[Also available on LinkedIn, here.]
[Versión en español, aquí.]
In the first part of this article, I wrote about the basic blockchain ideas: What it will be capable of and why it will change the world.
This second and last part is about the most common use cases, in which many companies are working intensively. There are countless: payments, micropayments, digital identity, voting in elections or shareholders’ meetings, international trade, logistics, property registration, data, logistics, capital markets, etcetera. Let’s comment on some of the most known, already operational or imminent.
Payments
If something can be disrupted in the short term with the use of blockchain, that’s payments. Specifically, according to information published in The New York Times, Facebook is working on how to launch a payment service for WhatsApp in less than a year with its own cryptocurrency, i.e. blockchain. WhatsApp will allow instant payments worldwide. Sending money will be same as sending a photo on WhatsApp. Incredible, isn't it? At the moment, they have to overcome technological and regulatory pitfalls. Zuckerberg has 50 people working in a secret and restricted room on this project. He said a few weeks ago that he wanted to use the blockchain to improve Facebook security.
"Facebook will launch a payment service for WhatsApp soon with its own cryptocurrency, i.e. blockchain."
Another example, this particular one occurred and is operational: Banco Santander launched One Pay FX in April 2018. It’s an innovative and revolutionary service that allows you to make instant payments from several countries with different currencies (dollar, euro, pound sterling), something that was impossible until then. It doesn't charge commissions and has a very competitive exchange rate, similar or better than Transferwise. Santander announced its intention to launch the service to non-customers. I’ve already tried One Pay FX and it works. "It just works," as Steve jobs would say.
JPMorgan is working on a payment solution for companies using blockchain: they will create a self-managed cryptocurrency, JPM coin, equivalent to a dollar, i.e. it will have a stable value and cannot be used to speculate (this will be the same thing in WhatsApp), something that usually happens with cryptocurrencies. Normally, the JPM Coin should fly, probably instantly, around the world and, once in the country of arrival, the money would be delivered in local currency after a foreign exchange transaction. When it’s launched, it will probably be the first cryptocurrency to be managed by a bank, if it’s not advanced beforehand. They'll start testing it in a few months. The bank transfers six trillion dollars every day to businesses around the world.
"In 2018, Santander launched One Pay FX, a revolutionary service to make instant payments from several countries with different currencies, impossible until then."
Micropayments
I separated micropayments because it’s an area rich in possibilities. Currently, it’s not possible or complex to manage micropayments (for example, two cents or 20 cents) because the available payment infrastructure has a cost greater than or equal to these payments. If the technology was much cheaper and invisible, negligible amounts could be easily charged in a recurrent manner. For example, for reading an article in an online newspaper. In Spain, many large companies and SMEs are in a unique blockchain consortium in the world called Alastria, composed of hundreds of companies, large and small, who are already investigating use cases with this method. This will open up a world of gigantic possibilities.
Digital identity
Blockchain permits you to manage digital identities in a much more secure and private way, decentralized (information can be found on your device, not in the cloud) and with full control of personal data, even without the need to use usernames or passwords, as does the Civic startup. One of the first objectives of Alastria is to offer a digital identity, for which they collaborate with notaries, lawyers and the state administration. All services and new business models within Alastria would benefit from a unique digital identity for each person.
"Alastria will offer a digital identity, for which they collaborate with notaries, lawyers and the state administration."
Votes
There are several places in the world testing blockchain to vote in elections: West Virginia in the United States, South Korea and Japan. How long will it take to get to know the scrutiny...? You’re right. No time: 100% instantly. Whoever likes to follow scrutiny in elections, like me, the process will be less exciting, yes. You can also vote with the blockchain at shareholders’ meetings, which several banks and Broadridge, a financial technology company, tested last year (more information in the appendix).
International trade
The financing of imports and exports of products used by companies from one country to another takes a lot of money. For example, wheel tires for a bicycle manufacturer or OLED mobile screens for a mobile manufacturer. The major European and Asian international banks have grouped together in a consortium called we·trade in Europe and using blockchain to operate. They are completing pilot tests.
Logistics
Traceability and transparency are the Holy Grail of logistics companies and their users. Blockchain can not only help, but can also perform actions when a package moves around the world or reaches its destination. According to TransRisk, there are every day conflicts related to payments worth 140 billion dollars. Most of the time, because the invoice is not correct. Blockchain could put an end to this situation and it’s hoped that great progress will be made in three or four years.
"The best is yet to come, also in blockchain. It will take time, but its strength is unstoppable."
In this sector, seasoned with the beverages industry, a curious investigation tries to demonstrate how it can guarantee the quality of the gin ingredients. Cheers!
There are many other use cases, probably “infinite” and for any business sector. Some areas not mentioned: health, energy, tourism, telecommunications, insurance, civil engineering, architecture, agriculture…
This next sentence is very tight, but it touches my mind: the best is yet to come, also in blockchain. It will take time, surely years, and what will emerge is more or less revolutionary, but its strength is unstoppable.
Annex with links
The New York Times about WhatsApp payments.
More on One Pay FX. Also at Financial Times here.
CNBC on the JPMorgan cryptocurrency.
Blockchain for voting in West Virginia (USA), South Korea and Japan.
Financial Times about blockchain in shareholders’ meetings. Press release here.
More on Alastria.
More on we·trade.
Blockchain for gin.
Photo credit: IBM.
First part of this article: How blockchain technology will change the world (1).
I'm on Twitter if you want to follow me: @OvidioCordero. And LinkedIn.
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