Reduction of expenses.
Most businesses today spend astronomical amount of money on compliance and error-proofing of processes. Blockchain technology could be beneficial in virtually any business or industry that cares about immutability of records, trust and protection of data. This article gives several practical examples about how blockchain could have reduce costs for businesses and organizations.
For example, according to various estimates, banks spend over $2 trillion annually (that’s trillion with a “t”) on fraud prevention and payment checking. Both of these functions are built into blockchain networks by default.
In regular banking, fraud prevention is similar to the problem of double spending and the issue of transaction finality on digital financial networks, both of which the networks such as Bitcoin have solved successfully.
Fraud prevention in banking includes making sure that incoming checks are actually original checks signed by a checking account owner. One of the true breakthroughs of Bitcoin was that the network was able to solve the issue of double-spending, which is when a party on a digital network sends money to several recipients at a time, similarly to how a fraudulent check claims rights to money it has no rights for.
Using blockchain in banking services can help banks both reduce spending on compliance because blockchains have some of the functionality built-in, and also automate a lot of the processes, which also means additional savings.
One of the biggest problems in real estate is that currently various government agencies maintain separate databases about real estate transactions and these databases are not connected to each other. This means that a person or an entity buying real estate needs to spend a significant amount of money of due diligence and checking all the various databases to make sure that the property does not have any unpaid liens and claims pending against it.
In many officers of records, clerks still type the information into computers manually and verify the information manually, which means a high chance of errors and a lot of expenses in salaries and benefits to municipal, county, state and federal employees. On a blockchain, each property could have its own profile, similarly to how each transaction on the Bitcoin network can have its own send to address. Then, all the transactions associated with a property could be tied to that property just like transactions are tied to addresses.
If you enter an address into a Bitcoin network explorer, you will be able to see all the transactions for that address. Each wallet on the Bitcoin network can have an infinite number of addresses, which is why it is recommended that users on the network use a new address for each new transaction. On a real estate network, this feature could be disabled and a real estate property could have one unique identifier that all the records would link to. Practically speaking, this means that verification of records about a real estate property could be almost instantaneous. All the historical information could be available and protected from damage and errors which would save a tremendous amount of money for all the parties involved in a transaction, including buyers, sellers and government agencies that keep the records.
Another area where blockchains could save a lot of costs is maintenance and transfers of medical records. Similarly to what is happening in the real estate industry, medical records of a patient can be located in a variety of locations, including hospitals, offices or different doctors, and so on.
Often, records are being made by hand, which means a lot of room and opportunity for errors. The process of the transfer of records can be long and complex. With blockchain, every patient could have a profile and all the records could be stored on a blockchain or at least linked to a blockchain.
Blockchains do not necessarily have to contain the records. Often, the issue is not about having a record, it is about finding whether the record exists. For example, if a real estate agent knows that a certain county has a record about a certain property, he or she can find that record relatively easily. The problem, therefore, is about knowing for sure if a property has records about it or not. The same issue exists in the medical industry and many other industries. For example, a patient may simply forget that a while ago he or she had the same issue he is having now and visited a doctor about the issue. He or she can be talking to a doctor and both the doctor and the patient could benefit immensely if the doctor knew about the previous visit related to the same health issue, but because of how the system of record keeping works now, this doesn’t always happen.
A blockchain with patient data could not the records themselves, but notes and links to the existing records. This way, a doctor could check a blockchain to see what is there, see the data from an office of a different doctor and request records directly. This way, all the information could be available, yet protected at the same time.