Crynet.io (project manager), vtorov.tech (expert), ICO/STO/IEO, venture & marketing projects
There were a lot of talking about where and how blockchain is suitable. Attempting to stick the blockchain everywhere and to everything is a parody.
This just hype for this word, and not for technology, unfortunately already played a cruel joke. However, there are still sectors of economy where it is appropriate.
And we will consider it step by step. Experts from Gartner believe that the blockchain is currently on the verge of the “getting rid of illusions” phase. At this stage, the disadvantages of the technology are revealed, the publications in media are full of criticism.
However, are there any working products based on the blockchain and, if so, in what areas? One of these areas, one can consider financial services, where traditionally there are many intermediaries, lack of transparency and high commissions.
Already, many big banks are working on decentralized solutions and are testing them. So what is on the market now?
For example, development of netting. It is a service based on Hyperledger Fabric. Netting entails offsetting the value of multiple positions or payments due to be exchanged between two or more parties.
It can be used to determine which party is owed remuneration in a multiparty agreement. Netting is a general concept that has a number of more specific uses, specifically in the financial markets (in securities transactions).
What else? There is much talking about bonds on the blockchain, mortgages and bank guarantees. Almost all leading banks, including Islamic banks, are experimenting with this.
Again, Hyperledger Fabric is popular for this and Corda blockchain in some other cases. Are there any prospects? Undoubtedly, there is in those cases and situations where we need tracking operations and consent for this from all parts.
Banks as Bank of America, Goldman Sachs, Citibank, Morgan Stanley, JPMorgan Chase and Bank of China, Commonwealth Bank of Australia in 2019 promising results. Also in the banking sector one talks a lot about cross-border financial transactions, there are even intentions to get rid of SWIFT.
#2 Copyright protection
One believes that it can be well recommended in copyright protection and in the fight against data falsification. For example, Sputnik DLT, a startup, developed the Depositor service on the Waves platform to prove copyright.
A similar solution exists already based on Emercoin, where the SHA-512 algorithm is used. According to the developers, the Emernotar service can be used by businesses and lawyers to sign contracts, online services can be used to collect demonstrable user consents, and representatives of the creative industry can confirm copyright.
Based on the Emercoin technology, there is a platform for democracynotary.org. It is designed to protect the integrity of important information related to electoral processes as well. Although in terms of the electoral process, the blockchain cannot yet ensure the anonymity of the vote, it can ensure the authenticity of the vote.
This decision was tested during a recent referendum in Macedonia on the issue of approval of a treaty with Greece, providing the change of the country’s name. Its task was to notarize public reports on the process of holding a referendum as part of countering the spread of disinformation.
#3 Real estate
The promising scope of the blockchain use case is registration of real estate transactions. Last year there were certain attempts to conduct such purchase/sales transactions in many jurisdictions using the smart contract on the Ethereum blockchain. Not everywhere did the legislation understand what lawyers are trying to do, but attempts have been and will be in the future.
For example, the most striking example is that through a decentralized Propy marketplace in California, a deal was made to sell ten acres of land, fully executed in bitcoins, and registered using the blockchain. Later on, the first in the EU sale of real estate on the blockchain took place.
In December 2018, the Swiss FINMA approved the business model of blockchain company ‘’Blockimmo real estate company’’. Now, the Blockimmo platform is in test mode and is available for residents of Switzerland and Liechtenstein. Later, the company plans to enter other whole European market.
#4 Wholesale and logistics
Some experts sing the hallelujah of using blockchain in wholesale and logistic sectors. At the same time, another part of the expert world is proving the futility & useless of this technology there. However, at the same time, we should not deny as consumers the success of some implemented projects, both in wholesale & in logistics.
In the late fall of 2018, oil giants BP and Shell, large banks and other companies launched the Vakt blockchain platform to optimize processes for trading commodities. In particular, the solution involves the transfer of paper documentation to smart contracts.
The blockchain is also used in the United Arab Emirates — the first blockchain-based logistics solution in Abu Dhabi were launched by Maqta Gateway LLC. The company has developed a blockchain-based Silsal technology to improve the efficiency of logistics and freight. Through DLT technology, Maqta Gateway hopes to reduce paperwork, facilitate real-time status updates, and speed up information sharing.
Also in the autumn of last year, the launch of the IBM Food Trust blockchain platform took place. It is based on the Hyperledger Fabric technology, and is intended as a platform for controlling supply chains in the food industry.
Such famous companies as Carrefour, Nestle, Dole Food, Tyson Foods, Kroger, Unilever and Walmart became members of the network. The monthly cost of blockchain services from IBM ranges from $ 100 up to $ 10,000. Therefore, if such industry giants invest in this, then it makes sense!
In the fall of 2017, a decentralized Shelf.Network auction was launched. The platform allows dealers to enter into transactions for the sale, rental and leasing of cars.
A year later, the auction received investment from the Japanese IT giant Broadleaf. At the same time, Broadleaf received a license to distribute Shelf.Network technology with the aim of creating a trading network for car and component sales in Southeast Asia, including Japan, Myanmar, Thailand, Indonesia, Vietnam, Laos, Australia, India, and Singapore.
