Enrique Suárez
Co-Founder
MountX Real Estate Capital
/
Startup Contributor

How Blockchain Is Reinventing Business

By Enrique Suárez | Wed, 11/24/2021 - 14:15

Blockchain technology has many business and industrial applications. Taking a look at the nature of this technology, there are three main benefits of blockchain that can be implemented in a variety of industries, resulting in immediate cost reductions and the automation of multiple processes:

  1. Disintermediation of Trust
  2. Immutability of Records
  3. Self Executing Smart Contracts

Disintermediation of Trust

Disintermediation of trust happens when two or more parties are able to utilize blockchain technology to track, record, and execute transactions without trusting or knowing the opposite party. The concept of disintermediation of trust is based on the automation features that are nascent to blockchain technology as well as its ability to record transactions between parties that don't necessarily know or trust each other.

Immutability of Records

The second industry-disrupting benefit that blockchain brings to business and various industrial sectors is the immutability of records. The immutability of records in a blockchain is based on the concept of record-keeping transactions by storing data in blocks that are sequentially connected to other blocks, which does not allow third-parties to tamper with the information stored in initial blocks without modifying all of the blocks in the chain. The immutability of records allows many different industrial sectors to improve the maintenance of trusted data.

Self-Executing Smart Contracts

Smart contracts are the third industry-disrupting benefit of blockchain technology. Provided that smart contracts are based on “IF-THEN” scenarios, different conditions can be applied to any type of transaction. Self-executing smart contracts based on the frequency of conditions can be utilized to automate a variety of different translations and segments of various industries.

Welcome to a Connected and Transparent World

The business environment has increasingly been in need of improvement in the way that payments, transactions, and financial agreements are executed. Companies have been looking for new technologies to make transactions between companies and customers in a faster, safer, cheaper, and a much more reliable way.

Blockchain technology offers a new way for commercial transactions to be executed, using a shared ledger, different levels of permissions, consensus mechanisms, and smart contracts. The shared ledger allows transactions to become immutable. Transactions are recorded only once, preventing data entry duplication.

Each blockchain community member, from the moment they have authorization (total or partial) to access the blockchain, can download a copy of the ledger. This copy enables the traceability of the records among network (community) members.

Because a smart contract is an agreement between any two parties based on a business transaction, this contract can be stored in the blockchain and executed automatically, similar to the way that agreements, clauses or contract payments can be fulfilled, closing the cycle of any business value chain with much more efficiency.

Blockchain technology can be utilized across a variety of industries, as previously mentioned. Some current projects are already tackling these industries to provide value and better processing of information. Below, we will review a few industries that are already being disrupted by blockchain technology.

Real Estate

The real estate industry is well known for being a bureaucratic and document-dependent industry. Blockchain experiments in the real estate industry involve the transferring and tracking of property titles. These documents of proof of property are being recorded on a blockchain to store the data regarding the ownership and current status of such real estate properties. When a buyer acquires a property, blockchain technology can be used to generate a digital token to represent the ownership of that property. This token with information about the owner and the status of the property can be transferred to other owners seamlessly in case of a sale via a token transfer.

Supply Chain

Supply chain is an industry that sees significant benefits from the utilization of blockchain technology. In the global supply chain industry, blockchain projects are combining sensor systems and smart contracts to track a variety of products and assure quality control, as well as timely delivery. By scanning or tracking information generated by sensors as a given product moves across a supply chain system, blockchain technology can be used to record the data specific to each cargo and update the system automatically, giving all participants the latest update of the status of any given supply chain.

Food

Blockchain technology is also affecting and disrupting the food industry in a similar way in which it is affecting the supply chain industry. Large retailers are already utilizing Blockchain technology to track food shipments and implement quality control mechanisms on food products that are being imported or exported from or to other countries that are known for having different standards of food quality control. Blockchain technology can not only be used to track the cargo movement of any given food products, but it can also be utilized to provide information about the origin and source of any given food product (such as the health status of livestock or the quality of the soil of a coffee farm) and to retailers and end users.

Healthcare

The healthcare industry is well known for having inefficiencies in its data management and payment system. These two areas, however, can be significantly improved with the utilization of blockchain technology. Currently, the healthcare industry is utilizing blockchain technology to preserve the privacy of their patients’ healthcare data and share an individual’s healthcare records and disease data with different providers of the healthcare industry to improve disease prediction and prevention. Blockchain technology is also being used to create new pharmaceutical products.

