5 emerging trends expanding the scope of blockchain technology

Bitcoin, Ripple, Ethereum, Litecoin and many other popular cryptocurrencies have become a generic face for blockchain technology among most of the people worldwide. Created to serve the very first cryptocurrency all those years ago, this concept of a decentralized ledger has since emerged as one of the fastest growing fields in computing. From fintech companies to cybersecurity experts and from retailers to logistics applications, blockchain has piqued the interest of nearly every major industry vertical globally and moved beyond its initial purpose.

With unprecedented level of corporate initiatives and private equity funding observed over the last few years, remarkable developments have been made in implementing blockchain platforms across innovative applications. As businesses all over the world, big or small, seek more effective, secure methods to perform different kinds of transaction, blockchain startups as well as progressive efforts undertaken by industry giants will command tremendous resources in the next few years.

Key blockchain applications outlining future trends in investment:

1. Blockchain-as-a-Service (BaaS)

Based on a concept similar to Software as a Service, BaaS allows enterprises to develop, host and deploy their own apps, functionalities and smart contracts on the blockchain via cloud-based solutions. Here, all the operations necessary to maintain and update the infrastructure are performed by the cloud service provider. The system has considerable potential due to the complexities involved in building a blockchain ecosystem and keeping it secure.

Microsoft, Oracle and Amazon Web Services are three of the prominent BaaS providers, offering services to numerous business domains where enthusiasm for blockchain technology is on the rise but there is a lack of critical technology skills.

BaaS startups could emerge in the future to cater to smaller businesses who want to integrate blockchain with their processes. Nodalblock, a blockchain as a service startup from Madrid, had received a seed investment last year from Canada-based Numus Financial to establish operations in the country.

2. Security of Cryptocurrencies

Managing encryption keys is of utmost importance for the privacy protection and overall security of organizations, and blockchains are essentially standing on the foundation of public-key cryptography. Besides, a private key enables crypto users to spend a particular amount of the currency on a network and it has to be protected against being misused by any other user.

While many users let crypto-exchanges handle key management, these exchanges are facing considerable threats from hackers. Reportedly, up to $2.7 million in crypto assets from exchanges were being stolen each day in 2018, which was a significant rise from the previous year, escalating the need for investing in advanced security measures.

Recently, private-key management startup Torus had raised around $2 million in funding from various investors, including the Coinbase Ventures, the arm of the major crypto exchange. Undoubtedly, blockchain security initiatives could drive notable investments in the year to come with rapid penetration of crypto wallets amongst worldwide users.

3. Supply Chain Management

Blockchain technology is anticipated to substantially enhance supply chain efficiency and accountability, from warehousing, logistics and payment delivery. Food manufacturing sector has seen numerous companies opting for blockchain pilots to strengthen their business processes and leverage the distributed ledger concept, including brands like Nestle and Walmart.

U.S. seafood processor Bumble Bee Foods had begun trials in late 2018 for using blockchain to track the movement of products all through its supply chain. The company successfully implemented the technology early this year across its business and received positive responses from retailers. In terms of consumers, a QR code on the pack provided accurate details regarding source of the fish and how it was captured, ensuring better customer experience and satisfaction.

With similar platforms being implemented across a variety of food supply chains, the world can expect more food producers and retailers to invest heavily into suitable blockchain solutions.

4. Insurance Frauds

Insurance claims have always been an area of concern for auto and property insurers as well as healthcare payers, with frauds leading to nearly $80 billion in losses annually for all types of insurance products. Not surprisingly, insurance companies and financial institutions has constantly turned towards the latest technology offerings to ensure their lending and claims processes are quick and scam-proof.

BlockClaim, an insurance tech startup, secured investments in June this year to reinforce its blockchain-powered claims solution, which the company says lowers the cost of claims by 20%, besides speeding up the process. It deploys artificial intelligence for fraud detection in vehicle collision claims through a kind of image recognition module.

Considerable untapped potential of blockchain technology in the insurance sector will certainly direct investment efforts of upcoming startups and traditional insurers alike to deliver improved customer experience and avoid losses from fraudulent cases.

5. Financing & Lending

Mortgage and automobile financing services bring with them high risks in terms of fraud and possibility of inaccurate customer credibility. In fact, mortgage fraud had surged by 12% year over year by the end of second quarter of 2018. Auto loans are similarly plagued by fraudulent activities all over the globe and have urged financers to invest in secure customer screening solutions and payout methods.

Spring Labs, a blockchain company had received $23 million in funding from venture firms, crypto investment bank Galaxy Digital as well as automaker General Motors. The startup aims to develop new fraud-detection systems for countering fraud applications in the automobile financing industry. It will help provide reliable information anonymously for business lending, issuing credit cards and unsecured loans as well.

Evidently, the blockchain technology space holds vast potential for growth, whether it comes from within big corporations or from investments grabbed by promising startup enterprises that look to solve key industry problems. The view and approach of software providers, insurers, financial companies and manufactures around the globe towards blockchain adoption will influence investment strategies of venture capitalists and greatly underscore how the sector evolves.