Blockchain for Business: Top Use Cases, Benefits & Pitfalls in 2024

Blockchain for Business: Top Use Cases, Benefits & Pitfalls in 2024

blockchain is a shared and immutable data storage technology that is used for payments, supply chain management, trade operations, tokenization, and privacy solutions.

The technology is finding its way into the corporate world because of its unique properties that allow the creation of programmable, transparent, accessible, secure, and trustless systems.

Anndy Lian, an intergovernmental blockchain experttold Techopedia:

“It is not just financial systems; blockchain can empower individuals to take control of their personal data and privacy, mitigating risks associated with centralized data storage. We’re at the early stages of understanding how blockchain and crypto can revolutionize various industries. From supply chain management to healthcare, the potential applications are vast.”

What are the benefits of blockchain applications? What are the challenges that companies may face when adopting blockchain tech? We explore these and highlight some of the most popular use cases of blockchain for businesses in various sectors.

Key Takeaways

  • Blockchain tech has unique properties that allow the creation of programmable, transparent, accessible, secure, and trustless systems.
  • Blockchains are used for payroll, supply chain management, trade operations, tokenization, privacy, and retail operations.
  • Businesses can use public blockchains like Ethereum or create their custom private blockchains.
  • Businesses can use blockchain to build trust, improve privacy, reduce costs, facilitate cross-border payments, and more.
  • Uncertainty around crypto regulation is a key hindrance in adopting blockchain technology.

What Are the Major Blockchain Applications Across Industries?

Here are some of the most popular blockchain use cases and examples of using blockchain for small businesses and large corporations.

Six Popular Blockchain Use Cases

Payroll

Payments are an obvious use case of blockchain technology. The cryptocurrency industry has used blockchain technology as a bedrock to build peer-to-peer payment systems, while governments are leveraging blockchain technology to create central bank digital currencies (CBDCs).

The growth of remote work has also helped this trend grow as crypto payments facilitate easy, quick, and cheap cross-border payments.

For example, the human resources (HR) management platform Deel allows companies to pay and contractors to receive their salaries in BTCETHUSDC, Dash (DASH), Solana (SOL), and BUSD.

Supply Chain Management

Blockchain supply chain management solutions modernize complex chains that have numerous intermediary parties, processes and endpoints.

The transparent and immutable nature of a blockchain ledger ensures that all concerned parties have a single trusted source of information while providing information in real time to all concerned parties.

Blockchain supply chain solutions also reduce paper-based processes and email exchanges and allow automation, thereby increasing transaction speeds.

Trade management company Covantis created a network to process the execution of bulk agricultural trade operations from the appointment of third-party providers to sharing of documentary instructions and generating drafts and final documents.

Trade & Commerce

Blockchain solutions for trade and commerce created a reliable platform to help buyers find sellers, negotiate with each other, and complete the trade without having to meet each other.

These trading platforms store agreed-upon contracts on the blockchain, while smart contracts custody funds and automate payments when real-world conditions are met. All the information remains visible to all parties on the blockchain.

IBM created a blockchain-based trade management platform we.trade that solves the issue of lack of trust. Importers and exporters that don’t know each other can securely connect with each other on we.trade.

Real World Asset (RWA) Tokenization

Tokenization of real world assets is a promising blockchain use case for businesses that want to increase market liquidity for illiquid assets like real estate. Tokenization can also be used to safeguard intellectual property like copyrights and patents by storing them on an immutable blockchain network.

RWA tokenization is among the top five crypto market trends and technologies in 2024. Traditional finance companies are tokenizing illiquid real estate and fine art into thousands of digital tokens, bringing down the entry barrier for small investors. At the same time, the global nature of public blockchains like Ethereum (ETH) has allowed RWA tokens to reach investors from across the world.

Lian said:

“I believe that tokenization has the potential to democratize access to investment opportunities, allowing individuals from diverse backgrounds to participate in previously inaccessible markets.”

The world saw the first tokenization of real estate in June 2019 when a luxury property called ​​AnnA Villa in France was divided into thousands of digital tokens on the Ethereum blockchain with a minimum entry ticket of investment of €6.5. The tokens came with ownership rights, voting rights, and a one-year vesting period for initial token holders.

Decentralized Identity

Data privacy and security are key issues that businesses have to deal with every day. Using blockchain technology, corporations can leverage a privacy-preserving identity management system called decentralized identity.