At the end of 2018, 60 thousand cars from the USA were represented in the service network. Shelf.Network also interacts with the Carfax web service, which provides vehicle history reports to individuals and businesses. Startup Auto1 Group GmbH used the blockchain to record loans and insurance products when buying vehicles in Germany. Blockchain in this case allows dealers to carry out transactions quickly. DLT is an alternative to traditional paperwork, which takes about two weeks in these cases.
According to a survey conducted by the IBM Institute for Business Value among large companies, by 2021 the blockchain will play a key role in the automotive industry. Blockchain is using in the airline industry as well. For example, S7 Airlines and Alfa-Bank (Russia) have applied smart contracts on the Hyperledger blockchain platform to pay for fuel at the time of aircraft refueling instantly.
The parties believe that technology of the DLT can simplify and speed up mutual settlements, eliminate various financial risks, and also automate the processes. The meaning of the application is the same as in wholesale and logistics.
#6 Public sector Blockchain is already close to public sector. Blockchain is widely used for the certification of documents. There is, for example, the Proofstack service, which archives the document file together with the personal signature of the owner, the date & time stamp. Then the archive hash is written to blockchain.
The user can additionally select a country, which will affect the type of timestamp, and the desired storage location of the generated archive (computer, cloud). The created archive serves as confirmation that the file is archived by a person at a certain time. Blockchain is becoming commonplace in the judicial system.
For example, ServeManager and Integra have integrated blockchain into a service to track the delivery of subpoenas. The state-supported blockchain solutions in China are rapidly developing. Thus, within three months after launch, the Chinese judicial blockchain-system Tianping Chain gathered about a million elements of online evidence.
All materials presented on the platform were verified using DLT & belonged to 190 000 documents. The system for placing electronic evidence was developed by Beijing Internet Court, China Emergency Response Team in Industrial Control Systems (CICS-CERT), Research Center under the Ministry of Industry and Information Technology, Baidu Internet Conglomerate, and TrustDo blockchain-startup.
The platform is based on Super Chain infrastructure from Internet giant Baidu. Tianping Chain optimizes the process of collecting and storing evidence, and ensures the authenticity through the blockchain. The platform saves time and resources by reducing the cost of litigation related to the Internet.
#7 Insurance and fintech
Maersk, the world leader in container shipping, began to use Insurwave blockchain solution last spring. The maritime insurance platform was developed by consulting firm EY and Guardtime, and is based on Microsoft Azure cloud technology. In the first year of working with Insurwave, Maersk is expected to insure one thousand seagoing vessels, and the total number of digital transactions will exceed 500 thousand.
The platform is already used by Willis Towers Watson, XL Catlin and MS Amlin. The developers are expanding Insurwave’s functionality to add insurance to aviation and energy. A British fintech company Calastone, specializing in the management of investment flows, announced the full transfer of calculations to the blockchain.
The company expects technology to help cut billions of dollars in the costs of the global settlement sector. Calastone provides risk assessment / management services, IT infrastructure, and payment solutions to more than 1,700 companies, including JP Morgan Asset Management, Schroders and Invesco.
However, all these are excellent opportunities if the goal is to strive for transparency of transactions and the information entered in the DLT registries. If the goal is to remain anonymous or ‘’tracing’’ financial transactions, then there is no prospect for blockchain at all there.
#8 Energy sector & telecommunications
Singapore Power Group has launched blockchain marketplace for trading renewable energy (REC) certificates. According to representatives of the company, the platform is “developed in-house” and is designed to make transactions with such certificates safe, reliable and traceable.
RECs are evidence of the release of a certain amount of electricity by solar panels. Platform interested by City Developments Limited and DBS Bank, who intend to buy certificates. RECs are being sold by Cleantech Solar Asia and LYS Energy Solutions. Katoen Natie Singapore has also joined the platform, which plans to launch renewable electricity production capacities soon. KT Corporation, the largest telecommunications company in South Korea, launched its own blockchain network.
The distributed registry technology is involved in user authentication and to improve international roaming services. The marketplace will also allow for the safe transfer of customer data to KT Corporation partners. Network bandwidth should eventually reach 100,000 transactions per second.
Time will show if these initiatives will be popular in the mass market. Again, the blockchain here is for an account/record/stocktalking of power, data, user identification. Nothing new.
It is becoming a reality diploma on the blockchain. Therefore, at the end of 2017, more than a hundred graduates of the Massachusetts Institute of Technology (MIT) received digital education certificates. For issuing verifiable and counterfeit-based digital versions of diplomas, the Blockcerts Wallet application was used, which works with the bitcoin blockchain.
The pilot project was also supported by the software company Learning Machine, which previously, together with the Media Lab, was involved in developing the open standard Blockcerts.
The goal here was most likely to give students the right to become the real owners of their documents. According to Chris Jagers, CEO of Learning Machine, people will be able to use important official data that will be stored even if the institute stops to exist. The same case were used by Tbilisi University of Business and Technology.
In cooperation with Emercoin, the University has used the blockchain platform Trusted Diploma, designed for similar purposes. Again, the aim of using the blockchain here is to fix registration data (knowledge obtained, quality of training, and points received). One can also call as an advantage the fact that the blockchain is one step closer making it possible to promote the digital learning methods
While more examples of the use of the blockchain have not been found, however, we do not know what tomorrow has prepared for us today!
Sergiy Golubyev (Сергей Голубев)
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