1. Enabling distributed, independent markets
Blockchain allows asset owners to track and trade the value of value (such as untapped invoices), for example, in a more secure, transparent, private and self-coordinated “chain” transaction. This capability adds speed and flexibility to cash and asset management.
For example, by using Enterprise Resource Planning (ERP) applications to validate invoices, companies can quickly raise needed cash or accelerate cash flow by selling invoices on an autonomous invoice factoring marketplace.
The autonomous market for other assets will grow exponentially. Essentially, blockchain-based transactions reduce the need for third-party oversight because the software itself is a controlled, open framework that is visible to all transaction participants.
If a company can post the value of something to multiple potential buyers who have the trust and visibility to know that the thing is real and that the seller can't sell it twice, then there will be an open, transparent competition to buy those items, and the seller will get a better deal good price.
2. Reduce friction in business transactions
Managing spend is a challenge for most organizations. But blockchain enables businesses to create a self-managing network for suppliers and partners, automate contracts, provide instant payments, track the movement of goods, and have visibility into the entire supply chain. For example, if a company is transporting perishable goods in refrigerated containers, it can load an IoT sensor on a truck to invoke a smart contract on the blockchain if the temperature of the container exceeds a certain threshold. This will trigger the cancellation of the order, and it can also automatically create a new order so that a second shipment is sent immediately, and the truck of the faulty refrigeration unit can go to a repair facility for repair.
By reducing or eliminating human interaction, such a network can reduce transaction errors and lost information. And, by connecting buyers and sellers directly, transactions happen faster.
3. Manage and protect decentralized private records
The traditional approach is to use firewalls and restricted access, leaving the industry to rely on third parties for databases of shared information. As frequent high-profile data breaches show, this approach isn't always ideal.
A fundamental advantage of blockchain is that each individual data record or element is encrypted with the keys of the members of the blockchain. Cybercriminals need access to every key of every member to access all blockchain data. This is not to say that blockchain makes all data 100% secure, but it can help reduce the exposure of large numbers of private records in a single act.
A logical application would be employee or student records, where employers and educational institutions, or even industry accreditation bodies, could add new qualifications, grades or jobs. Imagine giving an employee a key that gives them access to his or her employee records as part of a secure blockchain, including HR. Individuals can safely share their college transcripts or employment history with other companies or educational institutions, rather than relying on facsimile copies that are unreliable and easily forged.
4. Track the origin of products and materials
Blockchain can help ensure the quality and safety of products, making it easier to track and locate products and materials in use.
For example, suppose an automaker forms a quality-focused blockchain that includes component suppliers, subassembly manufacturers, quality control suppliers, and public regulators (e.g., the National Highway Traffic Safety Administration). Recalls of defective parts may happen sooner. This is significant considering that thousands of people lose their lives each year due to defective auto parts.