Blockchain technology has the potential to sustain enterprises’ scope expansion and improve efficiency through its unique decision-making process, also known as a consensus mechanism. This technology enables fast transactions and agreements between the network’s participants without the interference of third parties. Transaction settlement is also less exposed to cybersecurity risks, with the TPS (transactions per second) measurement improving continuously.
Not all blockchains use the same consensus mechanism, so their performance depends on several factors. Ethereum uses the proof-of-stake consensus, which makes transactions faster and more sustainable. On the other hand, Bitcoin leverages the proof-of-work mechanism, which users consider to be safer but slower. Still, the ETH/BTC differences contribute to a diversified ecosystem where blockchains and their native cryptocurrencies serve distinct features. In this case, Ethereum focuses on expanding decentralized applications, while Bitcoin perseveres as a store of value assets.
Together with other digital ledgers, Ethereum and Bitcoin help lay the foundation for future innovation. Let’s see what it is about.
Blockchain in financial services
One of the best use cases of blockchain in the real world stands in financial services, where centralization, outdated systems and inefficient technologies have contributed to slow processes. Blockchains can change that by offering the architecture for:
- Cross-border payments without intermediaries that sustain almost instantaneous and low-cost global transactions, like Ripple and Stellar already do;
- Decentralized Finance (DeFi) for lending, trading, and trading in traditional financial institutions to address the problem of the unbanked;
- Security and fraud prevention based on transparency and immutability features, along with records on public ledgers that anyone can verify;
Several financial institutions have already approached blockchain technology. For example, ING Bank works with a blockchain-based platform to automate finance transactions and streamline operations. Bank of Canada explores how the use of distributed ledger technology (DLT) could improve interbank payment settlements. Finally, the Swiss bank UBS developed a pilot blockchain-based payment system for cross-border transactions.
Blockchain in healthcare
One of the most critical industries in the world is facing unprecedented challenges of poor regulations, data security, and lack of transparency. The over-reliance on outdated technology hinders improvements, which is why blockchain could provide:
- Secure medical records through safe and decentralized data storage, reducing the risks of data breaches and unauthorized access;
- Drug traceability by tracking products through the entire supply chain, preventing the circulation of counterfeit medication;
- Insurance claims through process automation that will ensure valid claims will be paid out so administrative costs are reduced;
Real-world examples of blockchain in healthcare exist: Medicalchain leverages blockchain to maintain patient data integrity. Patientory enabled end-to-end encryption to secure patient data so only patients, healthcare providers, and clinicians can access it. Finally, Nebula Genomics uses blockchain technology to make the genetic studying process seamless, eliminating intermediaries.
Blockchain in energy
Climate change urges authorities and enterprises to find more sustainable ways to provide energy for the population since fossil fuels are detrimental to the environment. Blockchain has the potential to revolutionize the energy sector by addressing challenges and supporting:
- Decentralized energy trading so users can buy and sell energy without intermediaries to sustain efficient energy markets;
- Grid management and optimization through real-time data on energy consumption to make the use of energy resources more efficient;
- Renewable energy certificates that require a better issuance and verification process to meet regulatory requirements;
Several energy companies leverage blockchain technology. For example, ACCIONA is developing the first energy blockchain in the world to track the production of green hydrogen from renewable sources. Enel experiments with blockchain use cases in grids, trading, and renewable energy, while SunContract sustains the buying and selling of renewable energy through blockchain.
Challenges of blockchain adoption
Despite the numerous use cases and potential benefits for a safer and faster future, developers and enterprises will face numerous difficulties in making blockchain accessible. Due to its rapid growth, the technology itself presents several limitations regarding scalability and performance. Popular digital ledgers still struggle to handle a high volume of transactions, so they’re approaching solutions like layer-2 rollups and sidechains.
Interoperability is another issue since the need for blockchains to communicate with each other rises every day due to cybersecurity concerns. Data transferred between ledgers must be protected, and the process needs to be efficient and fast to avoid congestion and pending transactions.
Energy consumption is another issue, especially for blockchains using the proof-of-work consensus mechanism, such as Bitcoin. The process requires a huge amount of energy as miners solve complex mathematical problems and add blocks to the blockchain using energy-intensive hardware. According to Statista, Bitcoin’s energy consumption in 2025 will be between that of Australia or the Netherlands.
The need for renewable energy in blockchain
The future is not only about decentralization, high-speed technologies and automation. It’s also about preserving the environment and offering citizens cleaner air, healthier ecosystems and sustainable processes, which is why blockchains must switch their sourcing to renewable energies.
Here are current efforts to make Bitcoin’s energy usage more sustainable through solar and wind solutions, reducing costs and lowering its carbon footprint. For instance, Texas, one of the most important Bitcoin mining hubs in the world, is expanding the use of wind and solar power to stabilize the grid during periods of low demand.
Iceland, on the other hand, leverages its geothermal energy for Bitcoin mining, so it relies less on cooling infrastructures and benefits from low costs and a carbon footprint. Another notable example is Canada, where hydropower sources from spots like Quebec are efficient options for Bitcoin mining. The projects also support the development of a new and flourishing renewable energy infrastructure, mainly since hydroelectronic resources contribute to grid stability.
Do you think blockchain technology is useful?
Blockchain technology is one of the most innovative tools that could shape the future. It brings decentralization, programmable environments and cryptocurrencies for fast payments without the need for intermediaries, which saves time and costs. It could be helpful in industries like finance, healthcare, and energy, but challenges regarding regulatory uncertainty and poor energy consumption might hinder evolution. That’s why blockchain must adopt renewable energy solutions, such as solar, wind and hydro, to solve their carbon footprint contribution.
