Benefits of blockchain technology: A Comprehensive Exploration

Which One is Right for Your Business? Public blockchains, such as Bitcoin and Ethereum, offer a high degree of decentralization, security, and transparency, while private blockchains, such as Hyperledger Fabric and Corda, prioritize privacy, control, and scalability. By knowing the pros and cons of each type, you can discover the benefits of blockchain technology and then make an informed decision on which blockchain to use for your specific use case and industry.

The Motivations Behind Public and Private Blockchains:

Image by Gerd Altmann from Pixabay

Public blockchains prioritize decentralization, transparency, and community-driven governance, while private blockchains prioritize control, privacy, and scalability for specific business needs. Understanding the underlying motivations behind each type can help you choose the right blockchain for your business goals and industry requirements.

Benefits of blockchain technology: Public Blockchains

To date, public blockchains have been used with some success in the following areas:

  1. Speculation
  2. Darknet markets
  3. Cross border payments
  4. Initial Coin Offerings


The main use for cryptocurrencies is undoubtedly speculation. Their prices are volatile and people make and lose a lot of money trading these coins.

The fact that there are no established methods to value a cryptocurrency means that prices are likely to remain volatile for some time. This differs from traditional financial markets where pricing models help to constrain prices to within broadly understood limits. Equities have well-established pricing methodologies. Discounted forecast cashflows, book value, and enterprise value calculations can help to establish a consensus on the value of a company.

Ratios such as earnings per share, price to earnings, and return on assets can help to compare share prices between similar companies. Fiat currencies trade on the basis of comparative economic data. Other traditional financial assets have other standardised pricing methodologies. Up to now, however, I have not seen credible methods for pricing cryptocurrencies or ICO tokens. This is changing—as the industrypricing cryptocurrencies or ICO tokens. This is changing—as the industry matures, pricing models are being explored, but it will take some time for these models to become widely accepted.

Darknet Markets and Blockchains

Darknet Markets and Blockchains

Cryptocurrencies have been used with some success to buy items from underground marketplaces.

Unfortunately for some, the traceability of certain cryptocurrencies makes them flawed candidates for illegal activity. In 2015, two US Federal Agents from the Drug Enforcement Agency (DEA) and the US Secret Service, sought to enrich themselves while conducting an undercover investigation of the Silk Road drug marketplace. Perhaps they believed that Bitcoin was anonymous and untraceable. They allegedly stole, bribed, blackmailed, and laundered the proceeds while under cover and were eventually charged with money laundering and wire fraud. Here is an excerpt from a press release issued by the US Department of Justice:

Carl M. Force, 46, of Baltimore, was a Special Agent with the DEA, and Shaun W. Bridges, 32, of Laurel, Maryland, was a Special Agent with the U.S. Secret Service (USSS). Both were assigned to the Baltimore Silk Road Task Force, which investigated illegal activity in the Silk Road marketplace. Force served as an undercover agent and was tasked with establishing communications with a target of the investigation, Ross Ulbricht, a.k.a. ‘Dread Pirate Roberts’. Force is charged with wire fraud, theft of government property, money laundering and conflict of interest. Bridges is charged with wire fraud and money laundering.

Drug Enforcement Agency

According to the complaint, Force was a DEA agent assigned to investigate the Silk Road marketplace. During the investigation, Force engaged in certain authorized undercover operations by, among other things, communicating online with ‘Dread Pirate Roberts’ (Ulbricht), the target of his investigation. The complaint alleges, however, that Force then, without authority, developed additional online personas and engaged in a broad range of illegal activities calculated to bring him personal financial gain. In doing so, the complaint alleges, Force used fake online personas, and engaged in complex Bitcoin transactions to steal from the government and the targets of the investigation.

Specifically, Force allegedly solicited and received digital currency as part of the investigation, but failed to report his receipt of the funds, and instead transferred the currency to his personal account. In one such transaction, Force allegedly sold information about the government’s investigation to the target of the investigation. The complaint also alleges that Force invested in and worked for atarget of the investigation.

Benefits of blockchain technology and DEA

The complaint also alleges that Force invested in and worked for a digital currency exchange company while still working for the DEA, and that he directed the company to freeze a customer’s account with no legal basis to do so, then transferred the customer’s funds to his personal account. Further, Force allegedly sent an unauthorized Justice Department subpoena to an online payment service directing that it unfreeze his personal account.

Bridges allegedly diverted to his personal account over $800,000 in digital currency that he gained control of during the Silk Road investigation. The complaint alleges that Bridges placed the assets into an account at Mt. Gox, the now-defunct digital currency exchange in Japan. He then allegedly wired funds into one of his personal investment accounts in the United States mere days before he sought a $2.1 million seizure warrant for Mt. Gox’s accounts.

On 1 July 2015, Force pled guilty to money laundering with predicates of wire fraud and theft of government property, obstruction of justice, and extortion. Later, on 31 August 2015, Bridges admitted that he stole over $800,000 of Bitcoin while on the case, and pled guilty to money laundering and obstruction of justice.