Decentralized identities are stored on the blockchain and are not controlled, managed, and stored by centralized third parties. The use of zero-knowledge proof technology, which is gaining popularity on public blockchains, allows organizations to create identifications and certificates that can be verified without revealing any information. Decentralized identification prevents certificate fraud, fake credentials, slow verification processes, and data leaks.

Health-focused enterprise enablement company BurstIQ provides a blockchain-powered platform called LifeGraph that manages sensitive health data. Healthcare and life sciences companies can secure customer data to a single source where participants can control others’ access to their data. Permissioned data can be analyzed, without violating data privacy norms, for improved efficiency, better decision-making, and increased effectiveness in medical processes.

Non-Fungible Tokens (NFT)

Although crypto NFTs are typically associated with absurd market prices, their broad use cases are often misunderstood. Consumer brands like Nike, Puma, and Louis Vuitton have used NFTs as a marketing tool and as a way to digitize and enhance shopping experience.

Since acquiring digital art studio RTFKT in 2021, Nike has occasionally released exclusive NFTs that can be redeemed for physicals. Similarly, in 2023, French luxury fashion house Louis Vuitton sold “phygital” NFTs called Treasure Trunks – worth €39,000 a piece, as reported by Vogue – that granted owners access to goods and experiences.

In September 2022, Starbucks piloted a customer rewards program powered by NFTs called Starbucks Odyssey. However, the company later shut the program in March 2024.

Benefits & Pitfalls of Blockchain for Business

Benefits

  • Trust
  • Improved Privacy & Security
  • Reduced Costs
  • Faster Settlements
  • Programmability & Customizability
  • Tokenization

Challenges

  • Technical Expertise & Investment
  • Regulation Uncertainty
  • Risk of Hacks
  • Limited User Adoption
  • Energy Consumption
  • Scalability & Interoperability

Benefits of Blockchain for Business

Here are the key benefits of using blockchain tech for business operations:

1. Building Trust

Blockchains when paired with smart contract technology can create trustless systems that are immutable, transparent and objective in nature. In a world where there is growing distrust over corporate practices, the use of blockchain technology can help generate trust.

2. Improved Privacy & Security

Although blockchains are not immune to hacks, the development of cryptographic technologies such as zk-proof can ensure data privacy and safety. ZK-proof technology is especially useful in protecting private data as it allows data verification without revealing any information.

Businesses can also leverage public blockchains such as Ethereum to store data and transact upon. The decentralized nature of public blockchains ensures that no centralized party has the power to modify or delete stored data.

3. Reduced Costs


Blockchain technology can help organizations reduce costs by making supply chain and trade management systems efficient, transparent, and accountable. This is especially useful for corporations that have to conduct business operations on the assumption of trust.

4. Faster Settlements

The use of blockchain technology shines when it comes to payments. Cryptocurrency blockchains are global in nature and operate 24/7 making them perfect channels for cheap and immediate cross-border payments.

Unlike the traditional banking sector, businesses will not have to wait for banking hours for settlement and will not incur multiple fees applicable in international money routing.

5. Programmability & Customizability

Businesses have the choice to use different types of blockchains depending on their needs. For example, public crypto blockchains are suitable for handling payrolls, while private blockchains can be developed to allow access to only concerned parties within a supply chain or trade operation.

Furthermore, the use of programmable smart contracts allows the development of applications that use the underlying blockchain networks for data storage and transaction settlement. Smart contracts also allow automation where transactions self-execute when specific conditions are met.

6. Tokenization

Tokenization fits financial use cases. The borderless nature of public blockchains like Ethereum and Solana allows tokenized financial assets to attract a wider pool of investors from across the globe.

Potential Challenges & Pitfalls

Here are the biggest barriers to blockchain adoption in business:

1. Requirement of Technical Expertise & Investment

Businesses will incur costs when recruiting blockchain experts and implementing blockchain technology. The use of public blockchains will require businesses to pay gas fees and auditing fees when setting up applications and smart contracts. Meanwhile, the development of private blockchains from scratch may be expensive and time-consuming due to its complexity.

2. Regulation

The uncertainty around cryptocurrency regulations is one of the biggest challenges in implementing blockchain technology for businesses. Cryptocurrency and blockchain applications often face difficulty finding banking partners in regions with unfriendly and unclear crypto regulations.

The uncertain crypto rules and regulations can hamper business progress and discourage customers from using blockchain-based applications.

3. Hacks

Blockchains are not immune to hacks. 51% attacksdouble-spending, and sybil attacks are key risks to public blockchains. Furthermore, businesses must conduct thorough audits of their smart contracts before deployment or risk being compromised.

