Blockchain might be hitting a rough patch now, but signs suggest the distributed ledger technology is here to stay.
Global spending on blockchain solutions soared almost 47% from 4.5 billion in 2020 to 6.6 billion in 2021. That same year, nearly 80% of respondents in Deloitte’s Global Blockchain Survey indicated that digital assets will be “very/somewhat important” to their respective industries within the next two years.
As more companies embrace blockchain technology, new use cases are fast emerging worldwide. While decentralised finance takes the lead, distributed ledgers and digital assets are increasingly finding their way into industries such as supply chain management, insurance, and luxury retail.
| Blockchain for Anti-Money Laundering (AML)
Because blockchain technology is based on publicly distributed ledgers, this feature makes it ideal as a verification system for financial transactions.
The key advantage that blockchain technology possesses over the status quo is data integrity: since information like customer background, financial records, and income can all be stored on a blockchain, it not only ensures that a customer’s information is accurate across an entire network, but also renders it very difficult for any false information to be keyed into the system.
By extension, blockchain technology also speeds up the know-your-customer (KYC) process since all background information is stored and easily retrieved from one single blockchain network.
One firm that develops blockchain-based anti-money laundering solutions is KYC Chain. Based in Hong Kong, the firm offers individual and corporate KYC solutions for blockchain and banking. Current customers include firms such as Standard Chartered, AscendEx, Global Fidelity Bank, and Hong Kong Virtual Asset Exchange (HKVAX).
CipherTrace is another firm that utilises blockchain technology for fraud protection and anti-money laundering. Its cryptocurrency AML solutions are currently deployed at some of the world’s largest banks, and previous partners include Rakuten and Binance.
| Blockchain for Decentralised Finance (DeFi)
The most popular use case for blockchain technology so far. DeFi aims to replace centralised institutions in the conventional financial system with peer-to-peer networks that facilitate the same array of financial services.
In DeFi, transactions are recorded in a decentralised, public ledger instead of a private one held by a financial institution. This takes the middleman out of the equation, and transactions are verified instead by all users of the same blockchain.
One company that uses blockchain technology for DeFi is cryptocurrency exchange Uniswap. The decentralised network protocol the firm uses automates cryptocurrency transactions on the Ethereum blockchain via smart contracts.
Singapore-based Stader Labs is another example of a DeFi startup. Founded in 2021, it builds blockchain protocols that help users access cryptocurrency staking solutions.
| Blockchain for Media and Entertainment
Even showbiz and sports aren’t strangers to blockchain technology.
For sports clubs and entertainment outlets, the benefits of digital assets are numerous:
- Enhanced fan interaction by not only hyping up upcoming games, but also by giving them a stake in how their favourite teams perform,
- New revenue stream, and a means to crowdfund,
- Verifiable authenticity of rare sports merchandise, reducing the risk of fraud and counterfeit items on the market.
Some of the big leagues are already cashing in.
FC Barcelona’s US$1.3 million first round of fan tokens, which allow holders to exchange for official club merchandise or access VIP events like player meet-and-greet sessions, sold out in less than two hours.
Over in professional basketball, NBA Top Shot, an NFT marketplace where sports fans can buy, sell, and trade digital assets based on video clips of NBA games, boasted more than 1 million registered users by September 2021.
| Blockchain for Art and Luxury
Few sectors have ventured as deeply into the blockchain scene as high fashion and art.
For both, blockchain provides a means to improve the traceability of intellectual property. Fashion brands and artists can track their products from creation to final destination, enabling both to verify authenticity with buyers.
Blockchain offers another benefit to artists: by reducing intermediaries with the use of smart contracts, artists can retain control of their intellectual property, rather than give up significant rights – or profit – to industry middlemen.
Maecenas Fine Art, for example, is a blockchain-powered art investment platform that allows buyers to purchase artworks in fragments, lowering the cost of operations while eliminating the need for intermediaries.
| Blockchain for Insurance
Blockchain’s promise of combating fraud and automating complex decision-making has also won over many insurers.
But in insurance, blockchain’s appeal doesn’t stop there. On-demand insurers can use blockchains for more efficient record-keeping from policy inception to disposal, while the elimination of intermediaries could fuel the rise of peer-to-peer insurance, which allows groups of individuals with shared interests to self-administer their insurance, rather than leave it in the hands of an insurance company.
Insurtech companies like Lemonade and Teambrella have already built new blockchain insurance models. The former leverages artificial intelligence and blockchain technology to offer rental and home insurance at rates varying between just US$5 to US$25 a month, while the latter provides the world’s first community insurance service built on Bitcoin.
| Blockchain for Supply Chain Management
The many virtues of blockchain also offer potential solutions for bottlenecks faced by supply chain operators.
Traditional supply chains are plagued by burdensome paperwork and delays due to the need for manual intervention on certain points. With blockchain, players could record critical information like price and location on-chain to not only manage their supply chains more efficiently, but also make them more traceable.
Naturally, blockchain’s ability to deter fraud also lowers potential supply chain losses from counterfeits or grey markets. If external vendors are roped in, blockchain can also strengthen compliance over outsourced processes.
Take Pakistan-based Openport for example. A digital logistics platform, it uses blockchain technology to deliver faster settlement and lower financing costs for supply chain operators in emerging markets.
In a similar league is Origintrail, a blockchain protocol that allows users to organise, discover, and verify items across interconnected supply chains.
| Find your use case with 2MR Labs
As more firms experiment with and adopt blockchain technology, new use cases are set to multiply.
But reaping the benefits blockchain technology promises is fraught with many risks. 6 out 10 leaders who participated in Deloitte’s 2021 Global Blockchain Survey cited regulatory hurdles as a key barrier to adoption, and only 8% of nearly 86,000 projects listed on Github have managed to become successful.
With 2MR Labs, our expertise will guide your blockchain experience from start to end. Get started on day one without any technical hurdles, and get in touch with the right people at the right price. Be part of our track record for success.
Ready to power your future with blockchain? Get in touch with us today.