If you've turned on the news at all lately you’ve most likely heard Bitcoin, FTX, and other cryptocurrencies being talked about. What you’ve probably heard less about is the technology powering it, called blockchain.  Regardless, of your thoughts towards cryptocurrency, blockchain technology is the real deal, be prepared to start hearing about it more often in the very near future. According to IBM, a blockchain is defined as a “shared, immutable ledger for recording a history of transactions.” A key feature of the blockchain is its security. Since blockchains are both shared and immutable, they provide a permanent digital ledger that is transparent and extremely secure. Though it is widely known in the context of Bitcoin, because of its robust security, blockchain technology is starting to be utilized across many industries. In addition to digital currency, healthcare, supply chain verification, and real estate are just a few of the industries that are being revolutionized by blockchain.

The healthcare industry is one where privacy and accuracy of an individual’s record are a high priority. By utilizing blockchain technology, not only could a patient’s records be private and accurate, but the use of blockchain would also give the patient greater control of their health history. According to IBM, with blockchain technology “every vital sign could be recorded, all of the medicines taken, information associated with every doctor’s visit, illness, operation and more could be efficiently and accurately captured.” In the not-so-distant future, it is possible that a person traveling overseas who becomes ill or injured would be able to not only access an accurate health history quickly and securely utilizing blockchain technology, but that information could also be shared back quickly with their doctor at home.

In the food and beverage industries safety is also key. Some companies offer their customers a fully integrated system across the entire supply chain, from the moment a shipment leaves the factory to the final delivery on the customer’s doorstep. The ability to track the temperature of the food, have accurate shipping and delivery dates, and monitor the safety certifications of facilities the food is passing through is extremely beneficial. Walmart is currently testing a similar software model. With blockchain technology, capturing multiple data points ranging from farmers to distributors to retailers and more, companies could be able to cut investigations into food-borne illnesses that take weeks down to just seconds. Being able to identify and resolve these types of issues could prevent thousands of cases every year. Walmart and virtually any company will be able to utilize blockchain technology further through the use of “smart contracts”.

“Smart contracts” is another one of those buzzwords that seems to be more and more popular. According to Harvard Business Review, a Smart Contract is a software program that self-executes complex instructions on a blockchain. With a smart contract, there is the opportunity to streamline mundane tasks while maintaining the integrity of the information. According to The Wall Street Journal, in the case of commercial real estate, smart contracts could translate into cheaper and more transparent property title management. By being more secure “tamper-proof and encrypted nature of blockchain is likely to make it difficult for perpetrators to commit fraud related to liens, easements, air and subsurface right, titles or transfers.” Making it more difficult to commit these types of fraud and simplifying the process may help to lower the cost of title management tasks. This is just one example of how smart contracts may help the real estate business. Smart contracts also have the potential to improve the property search process and expedite the pre-lease/deal due diligence and financial evaluation that is typically done before making a final acquisition of a property.

Needless to say, we are only hitting the tip of the iceberg when it comes to the potential of blockchain technology. Though many of the applications above are only in their infancy, blockchain technology should be something you and your company pay attention to. The technology is going to continue to grow at a rapid pace and touch aspects across all industries. In the next decade the question is not going to be if your company utilizes blockchain technology, but how? If you have any questions about this article or are interested in improving your business systems, please reach out to RubinBrown.

^{Readers should not act upon information presented without individual professional consultation.}

^{Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.}