Opportunities for Blockchain Use in Various Sectors, Such as Finance, Logistics, and Energy

Uzone.id – Blockchain is touted as a new future in the way humans transact. This technology allows almost any valuable asset to be tracked and traded on the blockchain network.

In simple terms, blockchain is a shared and immutable ledger that facilitates recording transactions and tracking assets within a business network.

Databases in blockchain store data in blocks linked together in a chain. The data is chronologically consistent because users cannot delete or change the chain without consensus from the network. 

Due to its distributed nature, data in blockchain is challenging to change and manipulate. Each transaction can be tracked and verified by all participating parties. 

Blockchain is also the underlying technology of cryptocurrencies such as bitcoin. Its decentralized and immutable nature offers a secure and transparent way to record transactions, making it a valuable tool in sector sharing.

This technology is slowly starting to be adopted innovatively by various industries; here are three of them:

Finance

Blockchain has the potential to change the landscape of the financial sector fundamentally. With a high security, efficiency, and transparency system, blockchain opens new opportunities and increases financial inclusion.

Traditional financial systems such as banks and stock exchanges are starting to use blockchain to manage payments, accounts, and online market trading. 

For example, Ripple’s bank network uses blockchain to facilitate cross-border fund transfers faster and at lower costs. 

On the other hand, an investment holding company, Singapore Exchange Limited, is also using blockchain technology to build more efficient interbank payment accounts.

Despite offering various advantages, implementing blockchain in the financial system still faces several challenges, such as a regulatory framework that still needs to be developed.

Blockchains also need to increase their scalability to accommodate larger transaction volumes, and interoperability issues or the ability of different blockchains to communicate and exchange data will be both a challenge and an opportunity in the blockchain world.

Logistics

Blockchain technology offers transaction recording and asset tracking processes within a business network that cannot be changed and manipulated. These advantages can have great potential to revolutionize how the logistics sector works. 

Imagine if every step in the supply chain could be tracked in real-time, data stored securely because it is difficult to forge, and process automation and the reduction of physical documents on the blockchain could speed up delivery times and reduce operational costs.

If implemented, this technology has the potential to change the way humans manage supply chains fundamentally. 

One of them is what Amazon has done. The retail company has filed a patent for a distributed ledger technology system that will use blockchain technology to verify that all goods sold on the platform are genuine. 

However, implementing blockchain technology in logistics still faces several challenges, such as enormous implementation costs, the absence of a universal standard for blockchain users in logistics, and interoperability or the need for different blockchains to communicate to create a broader ecosystem.

Energy

In the energy sector, energy companies are using blockchain technology to create peer-to-peer energy trading platforms and simplify access to renewable energy.

For example, the owner of a Solar panel can sell excess energy to the public grid. Owners can become prosumers, namely producers as well as energy consumers. Then, buying and selling transactions can be carried out automatically through smart contracts embedded in the blockchain. 

However, despite offering a lot of promising potential, blockchain application in the energy sector still faces many significant challenges, including the following.

1. In terms of scalability, energy networks involve millions of small transactions in a short period, for which the blockchain needs to be scaled up to accommodate larger transaction volumes. 
2. Blockchain also consumes enormous energy during transaction validation on some blockchains (such as Proof of Work). This is contrary to the primary purpose of using renewable energy.
3. Last but not least, there is still a lack of a clear and comprehensive legal framework regarding the use of blockchain in the energy sector, and there is no universal standard for interoperability between various blockchain platforms.