Experts say blockchain technology will be useful in many industries

By Alexa Adler
Medill Reports

As bitcoin prices fluctuate, indicating uncertainty about the ultimate viability of cryptocurrency, other use of its underlying blockchain technology is increasing and may represent the future of information transfer technology in many industries, including banking, and to some extent, healthcare.

In downtown Chicago, cryptocurrency experts gathered Wednesday evening to discuss future uses of blockchain in multiple industries before an audience of many developers at a Future of Blockchain meetup.

“I think everybody views bitcoin as the first proof of concept of blockchain and everybody is waiting to sort of see what’s next, what happens, and how does it evolve,” said Dr. Tejas Shastry, vice president of data science at GreenKey Technologies.

In blockchain transactions, data is transmitted and stored in multiple nodes distributed throughout the cloud. While it has potential applicability in many industries, some industries might be better suited for it than others, the experts said, notably industries that handle transactions and data fully digitally.

According to Daniel Mason, vice president of business development at Springcoin, “Things like file storage, identity management, things that involve digital rights management, like music or stock photography, or things where the actual licensing or the information and the assets themselves are all digital are where I think there are easy wins. People talk about real estate and medical and supply chains and these are great use cases, but when you have to tether an off-line thing to an on-line thing, it adds a lot of difficulty.”

In healthcare, Dr. Conrad Barski, CEO of Forward Blockchain, said he believes that while there are many immediate uses for blockchain technology in improving hospital quality by creating auditable records to better keep track of things like medical licenses and equipment inspections, privacy concerns and the HIPAA privacy law will limit its immediate use in keeping track of patient records. He stated that HIPAA may have to be amended to accommodate the use of blockchain for patient records.

One of the goals of blockchain technology is to eliminate intermediaries. This poses a potential problem for banks, which of up to now have served as the intermediaries in virtually all on-line transactions. For example, when you pay your credit card bill on-line, the credit card company contacts your bank and it is actually the bank that makes the payment.

In blockchain technology, parties contact one another directly, thereby eliminating the need for a bank to act as intermediary. By eliminating this intermediary role, for which banks are compensated, banks could lose a source of revenue.

While experts such as Shastry acknowledged that blockchain can “abridge” a bank, he said there’s utility for banks in using blockchain technology. “There are plenty of advantages that blockchains have for banks. Banks don’t want to be a point of failure. There have been times when banks have made mistakes, such as where there is a bad trade or a rogue trader out there who loses billions of dollars. Having a record of transactions that have happened across multiple financial institutions that no single party can tamper with is a huge advantage.”

Shastry sees advantages to banks in using blockchain technology to ”help them work with other financial institutions and to take away some of the costs that they incur on central recordkeeping that they do themselves.”

According to cnbc.com, Ripple, a blockchain network operator, has signed up numerous banks including Santander, UBS and United Arab Emirates-based RAKBANK.

In October 2017 banking giant JP Morgan Chase announced that with the participation of Australia-based ANZ and the Royal Bank of Canada (Australia), it would launch a new interbank payments platform powered by blockchain on the Quorum blockchain network that will save time and costs associated with interbank payment delays. Experts predict that as blockchain technology develops, and additional ways to maintain privacy for blockchain transactions are created, banks will find ways to use it not just in interbank transactions, but in transactions for retail customers as well.

Photo at top: Panelists speak at The Future of Blockchain event hosted by Tech in Motion: Chicago at mHub. (Alexa Adler/MEDILL)