th images menu user export search eye clock list list2 arrow-left untitled twitter facebook googleplus instagram cross photos entrep-logo-svg

Beyond Bitcoin: How Businesses Are Using Blockchains to Build New Products and Services

Did you know that MIT gives out its graduate certificates in blockchains via an app?
By Patrick Palacios |

 

Fortune magazine recently came out with an article saying that Mastercard has started using blockchain, albeit in a limited manner, to pay for goods and services. According to the report, Mastercard is the second company in the Fortune 500 list that uses blockchain technology (the first being IBM).

 

It’s worth noting that Mastercard won’t be using blockchain in the traditional sense where they act as a ledger of transactions in the specific cryptocurrency to which they were tied—Bitcoin for example. It will instead accept traditional local money but will use blockchain to transfer these to partner banks and merchants around the world.

 

If you’re getting confused with the jibber-jabber in the above paragraphs, you don’t have to worry, because few people actually know what blockchain is and what it does. In fact, it’s still so confusing that, as Fortune stated, even Mastercard is doing away with the basic method of using blockchain, which shows that they are stepping prudently into new and uncharted territory.  

 

Digital currencies can be quite difficult to understand, let alone explain without going into technical details. Maybe you have heard of Bitcoin, that you can use it to buy goods and pay for services without the use of money, that it is not regulated by any financial institution, and that its value changes more often than you change your shirt. When Bitcoin started in 2009, it was valued at less than $1, but eight years later, it’s now worth about $10,000. That being said, few companies would transact using Bitcoins (although adoption has been increasing) and one would wonder why Bitcoins are so expensive.

 

And that’s just for Bitcoin. Other digital currencies out there include Ether, Blackcoin, Dash, and XEM, to name a few.

 

 

Blockchains: Distributed digital ledger

But let’s not lose our heads over Bitcoin and take Mastercard’s example. Let’s just focus on the underlying technology that made Bitcoin and other digital currencies happen—blockchains. The basic definition is that blockchain is a digital ledger of all historical transactions of a block of information (in the case of Bitcoin, all the payments and transfers of a single Bitcoin since the time it was created up to the present). Every time that this single block is transferred or received by any computer or device in any network, a new block is created and is added to the rest of the records—thus “chaining the blocks.”

ADVERTISEMENT - CONTINUE READING BELOW

 

This seems pretty easy to understand since it’s just like adding a transaction record to a physical bookkeeping ledger. But there is an additional layer that makes blockchains far better; instead of creating just one blockchain that contains all the records, the transaction records are also distributed across EVERY blockchain in an entire network.

 

This principle of distributed database of all records makes blockchain far more secure than just a set of separate digital ledgers. Blockchain cannot be tampered with unless the other blockchains in the entire network are also changed. That’s besides the fact that information in blockchain are also encrypted, making them even more difficult to manipulate.

 

 

Industry use of blockchains

For the most part of its history, the blockchain technology has been in use in digital currencies, a novelty that very few understood or wanted to know about. The idea was conceptualized by the “father” of Bitcoin, a person known as Satoshi Nakamoto, whose real identity remains a mystery. And even he may not have thought of blockchain technology’s use beyond Bitcoin, as stated in his seminal paper.

 

But some industries are seeing viable applications for blockchain. The Massachusetts Institute of Technology (MIT) started giving out graduate certificates in blockchains via an app, which they called Blockcerts Wallet. There is also a company in the US that is testing blockchain technology for “smart” energy grid distribution. Air France applied blockchain to its supply chain management for aircraft maintenance. Even the US Centers for Disease Control (CDC) is looking at the technology to help public health workers respond faster and more efficiently to crises.  

 

More recently, the Russian division of burger chain Burger King came out with WhopperCoin, which is part of a loyalty program using blockchain. In it, buyers get a virtual currency every time they purchase from the burger chain, then exchange the WhopperCoin with partner merchants. This goes to show that blockchain isn’t just for backend corporate use, but they're also as good as frontline services for consumers and can link up with other merchants for better service. 

 

The technology that was primarily built to record transactions of Bitcoin is seeing some viable use in various other industries because of its efficiency in collecting and keeping data records. These applications are enabling a new process of managing records and are also introducing new ways of thinking relative to production, finance management and customer relations.

ADVERTISEMENT - CONTINUE READING BELOW

 

Having new ways of thinking only improves the quality of services and creating efficiency within an organization, a win-win situation for both the company and its clients. Indeed, it’s exciting to see where blockchain technology will go next.

 

 

***** 

 

 

Patrick Palacios is the founder and president of Appsolutely, a tech startup that provides a variety of digital solutions to other businesses, most notably facilitating their loyalty programs. Its latest product is LoyalCoin, a digital token that aims to innovate rewards points by taking it to the blockchain.

Latest Articles

How Much Cut in Personal Income Taxes Can You Expect Under the Newly Ratified Tax Reform Bill?

President Rodrigo Duterte just needs to sign the bill and it will take effect 15 days later

byEntrepreneur Staff | December 14, 2017 16:00:00

Productivity Hack: Free Up Space on Your Mobile with Files Go

An app that frees up space, finds files faster, and easily shares them

byNicai de Guzman | December 14, 2017 10:00:00

Which PH Cities and Towns Have the Most and Least Bank Deposits?

If you have Php10 million in the bank, you have more deposits than at least 10 entire towns

byPauline Macaraeg | December 14, 2017 09:00:00

The Holy Trinity of Business Growth: People, Process and Metrics

How do you keep your company profitable as it scales above 50 employees?

byDoug and Polly White | December 14, 2017 08:00:00

3 Relationships That Will Build the Tribe Every Entrepreneur Deserves

Life is a team sport, and we cannot succeed alone

byKim Perell | December 14, 2017 06:00:00

Science Says You Can Do This Simple Action to Boost Your Memory

You have to listen to your own voice

byNina Zipkin | December 14, 2017 02:00:00

This 6-Year-Old Kid Reportedly Earned US$11 Million on YouTube

His most popular videos are the ones with an "egg surprise." Watch them here!

byKitty Elicay for SmartParenting.com.ph | December 14, 2017 00:00:00

Users of Online Marketplace Carousell Earn Php20K a Month Selling Mostly Secondhand Stuff

Launched in the Philippines in October 2016, the SG startup has helped sell over one million items

byElyssa Christine Lopez | December 13, 2017 12:00:00

Meet the Fruitcake Queen Who Has Been Making The Christmas Staple for Over 40 Years

Despite rising demand, Ju.D Lao refuses to open a shop and just wants to keep it a home-based...

byPaul John Caña | December 13, 2017 09:00:00

Hard Work? It's Not All It's Cracked up to Be. It May Even Be Irrelevant. Here's Why

Netflix let go of many of its hardest-working employees in favor of those who most greatly impacted...

byJayson Demers | December 13, 2017 08:00:00

Here's Why Introverted Employees Are More Likely to Leave Companies

A Myers-Briggs Type Indicator test could determine the mix of introverts and extroverts at your...

byHeather R. Huhman | December 13, 2017 06:00:00

Steve Jobs Shares the Secrets to Successful Team Leadership in This Throwback Video

The Apple co-founder reveals what he really thinks about professional managers

byNina Zipkin | December 13, 2017 02:00:00