Blockchain Wine Pte. Ltd. Each bottle of wine will be given with its unique QR code, which will allow the public to scan and access to the production information such as vineyards’ names and locations, more details such as the types of fertilisers and the history of the logistics for processing and delivery.

The similar system can be applied to car manufacturers where consumers can trace a car from design to distribution. Apart from that, the luxury fashion industry has been especially eager to pursue blockchain systems to beat fake and counterfeits products.

10. Retail Sector – Eliminate Fraud from Internet Sales

In 2018, consumers from all around the world had purchased USD2.86 trillion from the internet; this contributed to 15.0% growth in 2018. However, this increased digital platform usage results in creating more loopholes for hackers to breach the data online. We should enhance the cybersecurity of the digital platforms which bring together consumers and retailers to keep the data from being penetrated.

One of the potential solutions is to utilise blockchain, where it offers a decentralised platform and allows transparent transaction while maintains a certain degree of privacy for users. This feature prevents anyone from spending a cryptocurrency more than once. The hackers can never penetrate millions of blockchain networks to alter the information as they need to get consent from the entire blocks along the chain for the changes. With the transparency and immutability in blockchain, it becomes the perfect tech tool in fighting against fraud.

Blockchains consist of millions of networks to store information on every transaction that has occurred in a block form and connect all the related blocks in a chain. Due to these unique properties, fraudulent conducts can be spotted instantaneously and ensure the security of the data. This is remarkably beneficial to not only the public sector to eliminate corruptions but also for private to prevent cyber-attacks and hence build trust with clients, which is crucial in expanding into a larger scale.

11. Energy Sector – Energy Trading Platform

Now, the energy sector is looking into exploring the possibility to develop an energy trading network by leveraging blockchain. A peer-to-peer energy trading platform is established and the renewable energy sources will then embed to the grid. The energy producers and other users who have generated excess energy can sell it to those who need it.

This online energy trading platform breaks the monopoly of large corporations in the trillion-dollar energy industry. However, it also creates an alternative source of income for many users and it is environmental-friendly as it eliminates energy wastage and making the planet greener.

In Singapore, companies can engage in the trading of renewable energy certificates (RECs) on a blockchain-powered system from utility provider SP Group. The firm can opt to offset their non-green energy source by purchasing RECs, which represents a unit of green energy produced from the wind or solar power.

12. Agriculture Sector – Source Tracking

It is crucial to have an efficient system in place to ensure food safety pertains to agriculture and consumption within the given short shelf-life of agro-products. The blockchain system can be used to track the source of food items and on-time arrival to their destination in perfect condition.

In large-scale plantation, we can track the status of crops to avoid any losses from the harvesting process. In the meantime, blockchain can be used to record the details as a prove for the adherence to regulations. It can help to unfold the potential for the Internet of Things; especially farmers will have the opportunity to utilise sensors in monitoring and tracking the growth and status of their crops.

13. Education – Digital Academic Transcripts

Blockchain is also disrupting the education industry across the globe. In 2018, the Massachusetts Institute of Technology (MIT) announced that students could opt to receive a digital copy of their diplomas instead of the standard hardcopy certificates. The students can access to the digital documents that can be verified by employers to ensure its authenticity and it is readily shared with friends, family, and prospective employers (MIT News) by using a free, open-source app called Blockcerts Wallet. The digital credential is protected using blockchain technology.  

In the year 2017, Sony Corporation and Sony Global Education (SGE) have jointly developed a blockchain platform to collate and manage students’ records from multiple institutions. This platform enables the school administrators, recruiters, and interested parties to verify the academic transcripts that were submitted to them are genuine. 

Written by Tan Yee Ming, Principal Consultant

Having more than 27 years in business, 27 Group is able to provide you with the access to investors for competitive funding needs while providing better ways to operate your business through financial and corporate advisory. We are the only 100% Malaysian owned local consulting firm that is fast, flexible and focused with unique expertise that blends of local socio-economic policy setting, engineering built assets globally and detailed in financial analysis.

We do project development integration to improve project returns and are committed to providing a sustainable environment for a better tomorrow. Our delivery model blends values important to humanity into business strategy through socio-economic transformation modules and we are passionate about building opportunities for the next generation to achieve their highest potential.

#rebuildinghumanity is 27Group’s vision to collectively rebuild our nation through assets we build (eg. infrastructure, real estate, hospitals) and natural capital (gas resources, plantations, human talent) using innovative and sustainable methodologies.

Speak and rebuild with us if you need fresh ideas or more efficient financing or project implementation to improve your KPIs: yeeming@27advisory.com.my