Benefits of blockchain
The benefits of blockchain are increasing trust, security and transparency among member organizations by improving the traceability of data shared across a business network, plus delivering cost savings through new efficiencies.
Building trust and boosting the bottom line
Blockchain for business uses a shared and immutable ledger that only members with permission can access. Network members control what information each organization or member can see, and what actions each can take. Blockchain is sometimes called a “trustless” network, not because business partners don’t trust each other, but because they don’t have to.
This trust is built on blockchain’s enhanced security, greater transparency and instant traceability. Beyond matters of trust, blockchain delivers even more business benefits, including the cost savings from increased speed, efficiency and automation. By greatly minimizing paperwork and errors, blockchain significantly lowers administrative burdens and transaction costs while reducing or eliminating the need for third parties or middlemen to verify transactions.
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Your data is sensitive and crucial, and blockchain can significantly change how you view your critical information. By creating a record that can’t be altered and is encrypted end-to-end, the blockchain helps prevent fraud and unauthorized activity.
You can address privacy issues on the blockchain by anonymizing personal data and by using permissions to prevent access. A network of computers, rather than a single server, stores information, making it difficult for hackers to view data.
Without blockchain, each organization has to keep a separate database. Because blockchain uses a distributed ledger, it records transactions and data identically in multiple locations.
All network participants with permissioned access see the same information at the same time, providing full transparency. All transactions are permanently recorded, and are time- and date-stamped. This capability enables members to view the entire history of a transaction and virtually eliminates any opportunity for fraud.
Blockchain creates an audit trail that documents the provenance of an asset at every step on its journey. In industries where consumers are mindful of environmental or human rights concerns related to a product—or where counterfeiting and fraud present challenges—this provides clear and verifiable proof.
With blockchain, it is possible to share data about provenance directly with customers. Traceability data can also expose weaknesses in any supply chain, where goods might sit on a loading dock awaiting transit.
Traditional paper-heavy processes are time-consuming, prone to human error, and often requires third-party mediation. By streamlining these processes with blockchain, you can complete transactions faster and more efficiently.
You can store documentation on the blockchain along with transaction details, eliminating the need to exchange paper. There’s no need to reconcile multiple ledgers, so clearing and settlement can be faster.
“Smart contracts” can automate transactions, further increasing your efficiency and speeding up the process. After the prespecified conditions are met, it automatically triggers the next step in the transaction or process.
Smart contracts reduce human intervention and reliance on third parties to verify the fulfillment of the contract terms. In insurance, for example, after a customer has provided all necessary documentation to file a claim, the system automatically settles and pays the claim.
Blockchain benefits in supply chain and food chain
Building trust between trading partners, providing end-to-end visibility, streamlining processes and resolving issues faster with blockchain all add up to stronger, more resilient supply chains and better business relationships. Plus, participants can respond more quickly when disruptions arise. In the food industry, blockchain can help ensure food safety and freshness, and reduce waste. If contamination occurs, you can trace the food back to its source in seconds rather than days.
Banking and financial industry blockchain benefits
When financial institutions replace old processes and paperwork with blockchain, they realize several benefits. These benefits include removing friction and delays, and increasing operational efficiencies across the industry, including global trade, trade finance, clearing and settlement, consumer banking, lending and other transactions.
Healthcare blockchain benefits
In an industry troubled by data breaches, blockchain can help healthcare improve security for patient data while making it easier to share records across providers, payers and researchers. Control over access remains in the hands of the patient, increasing trust.
Pharmaceutical blockchain benefits
As pharmaceutical products move through the supply chain, the system records every action. The resulting audit trail allows tracing an item from origin to pharmacy or retailer, helping to prevent counterfeiting and enabling manufacturers to locate a recalled product in seconds.
Government blockchain benefits
Blockchain can help governments work smarter and innovate faster. Secure sharing of data between citizens and agencies can increase trust while providing an immutable audit trail for regulatory compliance, contract management, identity management and citizen services.
Insurance blockchain benefits
Insurance companies are using blockchain and smart contracts to automate manual and paper-intensive processes such as underwriting and claims settlement, increasing speed and efficiency, and reducing costs. Blockchain’s faster, verifiable data exchanges help reduce fraud and abuse.
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