In this article, we’re going to explore the various blockchain use cases in business. We’ll discuss the different types of blockchains available for businesses. Plus, we look at the different applications for blockchain industry-wide and how they can boost your business.
Blockchain protocols and smart contracts allow business owners to automate value transfer between parties without the need for trust. Also, combining public and private blockchain protocols allows businesses to develop bespoke technologies that cater specifically to their needs. With so many practical applications for blockchain, there are likely several ways this technology could benefit your team.
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What is a Blockchain?
A blockchain is a type of distributed ledger technology (DLT). It serves as a distributed database spread across a network of nodes. Blockchains maintain a secure, decentralized ledger of transactions for cryptocurrencies that generates trust between parties without intermediaries.
Unlike regular databases, blockchains structure transactional data into groups called blocks. Each block has a storage capacity that limits the amount of data it can store. When a block reaches capacity, it is appended to the blockchain. Each new block of transactions is permanently and immutably linked to the previous block using cryptography. This creates a tamper-resistant timeline of events that are publicly viewable by the entire network.
Centralized, siloed databases have a single point of failure that can be easy to exploit. However, public blockchains like Bitcoin do not rely on a central authority. If anybody wanted to alter the information held on the Bitcoin blockchain, they would need to convince the entire network to participate. In addition, network participants have a financial incentive to act honestly. Accordingly, the Bitcoin network is one of the most secure computing networks worldwide.
Public blockchains require a framework to ensure that everyone is on the same page and does not attempt to defraud the network. To achieve this, blockchain networks use a consensus mechanism. Bitcoin uses the proof-of-work (PoW) mechanisms to prevent double-spending of crypto assets. Special nodes called mining nodes use powerful mining equipment to compete against one another to solve a complex math puzzle.
The first mining node to complete the puzzle earns the right to validate a transaction and add it to its block before appending it to the blockchain. Bitcoin miners expend a great deal of electricity during this process. In return, they receive newly minted Bitcoin (BTC) as block rewards. Save our “Blockchain Explained” article to learn more!
Public, Private, Permissioned, and Hybrid Blockchains
When we think about blockchains, we usually think about public blockchains such as Bitcoin. Public blockchains are not controlled by any single party or governing body. Instead, a decentralized network of nodes is responsible for maintaining the blockchain. However, private and permissioned blockchains allow for a greater degree of flexibility, particularly for businesses.
Anyone can join a public blockchain network. Also, anyone can view activity on public blockchains. With private blockchains, only a specific group of verified people can participate. Furthermore, private blockchains enable operators to edit, delete, and amend data, whereas public blockchains are immutable.
A permissioned blockchain is a hybrid solution that incorporates features of both public and private blockchains. Permissioned blockchains allow operators to allocate permissions and access to different users throughout the network. Also, operators decide which participants can write data onto the ledger and who can view it.
Hybrid blockchain solutions allow businesses to benefit from the transparency and security of public blockchains while providing greater flexibility and bespoke parameters to meet the needs of specific use cases. Check out the Blockchain for Enterprise course at Moralis Academy to learn more about enterprise blockchain use cases. This course covers everything your team needs to integrate enterprise blockchain solutions using Baseline Protocol, Hyperledger, and Unibright.
Also, we show you how major corporations such as Microsoft and Coca-Cola are implementing hybrid blockchain solutions. Head over to our Blockchain for Business page to create a bespoke package and take your corporate training to the next level with Moralis Academy.
Smart Contracts
Smart contracts are pieces of self-executing code that automate the terms of agreements between two parties. These contracts exist on blockchains. They enable parties to enter into agreements without the need for trust. Furthermore, smart contracts are immutable, meaning that once they are deployed, nobody can alter them.
Smart contracts can automate the terms of all kinds of agreements without relying on any kind of central authority or enforcement procedure. Prominent use cases for smart contracts include the creation of synthetic assets, decentralized exchanges (DEXs), and marketplaces. However, smart contracts can also facilitate complex agreements for nuanced use cases. In addition, smart contracts can help to reduce costs and speed up efficiency by removing intermediaries and trust. Moreover, smart contracts enable you to automate many different aspects of your business.
One of the most popular use cases for smart contracts is decentralized finance (DeFi). DeFi protocols provide permissionless financial services on the blockchain that operate outside of legacy financial institutions. DEXs allow parties to exchange crypto assets without order books or a central point of authority. However, programmers can use smart contracts for various applications outside of finance.
If you want to introduce smart contract programming to your development team, we highly recommend the Ethereum Smart Contract Programming 101 course at Moralis Academy. This course is the perfect primer to help your team get to grips with building and deploying smart contracts on Ethereum. Also, save our “Smart Contract Frameworks for Developers” article to learn more about smart contract tooling.
Blockchain Use Cases in Business
Blockchain use cases in business are becoming increasingly diverse and varied. Below, we take a look at some of the most compelling examples of how blockchain can optimize business practices.
Instant Payments
Cross-border payments are notoriously slow and expensive. Blockchain allows anyone in the world with an internet connection to send money to anyone else in minutes. Also, blockchains facilitate secure, low-cost, high-frequency payments from anywhere in the world. This has helped small business owners around the globe avoid the effects of local currency instability. Plus, crypto payments are becoming a popular way of purchasing goods and services.
