4 Trillion-Dollar Industries Blockchain Is Poised to Disrupt -- in a Good Way The threat of hacking and complex free-trade logistics are just two current challenges that Blockchain can ease.
By AJ Agrawal Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Over the past few months, the Blockchain ecosystem has grown tremendously. Not only have cryptocurrencies continued to rise in value, with Bitcoin nearing $19,000 on December 16; but a number of emerging startups have entered the blockchain battlefield.
Related: 5 Sectors Blockchain Is Disrupting That Are Not Cryptocurrency
Though many of these fledgling projects seem poised to have a foundational impact on our global economy, it can be difficult to filter out the needles from the growing haystack.
Taking the time to understand the nuances of this technology can help guide your investment thesis and pay dividends in the long term. At its most basic level, as defined by the podcast Future Thinkers, "Blockchain is a distributed ledger technology that provides a way to record and transfer data safely and transparently." Theoretically, we can leverage this technology to optimize industries, eradicate the need for costly intermediaries and create secure marketplaces.
Related: 6 Reasons Why Blockchain is Worth Getting Excited About
While the time scale for this disruption is yet to be determined, there are a number of promising areas for implementation. Here are four of the industries most likely to be disrupted by Blockchain systems:
1. International logistics
Free trade is stitched into the fabric of the international economy. Though critical, this multi-trillion-dollar sector is largely run on legacy infrastructure that is incredibly inefficient, costly and sluggish. Plagued by a host of error-prone intermediary parties, the logistics industry is overdue for a serious overhaul.
One example of a company at the forefront of this is Shipchain. Shipchain is building a fully integrated Blockchain system to unify the modern supply chain. By logging transactions via an encrypted public ledger, the platform will provide users with complete control over and access to the status of their shipments. This will give entrepreneur-customers a top-down view of their product's movements.
The logistics industry is notoriously complex, with dozens of intermediary parties who broker each and every transaction. This not only fragments ownership among independent stakeholders but also slows down the shipping process in general. Furthermore, the industry runs largely on legacy processes, like pen and paper, which are due for an upgrade.
2. Health care
For years now, everyone has been talking about amending our broken healthcare system, but no one has ever been able to actually do it at scale. A primary reason is that hospitals lack a secure hub to store and share confidential patient information. As a result, this information often leaks due to cyberattacks. This is a major security concern in hospitals around the country, which are facing growing threats of hacking.
Replacing this dated system, Blockchain technologies will empower hospitals, along with other healthcare providers, with the tools they need to efficiently and safely store intimate information. Over time, we'll be able to leverage insights gleaned from this store of data to provide better care for patients and improve the industry.
Furthermore, we'll use the information and lessons collected in hospitals to better inform researchers, thus boosting health services at all levels.
3. Real estate
As evidenced by housing bubbles of years past, the real estate industry is certainly vulnerable to widespread corruption and abuse. Much of this is due to paper-based record-keeping that is prone to mistakes and costly to maintain. Furthermore, there are tedious, slow-moving processes that need to be completed by multiple intermediaries. As a result, fraud is rampant throughout the real estate community, driving up the cost of doing business.
Blockchain offers an opportunity to reduce the need for these dated systems and employ intelligent technology to automate manual processes. Companies like TrustToken, for instance, are bridging the gap between the trillions of dollars of real-world assets, like rental properties and timeshares, and the frontier technology of Blockchain. Users, the TrustToken platform claims, can easily "tokenize and trade assets on a global liquid exchange."
Effectively, companies in this category can eliminate the threat of "bad actors" by aligning incentives among platform participants, thus helping to ensure the accuracy of ownership and verify identities. "Tokenization" of real estate will enable unprecedented exposure to real estate markets for investors around the world.
4. Government
Due to misaligned incentives and human error, government processes are notoriously slow, opaque and prone to manipulation. The reality is that we cannot afford to rely on a number of different stakeholders with such unfettered power to manage our futures.
Clever implementation of Blockchain-based systems will allow us to hold politicians more accountable, thereby radically increasing transparency in government offices. The government will no longer be a big black box that collects our taxes, but rather an open and inclusive system that serves the people. We can also increase the security of government intel, using cryptographically encrypted blockchain ledgers to keep government data safe.
Related: Beyond Cryptocurrency: 5 Do's and Don'ts for Using Blockchain in Your Business
Furthermore, we'll be able to use Blockchain to solve one of the weakest points of the American democracy: the election system. The technology will allow us to securely and sustainably transition to a completely electronic voting system, to remove any threat of voter fraud. Now, that's good news for this new year and many more to come.
