By: Arjun Goyal
While the most obvious application of blockchain technology is digital currencies, from healthcare to record labels to sports betting, there are a multitude of other industries blockchain technology has to potential to disrupt.
Unless you’ve been living under a rock for the past year, you’ve probably heard of the term blockchain. Blockchain is a technology that has taken the world by storm, with many calling it the next ‘big thing’ in this current age of rapid technological progress. It has become a buzzword, so much so that the Long Island Iced Tea Company (yes, the beverage company) renamed itself to Long Blockchain Corporation and saw its stock rise by 289%.
You might have also heard of the phenomenon investors are chasing called Bitcoin. Cryptocurrencies like Bitcoin have seen a rapid surge in the past few years, especially after the meteoric price rise of Bitcoin in 2017. These cryptocurrencies are all built on blockchain technology; think of it like how apps based on a computer software or how websites are based on the Internet Protocol.
How does it work? Well since blockchain is such a complicated technology, it is extremely difficult to explain this to a layman for full understanding. But I can try to explain it in a nutshell: blockchain is a type of database such that when a transaction or activity occurs, it is recorded on every machine participating on the blockchain network, thus making fraudulent changes to the record nearly impossible, as one would have to make this change on every single machine. What it tries to do is to give the power of storing this information to everyone instead of just one regulating party, creating a decentralized consensus rather than a central party who validates the data. (For a better and more thorough explanation of blockchain, I highly recommend reading this article on our website)
While cryptocurrencies have been the main drivers of blockchain technology, a deeper look reveals so many interesting implementations and applications of this revolutionary technology.
Music Distribution (Bittunes)
Bittunes aims to revolutionize the way music is distributed in the world. With the key focus of minimizing piracy in the music industry, Bittunes aspires to use blockchain technology to distribute music around the world while making sure that artists get their fair share of money. The founders noticed that a large part of funds were being taken away at the top of the distribution chain, and by the time it reached the artist, the trickle down had reduced the flow of money to a mere stream. They claim that 78% of revenue in the music industry is non-artist revenue, which is a staggering number. With the introduction of Napster and music piracy, this has reduced even more.
Bittunes addresses this problem by doing two things. Firstly, they have created a blockchain model such that a fixed percentage (around 40%) of the earnings earned on the sale of a track goes directly to the artist. With the nature of blockchain technology, participants no longer require a third-party intermediary to facilitate the exchange, allowing transactions to be completely peer-to-peer, thus giving more of the earnings back to the artist. Secondly, they have created an incentive for users to buy tracks rather than downloading them illegally: giving them a percentage (around 20%) of the earnings as well. By doing this, they have made the music distribution market into a pseudo-stock market, where songs may go up and down in value as they are traded.. At the same time, they give the lion’s share of the earnings to the actual artist. The idea is brilliant and naturally has garnered much backlash from music distribution companies. The beta is coming soon, so only time will tell whether their model can upset the status quo of the music industry.
Data Storage (Filecoin)
Storage in the cloud is not a new thing. With the vast amounts of data we deal with, data storage innovations are in need. Filecoin takes this dilemma and answers it with an ingenious blockchain-based solution.
Filecoin allows users to save their data on other people’s hard drives. Right now, you must be thinking there are some serious issues with privacy and security. But filecoin uses the decentralized security of blockchain to ensure that there are none of these issues. Their software has strong end-to-end encryption that prevents manipulation and an erasure protocol to prevent future leakage of data. But the beauty of filecoin is that it provides an incentive to the storers of this data since access to their storage facilities is contingent on a payment made between the customer and the storer. This price is determined by demand and supply, which ensures market competition.
Filecoin has managed to leverage blockchain technology to create data storage solutions without going through the traditional data storage route. Investors are clearly excited by its prospects, since it raised more than $250 million in its initial coin offering (similar to an initial public offering undertaken by public companies).
