Blockchain Technology Explained: Benefits and Applications

According to a survey conducted by EY in February 2023, over a third (38%) of US workers said blockchain technology is widely used in their businesses. Another 44% said the technology would be widely used within three years, while 18% reported it was still more than three years away from being widely used in their business.

Greater adoption of blockchain requires an understanding of what the technology is, how it works and the benefits it offers to all industries, including financial servicesretail, advertising and marketing, e digital health.

Blockchain is a tamper-proof sequential ledger based on cryptographic principles. It is designed to build confidence in the timeliness, accuracy, security and speed of transactions.

A blockchain organizes its entries sequentially; each entry includes encryption of the new data, which is combined with the encryption of the previous entry. The joint encryption of these two entries then becomes the first part of the subsequent recording. This sequential encryption provides a high level of security and timestamping. The data is usually encrypted using hash codes and the value is stored as digital tokens.

Blockchain is a secure, transparent and efficient way to share data between multiple parties.

• The blockchain cannot be modified or reversed, meaning participants can trust the data presented to them.
• Additionally, the confidential nature of blockchain protects users from identity theft, making it attractive to both consumers and businesses.
• Blockchain allows businesses to transact in real time at any time of day, any day of the year. This is a contrast from bank transfers and payments which are only available during business hours and have cut-off times.
• Blockchain also reduces costs for businesses, especially those making high-value, high-volume transactions that lead to increased fees.

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Blockchain’s potential use cases span all industries, including financial services, retail, marketing, advertising, and healthcare. Here are some examples:

• In financial services, blockchain increases the speed of real-time settlement (eliminating exchange rate risk for currency transactions) and allows real-time transactions. It also has applications to streamline operations, such as tracking bank guarantees and letters of credit between parties and executing smart contracts, making reporting faster and automating compliance.
• Powers of blockchain cryptocurrencieswhich are digital currencies managed by a decentralized systemresulting in cheaper and faster transactions.
• Retailers use NFTswhich are digital assets that sit on a blockchain, to interact with their tech-savvy, brand-enthusiastic customers who want exclusive products or experiences.
• Luxury retailers they are also using blockchain to certify the authenticity of their products and make the transfer of ownership more transparent.
• In marketing, blockchain can be used to increase security and transparency in sharing customer data, whether between a customer and a company or between two companies.
• Blockchain can also be used to reduce fraud and other trust-related issues in digital ad buying.
• Blockchain has a wide range of applications in the healthcare industryincluding improving payment processing, electronic health records, provider directories, and security and data exchange.

Blockchain is the basis for the next phase of the Internet called Web3. Companies like JPMorgan Chase, IBM, and Google are building teams to explore the future of technology. But its technical complexity and upfront investment create adoption barriers for many organizations.

What role does blockchain play in Web3?

Web3 is a new iteration of the Internet built on decentralized blockchain networks and operated by multiple actors instead of being controlled by central authorities like Google or Microsoft. This gives users more control over their personal data. However, Web3 access requires the use of the crypto wallet, blurring the lines between each space.

In the Tech trends to watch for 2023 report, EMARKETER predicts that companies will use Web3 to provide new benefits for loyalty programs or new ways to activate them.

What are some examples of blockchain technology across industries?

• JPMorgan has formed a team within its Onyx unit that will develop and market new blockchain-based solutions.
• Bitcoin is one of the leading cryptocurrency providers, which uses blockchain technology to operate.
• Luxury retail brands such as Tiffany & Co., Dolce & Gabbana and Gucci have experimented with NFT projects. Nike even acquired NFT company RTFKT in 2021.
• Healthcare giants Humana, MultiPlan, and UnitedHealth Group have formed Synaptic Health Alliance, a venture exploring applications of blockchain technology in healthcare and have been working on a blockchain-enabled provider directory solution.
• IBM and Mediaocean launched a blockchain consortium in 2020 for the digital media supply chain, bringing together advertisers, agencies and publishers.
• Google has also reportedly created a new unit in 2022 dedicated to “blockchain and other next-generation distributed computing and data storage technologies”.

What are the barriers to blockchain adoption?

The technical complexity of Blockchain is one of the main challenges of the technology. It requires an initial investment in time, talent and resources, which can be daunting for some companies. Furthermore, there are still concerns about the security and privacy of blockchain data.

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