10 ways smart cities can benefit from blockchain led innovation.
1. A reliable registry of local businesses. A local business registration system on blockchain can illuminate the lifecycle of a company from start to finish, providing a trustworthy, 360-degree view to interested parties.
2. A virtual “storefront” for every business. Blockchain can help smart cities create integrated solutions for local commerce. Virtual storefronts — for retailers, service providers, restaurants, and lodging options — on a smart city platform can use blockchain as a secure, distributed method for peer-to-peer transactions, payments, and identification services. Even more ambitious, some smart cities have announced plans to use blockchain to build an engine for finding and purchasing local services.
3. Trade logistics and finance management. Blockchain-based trade logistics and finance management solutions at the city level can drive efficiency and create transparency by removing needless layers of verification.
4. A reliable registry for service jobs. An employment registry of workers can offer a trusted snapshot of employment history, creating more certainty among citizens when hiring for common services like plumbing or electrical work.
5. Payments and money transfers. The most well-known blockchain application is the ability to send and receive payments, and that becomes particularly useful for companies who have remote employees or are involved in the global marketplace. Small business owners can use blockchain to transfer funds directly and securely to anyone, anywhere, and almost instantly with very low fees. That’s because there aren’t any middlemen slowing down the transfer and charging large transaction fees.
6. Smart contracts. Smart contracts execute autonomously between several parties once certain pre-set conditions are met. They transform transactions and agreements into unbreakable deals without a mediating third party, making the process faster and less expensive.
The blockchain is ideal for storing smart contracts because of the technology’s security and immutability. It can also be used to help improve the cash flow of a small business, as smart contracts allow for the automatic, instant payment of invoices once a transaction is processed. Finally, smart contracts speed up blockchain, reducing the delay of “blockchain mining,” during which a distributed network worked to verify a transaction with a mathematical formula.
7. Notary services. Blockchain can provide cheap and convenient notary services. For instance, the web application Stampd.io uses blockchain to provide notarized proof of ownership for digital creations.
8. Fighting fraud. By 2020, $4 in every $1,000 of online payments is projected to be fraudulent — costing businesses more than $25.6 billion. Blockchain makes tracking and managing digital identities irrefutable and secure by using digital signatures based on public key cryptography instead of today’s vulnerable password-based systems.
9. Supply chain communications/proof-of-provenance. Most products aren’t made by a single company, rather by a chain of suppliers who sell their components to a brand that puts it all together and markets it to the public. But if one of the components fails, the brand bears the brunt of the backlash.
Blockchain technology offers a digitally permanent, auditable record to show stakeholders the state of the product at each step along the way. It can also help streamline the operation of the supply chain by making everything transparent. Immutable records can be used to ensure that all standards have been met, such as health and safety requirements.
10. Distributed cloud storage. Blockchain can be used to create a secure, encrypted, decentralized cloud storage solution. Every aspect of cloud storage — transport, processing, and storage of data — is entered into the blockchain, creating accountability and transparency.