The Blockchain: Beyond Bitcoin

Blockchain

While many people in the U.S. are still skeptical that bitcoin will become a mainstream currency, both private and public sectors are gaining interest in the idea that the underlying blockchain technology can be used to solve a wide variety of security and transactional problems.

In the private arena, industries are evaluating blockchain technologies to solve security and payment issues along with broader contract and verification uses. Deloitte published a report stating it is likely blockchain technology will soon be used in industries such as banking, insurance, energy trading and even media.  The Deloitte report includes use cases for each industry and describes how the banking industry could use the technology to streamline compliance and speed facilitation of payments, the insurance industry could use the technology to manage and pay claims in a transparent manner that also helps avoid types of fraud, the energy trading industry could use the technology to increase the speed of exchange and lower transaction costs, and the entertainment industry could use the technology to pay artists automatically when their media is played. However, beyond specific industries, ideas related to smart contracts, auditability, identify verification, and property ownership verification could be used broadly across all sectors, and technology giants such as IBM are gearing up for the new blockchain uses.  IBM recently released a new service to allow companies to test and run blockchain applications.

After watching bitcoin develop for about 8 years, even governments are starting to test applications based on blockchain technology. The central bank of the Netherlands has plans to conduct experiments to determine if the Netherlands could build a financial system using blockchain technology that would be more secure than its current financial systems. The bank is also set to open a campus where financial institution employees can learn more about blockchain technology.  This announcement comes after a string of attacks on financial systems and markets earlier this year caused the Bank for International Settlements to issue a report stating that financial institutions should take steps to improve cyber security. In the United Kingdom, Parliament will meet later this week to discuss how blockchain technology could be used in collecting taxes or paying benefits such as welfare. And the U.S. is even looking at whether blockchain technology can be used in military applications: the Defense Advanced Research Projects Agency wants to investigate blockchain technology as a secure messaging service.  NATO is also evaluating proposals including military applications for blockchain technology.

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