4. Limited User Adoption

Blockchain technology is relatively nascent, and therefore, businesses may encounter resistance from trade partners, supply chain management parties and consumers when they introduce blockchain-based solutions. Low awareness about blockchain and cryptocurrency technology among concerned parties is a major hurdle in this area.

5. High Energy Consumption of Proof-of-Work Blockchains

Proof-of-work (PoW) blockchains like Bitcoin are criticized for their high energy consumption rates and carbon footprint. Businesses looking to use these blockchains may attract criticism from customers and investors.

6. Scalability

Public blockchains like Bitcoin and Ethereum often face scalability issues that have resulted in limited network throughput. High transaction volumes on these networks can result in transaction execution failure, exorbitant transaction fees, and delayed transaction processing.

7. Interoperability

Blockchains are often referred to as “data silos” as they tend to exist in isolation from other blockchain networks.

The lack of interoperability between blockchains leads to inefficiencies as businesses will have to rely on third-party solutions to retrieve data from a foreign blockchain.

Fragmentation of data can also hinder collaboration and stifle innovation between businesses or departments within a corporation.

The Bottom Line

Blockchain is a revolutionary technology that offers unique value propositions like trustlessness, transparency, immutability and decentralization.

When duly implemented, blockchain can help corporations make their business operations more efficient and bring about a social and cultural change where trustless and transparent systems become the norm.

 

Source: https://www.techopedia.com/blockchain-for-business-your-enterprise-guide

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Top 5 Billionaires Who Lost the Most Money in Crypto

Top 5 Billionaires Who Lost the Most Money in Crypto

From the collapse of Sam Bankman-Fried (SBF) and Gary Wang’s FTX to the fall of Binance’s Changpeng Zhao (CZ), the cryptocurrency industry has witnessed some of the biggest pitfalls in the last couple of years, with a number of notable individuals losing millions if not billions of dollars-worth in crypto.

Who lost the most money in crypto in past years, and why are even seasoned investors and billionaires prone to lose money in the industry?

We talked to experts about the major reasons for such dire losses and identified the key best practices crypto investors could use to protect their money.

Key Takeaways

  • Crypto investments are prone to fall victim to high volatility and risks, as evidenced by massive losses experienced by key figures in the industry.
  • Understanding the underlying technology and market dynamics is crucial for navigating the complexities of the crypto space.
  • Seasoned investors can also face significant losses, highlighting the unpredictability of crypto markets.
  • Implementing strong security practices and risk management strategies is essential for protecting investments.

Who Lost the Most Money in Crypto?

The cryptocurrency market continues to be highly volatile, which is why investors must be able to grasp the fundamentals before judging the risks or getting caught up in the hype and fear of missing out (FOMO) of many decentralized finance (DeFi) projects, Dr. Fardad Zand, the co-founder and CEO of Wisdomise, told Techopedia.

“Poor security practices can also lead to losses from scams and hacks. In addition, overleveraging amplifies potential gains and losses for traders — many get liquidated when the volatile market turns against them.”

The lack of a solid risk management strategy that would dictate to investors when the right time to exit a trade is regardless of its outcome is also another reason why individuals could be prone to lose large sums of money while trading cryptocurrencies, Jonathan Solomon, the co-founder and co-CEO of ARIA, added.

So, who were the people who lost the most money in crypto in recent years?

Top 5 Crypto Billionaires Who Lost the Most Money in Crypto
Source: Statista

Changpeng Zhao (CZ): $82 Billion

One of the most prominent names in the cryptocurrency industry, the former CEO of Binance Changpeng Zhao, allegedly lost around $82 billion during the crypto winter of 2022, data on Statista showed.

However, since then, the crypto billionaire’s net worth continued to decline, as he pleaded guilty to violating anti-money laundering requirements enforced by the U.S. Department of Justice in late November 2023 and paid a $4 billion settlement.

Despite the losses, it is estimated that CZ has a net worth of $33 billion as of April 2024.

Sam Bankman-Fried (SBF): $23 Billion

Another prominent name in the cryptocurrency industry, Sam Bankman-Fried, was the former co-founder of the doomed crypto exchange FTX, who lost about $23 billion, according to Statista, as the value of FTX and related assets collapsed.

ARIA’s Solomon noted that in SBF’s case, his losses could have been attributed to high-risk strategies that led to significant financial losses.