Cryptocurrencies act as an efficient unit of account and medium of exchange for any business with a product or service to sell. This includes point of sale, online purchases, and micropayments. Also, businesses can accept regular crypto assets such as Bitcoin (BTC) and Ethereum (ETH) or take payments in US dollar-denominated assets like USDT or USDC.
Security
A single point of failure defines most siloed databases, making them vulnerable to attacks. However, data stored on a public blockchain, such as Ethereum, is incredibly difficult to exploit. Also, hybrid blockchain solutions enable businesses to benefit from the security of public blockchains while benefiting from the gatekeeping features of private blockchains.
Automation
Smart contracts enable businesses to automate various agreements without the need for trust. When used in conjunction with the internet of things (IoT) devices, smart contracts can automate the distribution of tasks throughout networks and automatically execute orders. In addition, smart contracts can automate legal agreements for several applications.
Data Storage and Transfer
Decentralized data storage is an excellent way of securing sensitive data on the blockchain. It involves renting hard drive space from a network of nodes that have a financial incentive to secure your data on a leading blockchain network. Your data is encrypted on multiple machines worldwide, making it resistant to natural disasters and power shortages.
Communications
Blockchains allow for unprecedented levels of data integrity. Unlike traditional email providers and messaging services, blockchain-based communications services offer unparalleled security using the latest cryptography and decentralized technologies.
Record Keeping
Blockchains provide an immutable, transparent ledger of events. When data is written into a public blockchain, nobody can alter it. Also, private and hybrid blockchain solutions enable operators to give edit permissions to small groups of trusted parties. This way, businesses can decide what data they want to be made available and who they want to publish it. Also, hybrid blockchains enable sensitive data to be stored on a public blockchain without anybody having knowledge of what is contained within the data using zero-knowledge proofs.
Identity Management
One of the most exciting blockchain use cases for businesses is certification and identity management. Blockchain-based identity management solutions prevent IDs from falling into the wrong hands. Also, it allows multiple certifications to be stored securely in a single blockchain wallet.
Insurance
Blockchain and smart contracts can automate insurance claims and significantly increase efficiency and case settlement speeds. Minor disputes can take up a lot of time and resources. Settling these on the blockchain means that businesses can allocate time and resources to the things that really matter. Furthermore, it removes the need to trust third parties.
Supply Chain Management
Supply chain management is one of the most prominent blockchain use cases for business and enterprise. Blockchain enables businesses to create a transparent proof of provenance throughout each step of the supply chain. Also, blockchain-based technologies can minimize human error, prevent compliance violations, enforce tariffs, and automate purchasing agreements.
Furthermore, blockchain-based supply chain management systems help to reduce counterfeiting and enable multiple logistics networks to share data. From manufacturing to warehousing and shipment, blockchain can help optimize each step of the process. Also, the global standards body GS1 is implementing blockchain technologies to create a framework for optimizing global supply chain regulations industry-wide.
Check out the OriginTrail 101 course at Moralis Academy to learn more about blockchain use cases in supply chain management. OriginTrail is a leading provider of blockchain-based supply chain solutions that creates logistics solutions for Fortune 500 companies in manufacturing, retail, food, and fashion. This course is a must if you want to learn how to incorporate blockchain into your business to reduce emissions and optimize your logistical infrastructure.
Which Sectors Use Blockchain?
Blockchain lends itself to financial transactions. However, blockchain use cases extend much further. For example, many internet of things (IoT) projects rely on blockchains for storing data securely. Also, IoT devices play an essential role in blockchain-based supply chain solutions. Furthermore, cryptocurrency mining is becoming an increasingly popular way for electricity companies to harness excess and waste energy.
In addition, non-fungible tokens (NFTs) revolutionize modern art and are an essential part of decentralized gaming and metaverse platforms. NFTs facilitate digital and virtual land ownership. Plus, the technology lends itself to real estate and fashion, making NFTs an innovative form of audience engagement and marketing for brands industry-wide.
Blockchain Use Cases in Business – Summary
Most people associate blockchain with cryptocurrencies. For many years, finance was the primary use case for blockchain. However, this technology is becoming an essential part of businesses worldwide.
The use of blockchain in business and enterprise is evolving rapidly to meet increasing demand. Also, several innovative blockchain use cases in business are helping the broader blockchain community to develop the next generation of decentralized applications (dapps) designed specifically for enterprise needs.
Moralis Academy is the best place online to learn Web3 development. If you manage a team of developers and want to know how to incorporate blockchain into your business with minimal friction, check out the Blockchain Business Masterclass course at Moralis Academy. Also, take a look at the Moralis Projects section of our website to learn how to build a range of fun Web3 projects for free.
Moralis Academy helps teams upskill and prepare for a future where Web3 plays a prominent role. Companies in various sectors are implementing decentralized technologies for a variety of applications. Get in touch with Moralis Academy today, and let us create the perfect blockchain education package to help you and your team thrive in the world of Web3.
