While many still associate blockchain with bitcoin and cryptocurrency, the technology’s capability extends far beyond digital currency. The blockchain is a distributed digital ledger that allows users to transfer value or information without a third-party intermediary securely. This makes it possible to create trust between two unknown parties without relying on an outside authority to validate transactions, which make it so revolutionary.
Businesses of all sizes recognize the value of blockchain apps and how they can be used in various applications, including supply chain management, financial services, healthcare, and more.
Here are five types of blockchain apps you should know about:
1. Decentralized apps help build trust between companies.
A decentralized application (DApp) is an open-source technology that uses blockchain to store data in a public ledger shared across a network of computers (nodes). DApps can be used for anything from managing supply chains to payroll. Because DApps are decentralized, they remove the need for central servers and allow peer-to-peer transactions among participants. This eliminates the need for intermediaries, which results in faster transactions with reduced costs and increased trust between participants.
2. Smart contracts automate business processes while reducing risk.
This is one of the most exciting possibilities for blockchain tech, particularly for business applications. They are self-executing digital contracts on the blockchain. The terms of each contract are set by the parties involved and stored in the blockchain itself. When specific conditions are met, payments or other actions are executed automatically. Smart contracts eliminate the need for intermediaries or third parties when executing agreements between two or more parties, reducing agreement execution times from weeks to minutes.
3. Employee compensation and securing identities.
Blockchain technology can also help improve employee compensation by eliminating intermediaries in payroll management, which has been notoriously expensive for businesses. Through blockchain apps, employees get paid directly. Companies can use cryptocurrency tokens to pay employees for their labor without incurring banking fees and transaction costs associated with traditional currency. The tokens can also be used as non-monetary employee benefits, such as paid time off.
In the digital world, our identities are at risk of being compromised and twisted to suit the purposes of criminals. This could be done through theft, fraud, or impersonation. Today’s industries, such as banking and healthcare, require a user to have multiple login details spread across different platforms. A blockchain can provide a single source of truth for all these platforms to verify a user’s identity.
4. Transportation and logistics.
Transportation is one industry that is exceptionally well suited to blockchain technology. Imagine if we could apply blockchain technology to vehicle registration records, driving history records, and accident reports? An identity-based system would allow insurers and auto manufacturers to access customer data securely, allowing them to offer services tailored specifically for each customer. This would increase consumer satisfaction and allow new business models that incentivize safe driving practices.
5. Give users control of their data.
Many companies are pursuing the goal of giving consumers control over the data they produce online — for example; Facebook announced plans to let users delete any record of their browsing history from its servers. But this goal is challenging to achieve with the technology we have. Blockchain technology enables new models for managing data that protect user privacy while also allowing companies to derive value.