Sports Betting (Wagerr)
Wagerr uses blockchain technology to establish a sports betting platform. Yes, this sounds illegal but the online sports betting industry is a $37.9 billion market, and Wagerr aims to provide a more efficient, blockchain-based approach to it.
It uses “blockchain technology to execute betting contracts” in something that they call “trustless betting.” The software verifies results and pays the appropriate party in the wager the amount being bet. Since it is decentralized, manipulation of this data is extremely improbable and the transaction connection created by smart contracts (an extension of blockchain) is very secure.
Another advantage of being decentralized is that it is less susceptible to detrimental issues like corruption and fraud. Wagerr also prides itself in minimizing middleman costs, since its transaction costs are minimal and its app is supposed to be easy to use (even for casual gamblers).
Thankfully for Wagerr and other sports betting apps like it, the outlook on sports betting is changing and executives like NBA commissioner Adam Silver have supported the regulated legalization of sports betting. The development of these blockchain solutions may accelerate this change.
Medical recordkeeping (Medicalchain)
Medicalchain provides a similar service to Filecoin, except with much higher stakes. It provides a blockchain solution to the storage of medical records of patients in a place where doctors and health practitioners can access them securely.
The encryption and decentralization of blockchain software prevents any chance of manipulation or data loss, and affirms that the health information for the patient accessed by doctors is credible. Its design also implies that no one can access this information without the consent of the patient (again via a smart contract mechanism).
This kind of product would provide a secure, decentralized yet convenient compilation of all health records, and at the same time prevent misuse of health records in cases of unauthorized prescription medication abuse or identity theft. Additionally, Medicalchain also provides an incentive for patients to use this service by compensating them in their cryptocurrency MedTokens when their information is used through the service.
Their ideas are gaining traction in the real world, and Medicalchain has been featured in The Telegraph, Financial Times and also conducted an event at the FT Digital Health Summit.
The criticism on cryptocurrencies have slowed their ascent slightly, and the growing holes in their feasibility are allowing the flaws to become more visible. Whether or not cryptocurrencies succeed in the future (as currencies or as securities), blockchain technology is not going anywhere. Its ability to provide decentralization and security in a cost effective and rapid manner means that its adoption into industries is imminent. And we would be myopic to think that their applications are limited to FinTech and cryptocurrencies, as outlined by the article above.
At the same time, it will take time before this technology is leveraged fully throughout the economy. Past experiences with computing technologies are empirical evidence to support this hypothesis, which may occur due to early skepticism or simply the inertia of undertaking such a radical change. But blockchain is definitely going to affect the way we live, and help us continue to pursue increased productivity and innovation in this digital age.
Shapira, A., & Leinz, K. (2017, December 21). Long Island Iced Tea Soars After Changing Its Name to Long Blockchain. Retrieved April 13, 2018, from https://www.bloomberg.com/news/articles/2017-12-21/crypto-craze-sees-long-island-iced-tea-rename-as-long-blockchain
B. (2017, April 12). Why we started Bittunes.. – Bittunes – Medium. Retrieved April 13, 2018, from https://medium.com/@Bittunes/why-we-started-bittunes-3ab0b63bfad4
Filecoin. Retrieved April 13, 2018, from https://filecoin.io/
Wagerr. Retrieved April 13, 2018, from https://www.wagerr.com/
$257 Million: Filecoin Breaks All-Time Record for ICO Funding. (2017, September 08). Retrieved April 13, 2018, from https://www.coindesk.com/257-million-filecoin-breaks-time-record-ico-funding/
Fuller, S. Topic: Sports Betting. Retrieved April 13, 2018, from https://www.statista.com/topics/1740/sports-betting/
Nathan, A. (2017, July 19). Adam Silver Expects Sports Gambling to Be Legalized ‘In the Next Few Years’. Retrieved April 13, 2018, from http://bleacherreport.com/articles/2722453-adam-silver-expects-sports-gambling-to-be-legalized-in-the-next-few-years
Medicalchain. Retrieved April 13, 2018, from https://medicalchain.com/en/