In 2018, NewtonX aggregated insights from 50 senior blockchain experts to forecast the top enterprise applications that blockchain would have in the coming year. The experts (ranging from the CEO of a smart insurance contracts company, to an executive spearheading blockchain efforts in a global bank) identified the top applications as: smart contracts for insurance, audit trails and smart contracts in finance, and workflow and transactions in supply chain management. In January 2019, NewtonX revisited this same panel of experts to evaluate last year’s top applications, and to compare the trends and applications of blockchain from 2018 to those for 2019.
The past year has been huge for blockchain and distributed ledger pilots: governments, large corporations including Walmart, and global banks including Goldman Sachs all implemented programs for the technology. Additionally, the year brought about the launch of hundreds of blockchain-based startups — many of which raised money through ICOs, a form of funding that allows “retail investors” to preorder tokens/coins that will in theory one day have value or use when the product/platform launches.
In this article, we analyze the results of the 2018 blockchain efforts and launches, and use these to forecast top applications and trends for 2019. The insights and data in this article are sourced from the NewtonX blockchain expert tracker.
Blockchain Out Of Beta: Are Companies Ready to Move Beyond Pilots?
In 2018, there were major blockchain/ distributed ledger pilots across industries including banking, supply chain, contract management, and healthcare. Some of these have remained in pilot stage — neither adopted nor rejected — while others have grown and provided tangible value to global enterprises:
The most popular use of blockchain technology in banking is in expediting the settlement of international transactions. IBM’s Blockchain World Wire payment network, for instance, helps financial organizations clear international payments in seconds — and recently came out of beta. The service uses a stablecoin or another digital currency as a bridge asset between international currencies. Similarly, JP Morgan recently filed a patent for a blockchain-powered network for bank-to-bank settlements. Santander, the Spanish bank, launched a consumer-facing app that uses blockchain to allow international money transfers in seconds. Alipay’s parent company, Ant Financial, launched a blockchain-based service to enable real-time money transfers between Hong Kong and the Philippines through the Alipay app.
Supply Chain Management and Logistics
Walmart started working with IBM in 2016 to implement blockchain for supply chain tracking, and has reported that the technology helped the reduce the time it takes to track mango shipments from 7 days to 2.2 seconds. In 2017, Nestle, Kroger, and a few other food corps joined Walmart in partnering with IBM to use blockchain for supply chain tracking to improve food safety.
Blockchain has also been used for global logistics. For instance, Hyundai Merchant Marine trialed a blockchain/IoT system developed by Samsung which tracked vessel arrival and departures, cargo movement, and bills of lading — all on a paperless distributed ledger.
Contract Management (Smart Contracts)
As we wrote last year, smart contracts on blockchain can self-execute agreements that go through multiple validation points and are stored on an easily trackable platform. They are built in if-then statements, which allows them to be automated through a verified process. Transactions in a smart contract setting automatically trigger when verified conditions are met, meaning that payout can happen rapidly and without centralized oversight.
This technology has applications across virtually any contract-dependent industry (think: insurance, banking, real estate, etc.). DocuSign, for instance, recently built a proof-of-concept application that used smart contracts to expedite and simplify purchasing a car or signing a car lease. At the end of 2017, AXA launched a flight insurance product that stores insurance terms as smart contracts on the blockchain. The service helps policyholders receive automatic compensation when certain conditions are met, such a flight being delayed for customers who have flight delay insurance.
Because healthcare is so data and paperwork dependent, blockchain technology has numerous applications. Health testing and diagnostics company Quest Diagnostics, for instance, started working with UnitedHealth, Multiplan, and Humana to see if a distributed ledger could simplify keeping provider demographic data such as diagnostics and insurance up to date in a centralized system. Likewise, the Illinois Department of Financial and Professional Regulation, which manages physician licensing, is considering a blockchain solution for digitizing medical credential data and automating workflow for interstate physician licensure through smart contracts.
Blockchain technology can also be used in the medical supply chain to verify drugs at each touchpoint in order to eliminate counterfeits. Pfizer, along with multiple other pharma giants, recently participated in just such a pilot of a MediLedger, that would use a closed blockchain system to track drugs.
Blockchain in 2019: User Surges and Blockchain as a Service (BaaS)
Google, Oracle, and AWS are all working on different versions of Blockchain-as-a-Service (BaaS). Google is developing both a distributed ledger for third parties to send and verify transactions, and a full-stack blockchain service for developers. AWS partnered with Kaleido, which offers plug-and-play blockchain services including identity registration and file storage on the cloud, to integrate blockchain services with AWS services. Oracle has a BaaS service that gives businesses access to a pre-assembled platform for building and running smart contracts and a distributed ledger.
2019 will be the year of BaaS and the year of growth for enterprise blockchain applications, particularly in the industries and applications mentioned above. Where 2018 was a year for pilots, 2019 is the year for large scale implementation.