However, SBF had also faced allegations of fraud for his role in the collapse of FTX, including defrauding the exchange’s customers. His actions led to a significant loss of customer funds and investments, resulting in his arrest and a trial where he was found guilty.

On April 1, 2024, SBF revealed that he was planning to appeal his 25-year sentence in an exclusive interview with ABC News.

Brian Armstrong: $4.7 Billion

Brian Armstrong, the co-founder and CEO of Coinbase, is another big name in the cryptocurrency space who lost a significant amount of money when the market plummeted in 2022.

Armstrong’s wealth was closely tied to Coinbase’s performance and the overall health of the crypto market. Therefore, when the crypto winter occurred in 2022, and the industry faced substantial losses, so did Armstrong’s net worth.

Still, even with the loss of $4.7 billion, estimated by Statista, Brian Armstrong’s net worth is $10.9 billion as of April 2024.

Anndy Lian, an inter-governmental blockchain adviser, further explained how the 2022 crypto winter could have affected investors:

“Many investors are drawn to the allure of quick profits without fully understanding the assets they’re investing in. This, coupled with the market’s notorious volatility, can lead to substantial financial losses.

 

Prices in the crypto market can swing dramatically, and without a solid grasp of market trends and the factors driving them, investors can find themselves buying high and selling low.”

Gary Wang: $1.7 Billion

Gary Wang, the former co-founder and CTO of FTX, also faced a substantial loss of about $1.7 billion following the collapse of the FTX cryptocurrency exchange, according to Statista.

Most of his fortune was tied up in a 16% stake in FTX and a share of its FTT tokens. As of April 2024, Garry Wang dropped off all the Forbes ratings.

Chris Larsen: $1.3 Billion

Chris Larsen is known as a pioneering force in cryptocurrency, having co-founded Ripple, a digital payment protocol and currency exchange.

In 2022, he also faced a significant loss of $1.3 billion due to the downturn in the cryptocurrency market, according to Statista.

As of April 2024, Larsen’s net worth is $3.2 billion.

Other Prominent Losses: TerraUSD/LUNA Crash

Meanwhile, the collapse of the TerraUSD (UST) stablecoin and its sister cryptocurrency, LUNA, is not directly linked to one person losing all their assets. Industry experts allege this collapse was one of the most “catastrophic” losses in the crypto market.

The pitfall of TerraUSD and Luna in May 2022 wiped out almost $45 billion in crypto market capitalization in just one week.

Do Kwon, the co-founder of Terraform Labs, is often blamed for this collapse; however, his losses are not mentioned in public sources.

Why Even Seasoned Investors Lose Money on Crypto?

Many might think that seasoned investors are rarely ever prone to face substantial losses in the crypto space, but that is rarely true.

Wisdomise’s Dr. Zand explained:

“Sometimes, overconfidence leads them to misjudge the actual risks involved. The technological complexities of blockchain and smart contracts are easy to overlook or misunderstand.

The crypto market is susceptible to manipulation by wealthy “whale” players, which can catch experienced investors off guard with volatile price swings. Some black swan events like major exchange hacks or new regulations can also unpredictably impact the entire market.”

Lian added that the complexity of the market, which is often characterized by its rapid evolution and the development of new technologies, could also pose significant challenges that even seasoned investors cannot evade.

Additionally, the crypto space is prone to high-profile scams and security breaches, which can also lead to financial losses.

Lian added:

“Market manipulation is another hazard that can lead to losses. Influential players can distort market prices, affecting the entire market and catching even the most vigilant investors off guard.”

Best Practices to Protect Your Money: Risk Management & Research

Lian highlighted that some of the critical takeaways from situations like these are the importance of risk management and research. He said:

  • Understanding the assets, the technology behind them, and the market dynamics is crucial for making informed decisions.
  • Emotional discipline is also essential; investors must learn to control their emotions and avoid making impulsive decisions based on fear or greed.
  • Moreover, the significance of security practices cannot be overstated.
  • Investors should prioritize the security of their investments by using reputable platforms, enabling two-factor authentication, and being wary of too-good-to-be-true schemes that could be fraudulent.

Additionally, developing a long-term investment strategy could also act as a safety net for many investors.

ARIA’s Solomon said:

“The historical performance of Bitcoin illustrates that holding investments over the long term has been profitable for those who have stayed the course, unlike many traders who have faced challenges in recent years. This emphasizes the importance of patience and the potential benefits of a long-term investment horizon in the crypto market.”

