How blockchain can be used beyond Bitcoin and finance

Bitcoin has been subject to so much misunderstanding and skepticism since its inception that the amazing technology behind it has been overlooked. To understand Bitcoin, we will focus on the technology behind it - blockchain.

During the Davos Economic Forum, Christine Lagarde, head of the International Monetary Fund, talked about virtual currencies and released an article titled "Virtual Currency and Outlook: Preliminary Thoughts". The article elaborated on virtual currencies and blockchain. "Distributed ledger technology improves financial efficiency by facilitating peer-to-peer transactions and reducing transaction time and costs, especially cross-border transactions... In addition to payment systems, distributed ledger technology can also be used as a fast, accurate and secure record system for many markets and financial market infrastructures, including for stock trading, central securities depository systems, securities clearing systems or trading resource repositories."

The application of blockchain is far more than Bitcoin, the two are intertwined. In fact, Bitcoin can be called the first perfect application based on blockchain technology.

Improve the ledger

Throughout history, records of transactions have often been an integral part of tracking information in business or government. These records form ledgers, which are used to keep these records. Blockchain enables digital distributed ledgers to record and store data. Data is 'distributed' across the network and can be open to everyone (no permission required) or restricted by participants ('permission required').

Blockchain’s distributed ledger has huge potential for cost savings, especially for international remittances in the banking system. According to an IMF report on virtual currencies, “The cost of sending remittances internationally is very high: in 2015, the global average cost of sending a small amount (e.g., $200) was 7.7%, although this has fallen from 10% in 2008. In contrast, the cost of using Bitcoin is about 1% (Goldman Sachs, 2014).” Blockchain-based remittance systems that banks are actively exploring are also already online; in the Philippines and Kenya, such platforms provide transfer services using Bitcoin and then back to fiat currency.

In addition to cost advantages, banks expect to gain operational efficiencies from blockchain. Using the technology can help them get rid of those "headaches" such as manual processing, brokers, large amounts of data entry and verification; blockchain can provide faster speed and higher accuracy.

Blockchain technology is seen as a great invention with great potential in many industries, such as music, healthcare, diamonds, real estate, etc. Even government departments are interested in this groundbreaking technology.

Blockchain is more than just finance

In a recent report, the UK government’s chief scientific adviser said, “Distributed ledger technology provides a framework for government to reduce fraud, corruption, errors and paper-based processing costs. It has the potential to redefine the relationship between government and citizens in terms of data sharing, transparency and trust. It has similar potential for the private sector.”

The diamond industry, which is highly susceptible to fraud, has also embraced blockchain technology. Everledger is a permanent ledger for diamond certification and the history of transactions associated with it. It provides proof for insurers, claimants and law enforcement. According to Everledger, “fraud costs insurers £200 million per year.”

Likewise, different industries can benefit greatly from blockchain technology. According to Ragnar Lifthrasir, putting property certificates on the Bitcoin blockchain will free the real estate industry from existing 18th century technology. Title insurance is a $20 billion industry. The total cost of preventing and dealing with title fraud is estimated to be $1 billion per year.

The healthcare industry has also shown interest in blockchain technology, with companies like Facto, Fierion, DNA.Bits, BitHealth and Gem being among such projects. A tweet in October 2015 revealed a project between Philips Health and Tierion. The healthcare sector stores a large amount of confidential information, such as medical history records, diseases, payments and treatments. Blockchain technology can not only provide a solution for the secure and private storage of this sensitive data, but it can also help reduce the huge costs that hospitals and healthcare providers face in managing patient and other information.

The music industry is not far behind, and has its own blockchain tailored for it, PeerTracks, a music streaming and retail company, and the first institution to use the new MUSE platform, has reached a partnership with the Danish exchange CCEDK and OpenLedger. OpenLedger provides a fiat currency gateway through the Danish registered company CCEDK - allowing anyone to buy MUSE with US dollars through the OPENMUSE/OPEN.USD market. On platforms using the MUSE network, such as PeerTracks, all payments from users and income generated by artists are denominated in the cryptocurrency US dollar, so there is no confusion about the cost of a track - and there is no problem of cryptocurrency volatility.

Blockchain technology is also used to create decentralized credit ratings and know your customer (KYC). In the 2015 Citi Mobile Challenge in Asia Pacific, Algorythmix was recognized as the most innovative blockchain application for "Cetas - Decentralized Credit Rating and Know Your Customer Framework. Cetas is a decentralized platform that uses blockchain technology to share KYC data."

There are also many projects around blockchain, such as Microsoft's (MSFT) Azure Blockchain Service platform, and the Open Ledger project led by IBM and the non-profit Linux Foundation. This project also involves many other large companies, such as Wells Fargo (WFC), London Stock Exchange, Accenture Consulting (ACN), Cisco Systems (CSCO), Digital Asset, Intel Corporation (INTC) and many other companies.

Conclusion

This is just a summary of some of the projects that are being done around the blockchain innovation technology, which is still in its infancy but is already challenging existing systems and attempting to disrupt them.

Original article: http://www.nasdaq.com/article/how-the-blockchain-is-being-used-beyond-bitcoin-and-finance-cm571563
By Prableen Bajpai
Translator: Next (8btc.com username)
Bitcoin address: 1Mwmes1CAwgvy5SEpjPAkbnp94BYtsRw66
Source: Babbitt Information (http://www.8btc.com/blockchain-beyond-bitcoin)