The Blockchain technology was developed originally for preventing fraud in digital currency exchanges. But as we move into 2018, many industries are now seeing the myriad potential applications of blockchain especially in eliminating fraud and the “middleman” altogether.
Let’s explore the ways in which businesses can use blockchain to combat fraud.
By using smart contracts, like the one developed by Ethereum, sellers can fight fraud with blockchain technology. How, you say?
Smart contracts allows buyers and sellers to create if/then” contracts wherein one part of the process won’t be completed until the one before it has been completely verified.
For example, if you’re buying a dress online, the payment is held in a “digital escrow” until it is marked “shipped”. In this way, the buyer won’t risk losing their money and the seller isn’t risking the chance of not receiving payment. This particular concept can be used in virtually ANY exchange, deal or agreement. Regardless of how small or big an exchange is, both parties can fight fraud with blockchain and it eliminates the need for physical mediators to ensure it.
Smarter and Tighter Supply Chains
One of the most exciting places to observe the growth of blockchain is in the supply chain. In today’s global economy, we see a lot of companies around the world partner for manufacturing, pharma development, agriculture and everything else in between. But, the ability to ensure that the products and processes agreed upon are actually followed is blurred as the distance between these companies grows.
As a buyer and consumer, we are well aware of this issue. Companies can use blockchain to verify the legitimacy of every part of the supply chain process thus helping both buyer and manufacturer in combatting fraud.
Au Revoir, Identity Fraud!
Another major issue that blockchain can help solve is identify fraud. According to research, identity fraud cost consumers roughly $16 billion last year. Blockchain can solve this problem with the creation of personalized, digital IDs. This development would be a real game changer as it will make it easier to combat fraud with blockchain since the ledger can only be updated upon verification of both parties or users.
To sum it up, blockchain can function as an objective, trustworthy, third party mediator in virtually any transaction, deal or partnership imaginable. It guarantees trust and transparency, even among those who do not trust each other. It has potential applications in almost any industry you can think of. With blockchain, fraud will be a thing of the past.