When discussing about blockchain and its existing or potential uses across various industries, many are those who instantly wonder as to what blockchain really is and then declare it "far too complicated", without any further analysis. Others may directly relate blockchain with cryptocurrencies, instantly dismissing any further discussion since cryptocurrencies have had their share of bad publicity by being considered to enable money laundering/terrorist financing. Nonetheless, the capabilities of the underlying technology of blockchain are far more numerous than just for rewarding miners with cryptocurrencies.

The technological innovation stemming from blockchain technology is challenging social and legal concepts which we have for years considered set in stone. The use of blockchain has demonstrated to fundamentally speed up transactions, reduce costs, remove middlemen and provide transaction transparency, for which businesses spend hefty fees to safeguard and ring-fence their rights.

In its simplest form, blockchain is a decentralised technology or distributed ledger on which data is anonymously recorded based on pre-agreed consensus algorithms in the network of users. It is a form of database where data is stored in a chain of fixed structures called 'blocks', hence the name "blockchain". The stored information is mirrored on all participating computers, called "nodes", over the distributed network of users. Blockchain technology offers a decentralised solution that is not locally or centrally stored nor maintained by one single party. Depending on the blockchain type and whether it is a permission-less or permissioned blockchain, transactions are only recorded on the chain if all the users agree with the transaction's accurateness. Once a transaction is codified and added on the blockchain it is permanently stored, cannot be modified or erased and can be traced all the way back to its origination. This makes the blockchain ledger exceptionally accurate and secure. The use of blockchain technology is spiralling in almost all industries, examples of which are included below.

Insurance Sector

In the efforts of establishing a more transparent and trustworthy experience in the insurance sector, blockchain technology is being utilised to boost efficiency and productivity against cumbersome and fragmented processes currently being used. InsurTech companies utilizing blockchain technology can substitute manual business processes of insurance claims for handling, payment, subrogation and assessment (using smart contracts) and ensure that data cannot be altered, manifested or manipulated by recording it on the blockchain.

Food and Beverage Provenance

To enhance supplier reliability to consumers and give answers to questions such as "where does my food really come from" blockchain can be used in the food and beverage provenance industry. The underlying technology of blockchain can assist producers and suppliers alike to achieve end-to-end near real-time transparent tracking of goods, ensure food authentication and information from all stages in the supply chain and have a trusted audit trail from production to the end-consumers. Utilisation of blockchain can further assist with the ongoing monitoring requirements of suppliers with regards to food safety by regulators and governmental bodies.

Health Sector

In the health sector, blockchain technology is used for the setting up of decentralised platforms which enable secure, fast and transparent exchange and use of medical data. Such platforms create a user-focused electronic health record and maintain a single true version of that patient's data. Blockchain companies are also developing health data marketplaces through which users can negotiate commercial terms with third parties for alternative uses or applications of their health data (i.e. allowing their data to be used in medical research and being financially rewarded for it).

Legal Registries

Legal registries that can be "codified" on the blockchain may include land registries, corporate, commercial, patent or trademark, listed entity registers and in general all types of registries that document status, identity or rights of a person/legal entity. Due to the immutability characteristic of blockchain technology, having the register entry being verified on the blockchain can allow for an impenetrable and fully transparent audit trail throughout the history of the said entry. This will optimize tracing efforts in identifying legal ownership of assets as well as provide security and comfort that the entries are the true and accurate positions, as well as speed-up transaction tracing time and procedures.

Social Impact

Other than its abovementioned uses, blockchain can be applied or developed to fulfil purposes with a social impact. In a move towards smarter and more efficient governance, blockchain can be used to record everything from birth and death certificates to marriage licenses, travel history tracing, citizenship status or even voting rights. For a more transparent charity and donation ecosystem, blockchain can help with tracing charitable donations tied to specific outcomes, ensuring that philanthropists' contributions indeed reach their end purpose.

Overall, for some it might indeed feel daunting that blockchain is revolutionizing almost every industry we have known so far. The potential of this technology is enormous, and it depends on the innovator to put this technology to good use and create unique solutions. In fact, blockchain can have a tremendous impact on societies and it can be used to solve problems that have troubled countries and governments for years.

The legal effects of implementing such solutions in our everyday society are numerous and implementing changes to existing systems may in fact require lengthy legislative procedures. Furthermore, it will have to be ensured that all information stored on blockchains meet the requirements of secrecy, privacy and data protection, as well as modifiability and erasability, going in fact against one of the main characteristics of blockchain. Nonetheless, it cannot be ignored that blockchain is disrupting the way we are doing things going forward, from today to tomorrow.

In EY Cyprus we recognise the potentials of emerging technologies in the implementation of our client's day-to-day business operations. As a member firm of the EY global network, which was ranked first among the Big Four for blockchain services in the Top 10 Enterprise Blockchain Services Report, EY Cyprus has strong capabilities to assist clients in implementing their vision and strategy on the digitization of their offerings through blockchain.

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