Michael Kordvani writes about new technologies and their application. He has a computer science degree at Queens College. His work has been published on various technology blogs across the web.
There are many use cases for decentralized applications, or dApps, in business. Permissioned and permissionless blockchains are being tested and implemented right now in a variety of sectors, such as banking, real estate and media.
Permissioned or private blockchains (DLT) typically do not require tokens to function. Access to permissioned blockchains is restricted to approved members. This is in contrast to permissionless or public blockchains that are open to anyone and usually require tokens to access the features of dApps.
A blockchain developer can build dApps based on smart contracts for a permissioned or permissionless blockchain to implement various ideas for business. Here are some ideas for blockchain and DLT applications in business.
Typically, a goods exporter prefers to receive payment upfront before shipping goods, and an importer wants to make payment after the goods have been sent.
This gap is typically filled by trade financing offered by banks. It is estimated that 80 to 90 percent of global trade relies on trade finance. There are usually four entities involved in a typical trade financing transaction. These entities are a buyer/applicant, a beneficiary/seller, an issuing bank and an advising bank.
There are numerous documents, agreements and payments that are exchanged among the four entities. The current trade finance system is a very complex and time-consuming process. There can also be bottlenecks, operational mistakes and/or misunderstandings among the four entities.
Solution. Blockchain technology can be used to streamline the trade finance process, make it more efficient and less prone to error. All buy/sell agreements, letters of credit and any other necessary documents can be encrypted and shared simultaneously among the four entities involved in trade financing on the blockchain. A dApp based on a smart contract can be developed to verify transactions and automatically release payments as goods ship from a warehouse to a mode of transportation to their final destination.
Real estate is also an area that will be impacted by dApp development. The process of buying and selling homes is very complicated, with intermediaries like real estate agents, house inspectors, title companies, banks and attorneys that add more layers of complexity.
A dApp based on a smart contract can be developed to record titles and transfer titles as part of real estate transactions. DApps can potentially reduce paperwork, the need for attorneys and other third parties, reduce fraud, speed transactions, lower transaction costs and help democratize real estate. Payments for real estate can also be arranged in an agreed-upon cryptocurrency.
It is often difficult to locate the owners or copyright holders of creative content. This is problematic for producers who wish to license content and make royalty payments to the rightful owner. A dApp can be developed to keep tabs on who created specific content, who has used the content in new creations and who is owed royalties. The blockchain could eliminate the need for a centralized organization to track and monitor the owners of creative content.
Piracy remains a big problem for the music, film and TV businesses. Piracy robs content creators and distributors of revenue. A dApp based on a smart contract can be developed to allow sales and purchases of specific creative content on a blockchain. A cryptocurrency could be used as the medium of exchange. Content creators could sell their products directly to consumers on the blockchain and completely cut out the distributor and related distribution fees. In addition, payments for content can be accepted in an agreed-upon cryptocurrency. The purchaser’s wallet can be debited and the content owner’s wallet can be credited.
There are many ideas for dApps that can be used in business. DApps will soon bring significant changes to the banking, real estate and media industries. In particular, dApp development will be a key part of trade financing for global trade, real estate transactions and tracking ownership of creative content.
Want to learn more about dAPPs and their application in business? Connect with Michael on LinkedIn.