What can we learn from this? Don’t use bitcoins to perform or fund illegal activities.

Cross Border Payments

While there may have been some limited success in using cryptocurrencies as a vehicle to move fiat across borders, adoption has been limited. I personally performed an experiment in 2014 when I sent $200 Singapore dollars to my friend in Indonesia 205 using three methods:
Western Union, bank transfer, and Bitcoin. The Bitcoin route was by far the worst user experience, and the most expensive. However, Bitcoin has become more usable since then, and I expect it to continue to improve further.

The core problem is that in a conventional fiat-to-fiat remittance, whether through a financial services agency such as Western Union or through the banking system, there is only one exchange of currencies.through the banking system, there is only one exchange of currencies. Using cryptocurrencies, there are now two exchanges: fiat to crypto, then crypto to fiat. More exchanges mean more steps, complexity, and cost.

Cross border payments were initially trumpeted as a ‘killer app’ for Bitcoin and cryptocurrencies, especially in 2014–15, but in 2018 there is less media attention for this particular use of cryptocurrency. Indeed, in June 2018, money transfer agency Western Union announced that they had been testing XRP for six months and were yet to see any savings.
Perhaps the industry is in the ‘trough of disillusionment’ in Gartner’s technology hype cycle.

Initial Coin Offerings (ICOs)

cardano blockchain, Initial Coin Offerings (ICOs)

ICOs are a new method of fundraising that became popular in 2016.
Companies offer tokens to people in return for cryptocurrency. Tokens usually represent a claim on future goods or services provided by that company. We discuss Initial Coin Offerings in more detail in one of our post here.

Benefits of blockchain technology and ‘fringe’ purposes

Some merchants use cryptocurrency payment processors to accept cryptocurrencies from customers as payment. In 2014 and 2015, it was a cheap way for merchants to get press releases and seem innovative.
However, since then many have quietly removed this payment mechanism due to lack of customer interest.

I have seen public blockchains being used for other ‘fringe’ purposes, for example the storing of hashes on a blockchain to prove that some data existed at a certain point in time. I haven’t seen evidence that this use is particularly widespread.

Critics of cryptocurrencies often claim that they are widely used formoney laundering. While there is undoubtedly some laundering of illicit funds using cryptocurrencies, as there is using fiat currencies, it is hard to tell at this stage what proportion of cryptocurrency transactions are used for this purpose, and what proportion of global money laundering is performed through cryptocurrencies. For serious organised crime, I suspect that the cryptocurrency markets are just too small and illiquid to satisfy their demands. Big business enterprises, high value banknotes, even banks still are more likely to be the preferred vehicles for most money laundering.

Benefits of blockchain technology and Private Blockchains

While public blockchains have enabled censorship resistant digital cash, they were not designed to solve problems that traditional businesses have. What are the challenges within existing businesses, and how might concepts borrowed from public blockchains help improve how they operate?

Business-to-business communication

Processes within an organisation have, over time, been made efficient by use of internal systems, workflow tools, intranets, and data repositories.
However, the sophistication of technology used to communicate between organisations has remained low. In some advanced situations, APIs (application programming interfaces) are used for machine to machine communications, but in the majority of cases we rely on emails and pdf files. It is still common for pieces of paper with wet-ink signatures to be couriered across the world.

Duplicative data, processes, and reconciliation

Businesses trust their own data but not anyone else’s. This means that businesses within an ecosystem duplicate data and processes. Digital filesbusinesses within an ecosystem duplicate data and processes. Digital files and records are often replicated within and between multiple organisations, with none of them being the golden source. Version control of documents and records is painful unless a third party is paid to be the golden source. Reconciliation only goes some way to solve these pain points.

Consider a digital invoice issued by company A to company B. The invoice could be a pdf file which is created by someone at company A, perhaps signed off by someone else in company A before a copy is sent from the accounts receivable department to someone at company B. Someone at company B receives it in their inbox, saves a copy on their hard drive, and forwards a copy to someone else, perhaps their manager, to sign off.

Another copy goes to the accounts payable department and, when the invoice is paid, everyone needs to be updated. There could be ten or more copies of the same asset—the invoice—floating around various computers, none of which are kept in sync. When the state of the invoice changes from ‘unpaid’ to ‘paid,’ this is not reflected on all of the copies of the invoice.


the benefits of blockchain technology for business and society are truly remarkable. By embracing this innovative technology, we can achieve greater security, transparency, efficiency, and accountability in a variety of industries. The five essential benefits of blockchains are:

  • Immutable and tamper-proof records
  • Decentralized and distributed architecture
  • Greater transparency and traceability
  • Enhanced security and privacy
  • Reduced costs and faster transactions

By leveraging these benefits, blockchains have the potential to transform the way we do business and interact with each other in the digital age. Whether you are an entrepreneur, investor, or simply curious about the future of technology, now is the time to explore the amazing benefits of blockchains and the endless possibilities they offer for a better, more connected world.