Blockchain has gotten a lot of attention as the foundation for cryptocurrency transactions, but the technology has many uses beyond keeping a record of who’s exchanged bitcoins with whom. Blockchain is, at its simplest, an open ledger that isn’t owned by anyone. It’s a technology that is used to make financial transactions, sure, but its decentralized nature means that people, businesses, and governments can use it for recording all sorts of information exchanges.
Here are just a few of the most important things you should know about this transformational technology.
1. It can be used to assess scientific research claims.
A recent Scientific American blog post says that about 2.5 million scientific studies are published every year, but researchers have a difficult time authenticating the results. In fact, over two-thirds of scientists who try to replicate another researcher’s results fail to do so. But blockchain could help with that, says the article: “Blockchain would make sharing, authenticating, and certifying information much faster and easier — and render it nearly impossible to alter data.”
2. Blockchain technology has managed and distributed more than $270 billion in transactions.
Research from Gartner says that 300 million blockchain transactions were processed through the end of 2017.
3. Blockchain’s market size will be $60 billion by 2024.
Blockchain’s market size was just $708 million in 2017, but it’s expected to skyrocket to $60.7 billion by 2024. Most of the growth over the next few years will likely come from the financial-services space.
4. Some tech companies are making money from the trend, but they remain cautious.
NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) sell their graphics processing units (GPUs) to companies and individuals who use them to mine cryptocurrencies, like bitcoin. But the processors can also be used for blockchain ledgers.
NVIDIA’s CEO Jensen Huang recently said in a CNBC interview that “[b]lockchain’s going to be here for a long time and it’s going to be a fundamental new form of computing.” He added that blockchain and cryptocurrencies will both be important drivers for GPUs.
NVIDIA doesn’t break out its GPU sales for blockchain specifically, but it did say that in its third quarter of fiscal 2018, it made $70 million from GPU sales for cryptocurrency mining. Of course, blockchain and cryptocurrency mining aren’t the same things, although they’re related, so it’s difficult to nail down just how important blockchain is to NVIDIA right now. But what we do know is that the company isn’t betting its future on either trend. NVIDIA’s CFO Colette Kress said on the company’s recent earnings call: “While the overall contribution of cryptocurrency to our business remains difficult to quantify, we believe it was a higher percentage of revenue than the prior quarter. That said, our main focus remains on our core gaming market, as cryptocurrency trends will likely remain volatile.”
Similarly, AMD is benefiting from blockchain, but it still represents a small portion of the company’s total sales. The company recently said in a statement that the percentage of revenue related to blockchain was in the mid-single digits for 2017. It added: “We appreciate the time and attention that investors continue to pay to Blockchain and cryptocurrency, but would also like to keep it in perspective with the multiple other growth opportunities ahead for AMD.”
5. It’s being used to add transparency to media-buying.
Salon Media Group is testing a blockchain ledger created by International Business Machines (NYSE:IBM) to record ad-buying contracts, impression data, and how much Salon will be paid for the ads. Additionally, Unilever has begun using IBM’s blockchain to buy some ads in the U.S. and keep track of its transactions. Tech executives rank IBM as one of the top blockchain companies in 2017, with 43% rating IBM’s blockchain tech above all its competitors’ systems, according to Juniper Research.
6. The tech can be used to manage power usage by electric companies.
Blockchain can be used to modernize how electricity consumers share usage information with their utility providers, by securely and automatically sending their monthly consumption to a decentralized ledger. An MIT Technology Review article noted last year that energy producers and consumers could use blockchain to easily share data with each other: “Advocates say the technology could be especially promising in industries where networks of peers — electricity producers and consumers, connected via the grid, for instance — depend on shared sets of data.”
Some people in Brooklyn, New York, have even begun setting up their own “microgrids” by generating their own electricity using solar panels and then selling the power to their neighbors using a blockchain system. That’s an extreme example of blockchain’s possibilities within the energy market, but simpler uses involve using the tech to easily and efficiently exchange metering and billing information with utility providers.
7. Blockchain adoption could revolutionize the global shipping industry.
It takes a lot of complex logistics among companies using dozens of shipping lanes to move goods around the world. But the shipping industry is looking to blockchain to simplify this process by reducing days of paperwork to just minutes. A recent Bloomberg article said that the tech could be the biggest transformation in shipping since the standardization of container sizes in the 1960s. If blockchain does indeed make it easier for companies to organize shipping, that could reduce the cost of goods sold around the world.
8. The U.S. government could use it to manage wireless spectrum.
There’s a very limited segment of the airwaves that the U.S. government currently licenses to commercial broadcasters and amateur operators. Some parts of this spectrum are used for things like commercial cellular signals, others are set up for government signals, and others are used for things like your home Wi-Fi.
Blockchain could be used to manage these airwaves by using the tech to set up multiuse spectrums based on demand. Companies and individuals would be able to communicate their spectrum needs through a decentralized blockchain, which could reduce the cost of allocating spectrum to only certain types of devices and systems, according to Wired. It may seem like an odd way to use the tech, but it’s yet another example of blockchain’s versatility.
9. It’s being used to create digital IDs for people.
More than 1 billion people in the world have no way to prove their identity, but a Microsoft(NASDAQ:MSFT) blockchain project wants to change that. The company wants to create decentralized digital identification, assigning each person a unique identifier that could be used for banking, health insurance, and even travel.