Here are promising markets for any entrepreneur looking to dive into a long-term blockchain project.
5 min read
Opinions expressed by Entrepreneur contributors are their own.
With the emergence of blockchain technology, innovation seems far from over, and as new processes and systems emerge, entrepreneurs should be looking for market pain points in need of innovative solutions.
Of all the industries that can benefit from blockchain solutions, three stand out.
Transparency and traceability in supply chain management
Traceability, transparency and authenticity are the three key pillars of efficient logistics. However, the present day standard databases that are used to store the key information about the goods in transit are neither efficient nor foolproof. The records can be easily tampered with and manipulated, information is often not available or updated in real-time, and there is a serious lack of transparency, with no way for consumers to be able to track products from their origin to their endpoint.
Blockchain offers an efficient solution to such problems. If, for example, a drug is manufactured in Singapore and shipped to a U.S.-based patient, with a specific need to be stored below 4 degrees Celsius, placing a blockchain-supported RFID tag on the drug will cancel out the possibility of any damage or misuse occurring during transport. Smart sensors equipped with RFID record all necessary details and broadcast them in real time to the blockchain network, which will be accessible to all parties involved. In case of any violations, alerts can be sent out to all stakeholders who will then be able to deal with the issue instantly. Recording all data points on the tamperproof blockchain will ensure that the end customer will be able to track every single movement of the drug from its source to end delivery and the use of smart contracts will help in reducing the overhead costs and paperwork.
VeChain, which calls itself "the Ethereum for business," is a suppy chain management blockchain company that has partnered with firms like PwC and DNV GL. It is attempting to solve logistics problems of luxury brand items such as wine, auto car parts and the drug industry. IBM is also working on a supply chain blockchain, and has use cases that include massive retailers such as Walmart. The U.K.'s Food Standards Agency (FSA), a safety watchdog, recently announced that it has successfully piloted a blockchain-based supply chain monitoring system.
Blockchain solutions for customer loyalty programs
Research reports suggest that bringing in new customers costs up to five times more than retaining an existing one. Can blockchain help in maintaining customer satisfaction thereby maximizing business profits?
Loyalty points-based systems are one of the most popular ways to retain customers who repeatedly purchase more in order to cash previously earned loyalty points. Despite its success, these types of programs pose challenges to businesses. Along with operational overheads, if a large number of customers cash out their loyalty points at the same time, the margins of the business take a hit. Many times, customers also are dissatisfied with loyalty points if they have limited options of places to redeem them.
Creating such a system on a common-token based blockchain can help these issues. Instead of business-specific loyalty points, customers can be given blockchain tokens shared by various companies. If many unrelated businesses join the same network, it will significantly reduce their costs and customers will benefit from having more options on which to spend their loyalty points. You could earn loyalty tokens at your grocery store or from you air-miles program and spend it on a car wash or phone bill payment. Tokens can also be traded among customers, increasing their value, and even if a whole group of customers cashes out tokens at a particular store, the business will be minimally impacted as it can also use the tokens it receives.
BitRewards operates as a blockchain-based loyalty platform and allows retailers to reward their customers' purchases with BIT crypto tokens. Blockpoint is another similar platform that supports build multi-merchant loyalty point coalition programs, and also supports gift cards. Deloitte is offering its solutions for similar implementations.
Advertising directly to consumers without intermediaries
Merchants and businesses often rack up high advertising costs as a significant cut goes to the intermediary. Along with many issues in the process, when user data is shared with so many parties, it's privacy and security are compromised. For instance, we saw in the Cambridge Analytica scandal over 50 million users' data was accessed by a third party without their knowledge or consent.
Blockchain-based advertising platforms offer better ROI with lower costs and enhanced data security. Offering direct connections between advertisers and publishers, both parties can look at a variety of options and choose the ones that suit them best with the open rating system ensuring transparency and feedback.
QChain is a digital ledger application offering buying and selling of digital advertising, including native advertising. AdHive is another blockchain tech startup that has automated placement of native advertising with influencers allowing for greater efficiency and time savings. AdEx attempts to eliminate advertising frauds and pays only for valid clicks.
These are only a few of the industries in need of blockchain solutions, with more innovators, investors, and developers moving to the space, we will see overhauling of systems and the proliferation of blockchain tech in many more across the board.