When it comes to trends set to dominate the tech landscape in 2022, blockchains or distributed ledger technology (DLT) ranks high on the list. But many are still unaware of its breadth of potential. DLT is too often regarded solely as the technology underpinning blockchain, cryptocurrency, and NFTs. Still, there are many innovative ways in which DLT is transforming business – and they have nothing to do with crypto.
From supply chain management all the way through to government services, DLT is offering safer, more efficient, and cost-effective methods for businesses to run digitally. By providing a decentralized ledger upon which data can be entered, stored, and shared, DLT increases the transparency of these transactions. No single party has sole ownership or access to the data. Sharing it across multiple sites ensures any changes that are made are instantly identifiable, and data is effectively immutable (cannot be amended or deleted).
So what does this mean in practice? When built into digital infrastructure, DLT can be used to facilitate greater transparency, accountability, and security. Let’s take a look at five of the most exciting applications of DLT set to transform our business and personal lives.
Streamlining automation with smart contracts
Improving efficiency remains a key priority for businesses across the globe, with efforts to cut out the middleman and streamline costly and time-intensive processes becoming increasingly vital. The puzzle facing leaders is how to introduce automation in a safe, compliant, and effective way.
Secure automation can be provided using DLT in the form of smart contracts. Programmed onto a distributed ledger as “if/when…then…” statements, smart contracts automatically trigger an action while ensuring all necessary requirements have been met. For example, a payment can be made automatically upon receipt of delivery; or a new employee can be onboarded as soon as their credentials have been received, without the need for manual input or review.
Each smart contract comprises a set of specific criteria predetermined by an authorized member of the distributed ledger on which it is stored. These must be met before the action is triggered, ensuring that transactions are made safely and in accordance with all necessary regulations.
Making supply chains more sustainable
Throughout the past year, supply chain crises have repeatedly made headlines around the world. From petrol pumps running dry to retailers struggling to keep up with Christmas demands, the severity of consequences when our supply chains hit disruption have been laid bare.
What’s more, supply chains are under even greater scrutiny over their role in helping reach ESG targets in the wake of COP26. So businesses are now searching for solutions to strengthen the underlying infrastructure and mend the weak points enabling corruption and delay to derail supply.
Some are innovating by incorporating DLT to make supply chain records more transparent and hold key players to account. The timber industry, which sees around 30% of its timber taken illegally across the market, has introduced a timber chain. Certification and proof of transactions can be immutably logged on the distributed ledger, presenting a transparent record of the entire supply chain. As a result, bad players in the system are easily identifiable and can be held to account. This reduces levels of corruption which in turn saves money, limits delays, and makes the supply of timber more environmentally sustainable.
Leveling the playing field for intellectual property rights
Currently, the enforcement of intellectual property (IP) rights is an extremely time-intensive and expensive process. Still largely paper-based, the actions required to log, prove and dispute ownership of assets require extensive resources. This leaves smaller businesses at a major disadvantage, as many simply cannot afford to protect their IP rights.
DLT provides the foundation for digital IP management, through which assets can be claimed and data relating to IP rights stored and shared safely and securely. Assets can be digitally tokenized or issued a cryptographic hash, which unalterably identifies them as belonging to a specific organization or individual. By storing this information on a distributed ledger, it can be transparently shared and protected against fraudulent claims.
Making self-sovereign identity standard
With more of our lives now online than ever before, there is naturally increased concern surrounding exactly who can see and use our personal data. Recent high-profile cases have examined the potential consequences of misused data – whether it’s influencing elections or tailoring the ads you see. So innovators are now looking for ways to hand back greater control over data to individuals.
Self-sovereign identity (SSI) is one evolving application. Using decentralized identifiers (DIDs) as well as verifiable claims (VCs), data can be shared in a more controlled manner, giving third parties access only to what is necessary. For example, proof of age can be given without the need to disclose your exact date of birth. A VC provides confirmation that you meet the age requirement (e.g., you are over 18) without sharing the raw data itself. Other potential uses for SSI include decentralized certification for employee onboarding or visa applications and the provision of digital identity wallets.
Providing safer digital health records
The days of paper-based health records may be largely behind us, but there remains much room for improvement in the way records are stored and shared digitally. DLT presents the mechanism for providing a comprehensive record of all our health data, which can be accessed by appropriate doctors and clinicians while remaining in our individual control.
By storing health data on a permission-based distributed ledger, service users can retain control over how and when their data is shared. Looking forward, innovators hope to be able to add homomorphic encryption to these DLT-based records. This would enable data to be processed and used by third parties for research or administration purposes without decryption. Personal data will be kept completely private and ultimately controlled by the individual.
Ultimately, the potential of DLT is enormous and far outstretches cryptocurrencies. From health records to digital passports, supply chain management to IP rights, the world of utilizing enterprise blockchain is just beginning. Still, it’s here to stay, and we’re only scratching the surface of what it can do.
YouTube: Chain Reaction – Distributed Ledger Technologies (DLT) explained (Bosch)
Photo credit: The feature image has been done by A Lot Of People.This guest article has been submitted by Ryan Worsley. We appreciate all guest contributions but the opinions expressed by the author do not necessarily reflect the views of TechAcute.