Blockchain is a distributed ledger technology and allows for the recording and transfer of data in a manner that is transparent, safe, consistent, and immutable. The value of Blockchain, however, appears to be in its impact on business processes. Blockchain helps businesses establish trust between each other by being transparent, democratic, decentralized, efficient, and secure. The digitization and decentralization of secure and validated transactions can be applied to every industry to make them more efficient, accurate, and secure. Here are some examples of industries that are already being affected:
- Real Estate: The real estate industry is largely dependent on tracking the ownership of deeds and titles. This process is paper based and slow and there can be errors when people are searching through various documents in the registrar. There can also be issues of fraud and mistakes in the public record system. With Blockchain, tracking ownership can be fast and accurate as the records are completely verified and immutable in the ledger. Blockchain also reduces the human error aspect by completely digitizing the records.
- Automotive: Buying a car is a very fragmented process that includes many middlemen and copious paperwork. All of these additions to the process add time and cost and risk of error. Blockchain can help expedite this process and cut down on cost by facilitating direct to purchaser sales and digitizing all of the paperwork in a secure manner.
- Government: It is no secret that many government-run organizations are slow and inefficient, take the post office and the DMV for example. Blockchain can significantly reduce bureaucracy and increase security, efficiency, and transparency of operations. Blockchain can also help secure the transfer of data in the more sensitive and private areas of government.
- Finance: Currently, there are many middlemen involved in finance and all transactions rely on a central authority such as a bank. These centralized authorities add costs and time to transactions between parties that do not trust each other and cannot transact directly. Blockchain cuts out the middlemen and allows direct seller-to-purchaser transactions. This allows for lower processing costs and the immediate transfer of funds because all of the information is verified and tamper-proof already. Thus, parties that do not even know each other can effectively “trust” one another.
- Cyber Security: Right now, online transactions occur through a centralized hub of authority. This makes information vulnerable by storing it all in one place. Blockchain is much more secure because all information is verified and encrypted using advanced cryptography. This eliminates the need for a centralized authority, facilitating the ease, security, and immediacy of transactions. However, Blockchain’s advanced cryptography is still new and users should remain cautious with their information.
- Law: The registration of intellectual property, including patents, trademarks and copyrights and subsequent tracking of chain of title make the legal industry ripe for Blockchain disruption. Much like real estate, tracking ownership of such IP, and verifying the same, can occur using Blockchain. The question becomes, will it?
Every industry has processes of shipping, buying and selling, and determining ownership. These processes are all slow, error prone, largely paper based, and people-dependent. Blockchain works to digitize and decentralize all of these processes in a manner that is quick and secure so that industries need not rely on old and inefficient methods. Many industries are already affected and there is no limit on the number or type of industry that can benefit from the value of Blockchain. Regardless, whether or not you are a Blockchain lawyer, you will need to understand how the technology works and be able to navigate the resulting impact on numerous client industries.