The Bottom Line

The dramatic losses in the crypto world underline the high volatility and risk inherent in cryptocurrency investments, as well as the market’s complexity and rapid evolution.

From the collapse of FTX, affecting Sam Bankman-Fried and Gary Wang, to the regulatory challenges faced by Changpeng Zhao and the market downturns impacting Brian Armstrong and Chris Larsen, these events highlight the precarious nature of wealth in the crypto industry.

They serve as a reminder of the importance of having robust risk management, a deep understanding of blockchain technology, and the importance of navigating the market with caution.

 

Source: https://www.techopedia.com/crypto-biggest-losers-who-lost-the-most-money-in-crypto

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Nigerian Court Rules Binance Must Provide Resident Traders’ Data to EFCC

Nigerian Court Rules Binance Must Provide Resident Traders’ Data to EFCC

A Nigerian federal high court has ordered Binance Holdings Limited to provide the Economic and Financial Crime Commission (EFCC) with comprehensive data and trade history of all Nigerians trading on its platform.

Justice Emeka Nwite gave the interim ruling on February 29, 2024, following an ex-parte motion raised by Ekele Iheanancho, the EFCC’s legal attorney.

Data to Unravel Money Laundering by Nigerians on Binance

According to local news outlet Punch, the court interim order was granted to allow the EFCC to investigate alleged money laundering violations and terrorism financing activities processed by Nigerians on Binance.

 

This means the anti-financial crime agency has the legal backing to request and access Nigerian traders on the exchange and conduct investigations.

Nonetheless, it is worth noting that Justice Nwite’s ruling stemmed from an ex-parte motion filed by the EFCC, which was based on specific sections of the Nigerian constitution.

This includes Sections 6(b), (h), (I), 7(1), (a)(2), and 38 of the EFCC Act, 2004. Other are Section 15 of the Money Laundering (Prevention and Prohibition) Act, 2022 (as amended) and the inherent powers of the court.

The highlighted legal provisions mandated the report of suspicious transactions to the Nigerian authorities and penalties for non-compliance.

The ex-parte motion filed by the EFCC claimed that Binance trading activities in the Nigeria region feature obvious elements of criminality.

An Affidavit was also filed by Hamma Bello, an operative of the anti-graft agency and member of its Special Investigation Team (SIT) within the Office of the National Security Adviser (ONSA). This was in support of the motion brought forward by the EFCC.

According to local news media, the filed document stated that the EFCC received intelligence on money laundering and terror financing on Binance. This led to the commencement of a thorough investigation by the EFCC.

Nigeria Trading Volume On Binance Capped at $21.6 Billion for 2023: The Looming Danger

Bello further stated that Binance’s request and compliance to release detailed data on Nigerian traders on Binance is of the utmost public interest and national security.

According to him, “The team uncovered users who have been using the platform for price discovery, confirmation, and market manipulation, which has caused tremendous distortions in the market, resulting in the Naira losing its value against other currencies.”

 

Bello reiterated that the damage caused by the Binance was clearly explained to the representatives of the exchange.

It could be recalled that the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, accused Binance of facilitating $26 billion of illicit funds in Nigeria in 2023.

Meanwhile, the crypto exchange has proceeded to release trading volume data by Nigerians for 2023, which is capped at $21.6 billion.

 

This was closely followed by a request to delist the Naira on March 5 to mitigate depreciation.

As the case unfolds, crypto enthusiasts, investors, and experts in Nigeria believe the exchange won’t succumb to Nigeria’s court demands.

This is because an act of meeting the demands of the court would go against the ethos of cryptocurrency and decentralization.

 

Dialogue or Sanction: Will Crypto Win?

Case observers believed the potential exit of Binance from Nigeria looms and could affect the growth of cryptocurrency and blockchain technology in the country.

 

According to Anndy Lian, a blockchain expert, Nigeria had the world’s highest proportion of crypto users.

Between June 2022 and June 2023, it had a 9% year-over-year growth of $56.7 billion in crypto transactions.

However, these figures could drop if the world’s largest crypto exchange by trading volume restricts trading operations in Nigeria.

While the Nigerian government and the EFCC believe this will help the Naira gain more value, citizens have shared concerns about basic blame games and lost priorities.

If a dialogue between both parties does not happen soon, Nigerian traders may have to look for other alternatives for their trading needs.

Source:https://www.economywatch.com/news/nigerian-court-rules-binance-must-provide-resident-traders-data-to-efcc

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j