Blockchain is the technology behind Bitcoin, a type of encrypted digital currency. But unlike Bitcoin, Blockchain is not a strictly financial tool. Although it is designed as a general ledger, in its simplest sense, it’s a way to move and store blocks of cryptographically validated data that users can’t corrupt. In other words, it creates a transparent paper trail that anyone can access, but no one can alter. That makes Blockchain far more than a financial tool—it makes it the latest way of sharing, validating, or otherwise endorsing almost any kind of value point. Now we will look at some interesting places Blockchain may revolutionize the future and a couple of places it is making a difference today.
Impact on Audit Practices
Like most forms of technology, blockchain in accounting and audit greatly reduces the potential for errors when reconciling complex and disparate information from multiple sources. Further, accounting records are not alterable once committed under blockchain, even by the owners of the accounting system. “In the future, virtually every function in the world of Financial Services will be displaced, disintermediated and decentralized,” said Ron Quaranta, Chairman of the Wall Street Blockchain Alliance. Because every transaction is recorded and verified, the integrity of financial records is guaranteed. While impressive, this technology has the potential to greatly reduce or even eliminate the need for auditing resources—potentially disrupting the accounting profession as a whole. “Our technology has finally caught up with our desire to transact, without the need to trust the other party, and without the need for an intermediary,” said Quaranta.
Smart Contracts in the Legal Profession
There is a digital revolution going on in the legal industry and blockchain is the technology leading this transformation. The law is being digitized. If you have ever had to close a mortgage or been part of any legal dispute you know that lawyers are good at creating tons of paperwork.
If we can digitize the process of keeping track of the paper trail, then it will reduce the cost and potential for human error. It could be a game changer. Firms can focus on recording everything on a shared ledger that becomes irrefutable digital proof that this legal event happened between two parties. This could be anything from a marriage to a divorce proceeding; a house sale to a land reclamation; and anything else that involves digital proof. Cutting costs out of the legal system from administration to time would be a game changer for the legal profession.
Impact on Contract Ordering and Signing
Think of all those components being bought and sold in the supply chains of the world, and then think about all those components being recorded in near real-time on a shared ledger. They have been talking about having real time transactions around bills of lading and letters of credit but the challenge has been recording of the bill and then documenting the movement of the assets.
If we digitize the bills and letters of credit, then you have a more real-time view of the world and supply chain. It is a smarter system because you can record more than just a product’s serial number and value like the current systems allow.
You can record virtually any other information you want like destination, who is shipping it, when it reaches port, tax, and government clearance. That is why it’s a smarter tracking system. The banks that invests and adopts this sort of system will have a competitive advantage in the future.
Transparent Digital Voting Process
Think about it for a minute. A secure voting record that requires authentication of a voter’s identity and has a trusted tally. Blockchains can serve as the medium for casting, tracking, and counting votes so that there is never a question of voter-fraud, lost records, or fowl-play. By casting votes as transactions within the blockchain, voters can agree on the final count because they can count the votes themselves, and because of the blockchain audit trail, they can verify that no votes were changed or removed, and no illegitimate votes were added.
Impact on Sales and Funds Transfer
Blockchain technology enables assets to be transferred directly from user to user, removing any middleman – one of its many advantages. These assets could be anything from cryptocurrencies to data such as invoices, insurance documents, or shipping receipts.
To take the simplest example, a person can directly transfer a cryptocurrency like Bitcoin to family members, without the backing of a financial institution or by owning a banking account. Both parties can trust that the transfer is secure and forever recorded in the cryptocurrency’s blockchain.
Healthcare institutions suffer from an inability to securely share data across platforms. Better data collaboration between providers means higher probability of accurate diagnoses, higher likelihood of effective treatments, and the increased ability of healthcare systems to deliver cost-effective care.
Blockchain can allow hospitals, payers, and other parties in the healthcare value-chain to share access to their networks without compromising data security and integrity. To give you a simple example, a hospital has up to 20 different ways to enter a patient’s date of birth and no ways to standardize it. Blockchain would allow the hospital to tie a patient to their data rather than tie them to their identity.
As mentioned above, most of these applications are still underdeveloped. The future potential of the Blockchain applications is still unraveling. The next couple of years will be all about experimenting and applying to all aspects of society. Regardless of which application comes first on a global scale, the bottom line is, Blockchain is here to stay and is transforming how our society functions.