Blockchain is all the rage these days, and understandably so. But did you know that there are numerous other practical applications for tech startups?
In this syndicated blog post, Michael Hiles, the Founder and CEO of 10XTS (as well as Director of the Cincinnati Founder Institute) outlines just a few of the ways that blockchain can be utilized outside of financial services and government, specifically to help companies solve various common problems.
The article, "How Blockchain Can Help You Fund Your Startup", originally appeared on Linkedin, and has been republished below with permission.
Any tool looking for a problem to solve places constraints on the engineering of any solution. A tool-first approach leads to a higher potential of flawed engineering. Identifying the problem first, the looking at the available tools to solve any given problem represents a better approach.
One of the things we seek in this brave new world of blockchain-based technology is the examination of what problems can be solved with the technology as part of the discussion - but not necessarily the technology itself leading the discussion.
This will require a consultative approach to use cases representing opportunities. First, coming to a deep understanding of the problem itself, then evaluating the options for solutions of the problem. This is why we take a blockchain agnostic approach when it comes to available platforms.
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The full potential of blockchain technology is likely to be realized outside financial services and government. Blockchains are a foundational horizontal platform technology that could be used in any industrial sector including agriculture, utilities, mining, manufacturing, retail, transport, tourism, education, media, healthcare, and the sharing/P2P economy.
Generic applications in these sectors include:
Supply chain and logistics: tracking physical assets through changes in ownership and handling can be recorded and communicated through data stored on a blockchain. This implicitly creates provenance information for goods, and provides improved logistics visibility and supply chain quality. Key events within the supply chain could be linked to automatic payments with the use of smart contracts.
Internet of Things (IoT) storage, computation, and management: devices connected to the internet can use the blockchain as a persistent and highly-available storage solution, can use smart contracts to provide a global distributed computing capability, and can rely on the blockchain as a secure channel for receiving information about software and configuration updates and dynamically-delegated access control (including physical access control, for locking devices).
Metered access to resources and services: monitoring and payment for usage of utilities or services can be provided by IoT devices and associated smart contracts.
Digital rights and IP management: a blockchain can provide a trusted registry of media assets or other intellectual property, and can provide the ability to manage, delegate, or transfer access and rights information for those assets. Media files are not necessarily stored on the blockchain itself. Instead, cryptographic hashes, meta-data and other identifiers stored on the blockchain might be integrated with bulk off-chain storage.
Data management: a blockchain can create a metadata layer for decentralized data sharing and analytics. Although large datasets themselves are unlikely to be stored there, a blockchain can help to discover and integrate those datasets and data analytics services. Access control mechanisms implemented on a blockchain may allow public data sources to be integrated more easily with private data sets and analysis services.
Attestation and proof of existence: a blockchain can be used to record evidence of the existence of data or documents, by creating a timestamped record of a cryptographic hash of the contents of those documents. This can be combined with records of the attestation or witnessing of corresponding physical documents by trusted third parties. However, it can be significantly harder to demonstrate the uniqueness or non-existence of such document records, unless there is a widely-accepted strict normal form for their contents.
Inter-divisional accounting: multi-national companies or large enterprises with separate divisional business units, often have jurisdictional or governance needs to control their own internal accounting, and yet also sharing accounting information with other divisions. A straightforward application of blockchain technologies on a shared private network can create a shared distributed ledger of inter-divisional accounts at the interfaces between divisions. Here the role of non‑repudiation is for improved audit and change management of accounting information.
Corporate affairs (board and shareholder voting and registrations): the voting authorities of board members or shareholders in companies could be recorded and proxied on a blockchain. Smart contracts on blockchains could use that record to adjudicate votes conducted on the blockchain for specific motions. (As blockchain transactions are not necessarily hidden, cryptographic mechanisms may be required to prevent potentially undesirable strategic voting behaviors.)
These use cases represent a few areas where blockchain represents an opportunity to solve existing problems. In many of these cases, blockchain becomes a layer below existing systems of record and workflow processes. In those cases, blockchain will be better suited as an integration approach.
In other cases, blockchain may represent an entire disruption to the application layer itself, becoming an entirely disruptive rip-and-replace. Much of the current development fervor around public chain efforts involves wholesale replacement use cases, even to the point of relying upon new, unstable code and protocols. The potential risk must be evaluated against the use case to determine whether or not the business process requires an evolution, or a revolution.
At 10XTS, we're at the leading forefront of research and evaluation to help make those kinds of decisions - and ultimately build the proposed solution going forward.