Education

In today’s environment, education is an extremely important asset for advancing in any sort of profession. Diplomas and accreditations are valuable assets for individuals looking to advance their careers. However, the paper format of providing a certification or diploma is inefficient since it does not allow for an individual to share a verified accreditation or diploma with various potential employers or other stakeholders. Blockchain technology has great potential in this segment since it allows for institutions to participate in decentralized ecosystems that allow students and potential employers to access a database that verifies accreditations and certifications. With the use of blockchain technology, students would now be able to share their diploma via social media, email, or any other decentralized applications that provide a trusted source of verification and authenticity of a degree.

Entertainment and Media

The entertainment and media industries are not only fragmented but also have significant challenges associated with the management and payment of intellectual property, copyrights, and the streaming of media. Blockchain technology can be used to create ecosystems where large media companies can collaborate to modernize royalty payment mechanisms of IP-intellectual property and track where each piece of music, movie or other form of media is being displayed or streamed. Consequently, these ecosystems automate payments that can be fractionalized between the different stakeholders who participate in the ownership of such media, such as songwriters, bands, movie directors, actors, and actresses.

Energy

The energy industry in most countries is a centralized industry, controlled and operated by public and governmental institutions. The decentralized nature of blockchain technology can be utilized to create platforms designed to support peer-to-peer trading of energy, where an individual could collect energy via different formats (like solar voltaic panels) and resell that energy to public utility companies, corporate buyers, or other individuals. A very promising application of blockchain technology is the ability to trade renewable energy credits for money. The increasing relevance of clean energy capturing sources, such as wind or solar farms, makes blockchain technology critical to commercialization and interconnection of various individual energy producers to the public grids.

Retail

For many years, the retail industry has been affected by not only inefficiencies in its supply chain but also by loss of potential revenue due to fake and counterfeit products. Luxury brands have the constant challenge of fighting fake copies of their products, but blockchain technology allows for retailers to keep an immutable track record of transactions and to permanently register authentic goods. Luxury items and jewelry can have their certification of origin stored in a blockchain and have that data shared with owners, insurance companies, or other parties involved in the resale process of that given luxury item. In the case of a theft of the luxury item, Blockchain can help support law enforcement by tracking and recouping items.

Government

Governments around the world have been facing issues with the validation and accuracy of votes and petitions within their electoral system. Blockchain networks, such as the Ethereum Virtual Machine, can process millions of votes in an immutable tamper-proof way. Governments can now utilize blockchain technology to ensure that elected candidates are representatives of the actual majority of votes and that popular petitions are actually being supported and voted on by individual citizens and not tampered with or modified by political interest groups.

Insurance

The insurance industry has faced significant challenges to mitigate insurance fraud. Thus, blockchain technology can be used to track, verify, and process insurance claims on a blockchain ecosystem; also, this technology provides automated payments for claims in a decentralized fractional manner. If an individual files a claim, an insurance provider utilizing blockchain technology can use decentralized ledger technology to track the given asset involved in the claim and make the different payouts in an automated process, which is extremely helpful for corporations that have global insurance policies across different jurisdictions, risk profiles, and premiums associated with each policy.

Travel and Hospitality

The travel industry comprises several merchants and players, including hotels, airlines, tourism agencies, and a wide variety of service providers. In addition, financial service firms process customer rewards programs (loyalty points) as a form of payment for hospitality operators and service providers. Blockchain technology allows these financial institutions, like credit card companies, to personalize customer reward systems and make distributed payments to a variety of service providers in the hospitality industry, avoiding double charges (double spends) and delays in payments. Moreover, blockchain technology allows for a much more efficient accounting system of rewards programs for both the customer and the financial industry.

Finance

The financial services industry will most likely be the industry that will be most disrupted by blockchain technology. Taking into consideration the immutable ledger nature of blockchain technology, asset exchanges, custodian services, processes of buying and selling equity and other forms of assets, financial products can be seamlessly automated through blockchain technology. As an overall concept, blockchain technology digitizes all paper forms of representation of financial assets and financial products, such as stocks and bonds, and automates the process of transferring ownership and payment of these assets.

At MountX, we are creating the next generation of digital financial products to enable access to international real estate investing to 140 million millennials in Latin America.

Tokenization powered by blockchain is allowing investors at any scale to participate in fractionalized real estate opportunities, providing greater liquidity, better price discovery, faster and cheaper transactions with more transparency, and global accessibility.

Welcome to the new era of real estate investing. Accessible, secure and global.

 

Sources: MountX Real Estate Capital, The STO Financial Revolution, Cointelegraph, Deloitte, Hackernoon, Cryptoadventure, PwC, Interaxis, IBM, ELEV8

 

Photo by:   Enrique Suárez