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Assuming that you have been diligently trying out the commands in our article series, your own private blockchain has started to sail on the local platform. A private blockchain is put into production use in so many aspects of our life: to make payments faster and more secure in the financial world, to lower medical costs in the healthcare industry, and to make the process more transparent in the food supply chain. Our generation is leading the most comfortable and convenient life in history. But there is still room for the game-changing blockchain technology to solve the issues we are facing and improve the current protocols.
Blockchain started as the peer-to-peer electronic payment solutions, and quickly found success in broad financial service, banking, and payment industries.
There are great opportunities in the payment market considering its size. According to the Global Payments Study by McKinsey in 2018, the revenues of global payments raised 11% in 2017, up to 1.9 trillion dollars. It’s the revenue of payment industry, as well as cost for transactions. Blockchain-enabled model further supports banks for frictionless real-time payments with lower costs.
Ripple came into to the picture with blockchain technology. In 2012 Ripple Labs Inc. released a real-time gross settlement system, including currency exchange and remittance network. RippleNet provides service to send money globally by connecting the banks, payment providers and digital asset exchanges. This payment network involves 27 countries. Ripple’s solution could be an option to support banks to make transactions directly and bring real-time certainty to settlement. Assuming there are 100 million transactions per year, and annual transactions value as 5 trillion dollars. If you apply the same cost model as Ripple does, which saves up to 38.18 dollars per payment, the annual saving will be 3.82 billion dollars. Lowering the cost of transactions is not the only benefit private blockchain provides to banks, it opens door to opportunities for new use cases, clients, revenue and market. The errors, failures and reconciliation issues that might be happening during transactions can also be lower accordingly.
Ripple is not the only blockchain-based payment service. Mastercard and blockchain company R3 announced partnership for cross-border payment solution 2019 September. Facebook Libra is registering its payment system in Switzerland. And Swiss Financial Market Supervisory Authority (FINMA) published ‘stable coin’ guidelines on September, 2019.
We may expect objectives like financial inclusion, consumer protection and regulatory compliance to work together towards the same goal. The goal of offering a global currency and robust, secure infrastructure and empowering lives of people all over the world.
During an audit, an organization's financial statements will be evaluated to determine their accuracy and fairness. If all the transactions are recorded in an immutable blockchain as indelible marks, audits will become futile. There is still a chance that blockchain transactions will be logged in the wrong sections of financial statements. Or, the transaction itself may be illegal if, say, it's sent and received between parties, and then it might not comply with regulations. In some cases, it can even be sent as an off-chain agreement.
Internationally, the audit market is dominated by big players such
as PricewaterhouseCoopers (PwC), KPMG, Ernst & Young (EY), and Deloitte. All of them are bringing in blockchain innovations.
PwC announced a blockchain auditing service in March 2018. PwC France and Francophone Africa brought together experts specialized in cybersecurity and big data, auditors, and so on in its blockchain lab, located in Paris. The lab collaborated with Request Network, which is a project that's building a decentralized payment system for the Ethereum network.
KPMG, partnered with Microsoft, expanded its blockchain strategy to audit. Microsoft Azure's hybrid cloud capabilities, security at an enterprise level, and extensive compliance certification portfolio were combined by KPMG to break down complex business workflows. The first joint blockchain nodes opened in Frankfurt and Singapore in February 2017.
By April 2018, EY had announced its blockchain analyzer to make the life of the audit team easier in sourcing all transaction data across the organization from multiple ledgers on the blockchain. Auditors will be able to do the following:
In 2017, Deloitte released 90,000 certificates on the private blockchain, with an international accredited registrar DNV GL. How does this work? As soon as a new certificate is issued, it will be digitized and stored in a private blockchain. In the private network, each certificate is tagged uniquely and can be traced. Simply scanning a QR code made it possible for anyone to verify that a company is certified.
Healthcare is another industry that has strived to find ways to maintain health quality and lower the overall cost. Blockchain has the potential to disrupt the entire industry.
Blockchain in healthcare can help improve medical record access. MedRec, a system built on a small-scale private blockchain, prioritizes patient agency, providing a transparent and accessible view of medical history. Similar projects, such as phrOS, were released by the Taipei Medical University Hospital and Digital Treasury Corporation. This sounds exciting, right? Finally, someone is going to do something for electronic health records scattered across different providers!
Cutting medical costs can be done by using blockchains. ConnectingCare, a project of SimplyVital Health, uses algorithms to forecast medical cost in near-real time. This leads to the next project, Health Nexus, which stores patient data for all the providers to view. And it may also make it possible for patients to sell their medical records to researchers to reduce their medical costs.
Drugs are supposed to heal people or at least cause no harm. But according to the World Health Organization, tens of thousands die from the fake drugs trade, which was worth 30 billion dollars in 2017. FarmaTrust is a project that's designed to put an end to this. It can track and trace the inventory of drugs and provide transparency into the life cycle of the drugs.
Production use cases are not limited to the topics I have listed here. Private blockchains are making it easier to track clinical. It is also helping to secure better healthcare transactions and improve the way patients interact with doctors.
Applications a private blockchains are not only impacting us in the financial world and healthcare industry– they are impacting us everywhere.
A news article entitled one in every five fish sold is mislabeled drew my attention. I looked into the facts and found that, according to a study from UCLA and Loyola Marymount University, nearly half of the sushi served in Los Angeles may be mislabeled. To tell what's on your plate without carrying around a DNA toolkit, blockchains, with their accountability, can come to the rescue.
Having inherited the immutability of the blockchain, a private blockchain brings unprecedented transparency and efficiency to tracking food sources. Tuna is traced by Bumble Bee Foods using blockchain technology. Walmart deployed Hyperledger Fabric (an implementation of the blockchain framework) in the food supply chain. Tracing the source of contaminated foods used to take seven days, but now it can be as fast as 2.2 seconds.
Implementing private blockchains in the airline industry makes ticketing more transparent and secure at a lower cost. In 2018, China's largest retailer, JD.com, launched a blockchain platform, for better enterprise operation management. A private blockchain is marching into the real estate and rental industry, as well as in recruitment for large companies.
This article is written in collaboration with Brian Wu who is a leading author of “Learn Ethereum: Build your own decentralized applications with Ethereum and smart contracts” book. He has written 7 books on blockchain development.
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