Blockchains have a range of intriguing use cases, find out where you could start seeing blockchain next.
Blockchain is a relatively new word in most people's vocabularies, with more people every day hearing it for the first time. However, while the basics of blockchains can be reasonably easy to grasp, it's not always as easy to think of real-world use cases and applications for blockchain technology.
While you may think of bitcoin when you think about using blockchain, there's a world of potential to be explored surrounding blockchain use cases. Find out how blockchain could improve your life in the future in a range of strange and intriguing ways.
What are Public Blockchains?
When using a public blockchain, you interact with a publicly visible open network. Whether you download the blockchain, send a transaction, or otherwise participate in the network. This information is distributed and public in at least some fashion. The most well-known example of a public blockchain is Bitcoin. While many assume that Bitcoin is anonymous, it comes down to how you choose to use it with only the promise of pseudonymity. When using a public blockchain, it's common for your transactions or other interactions between addresses or smart contracts to be visible to anyone wanting to look.
What information connects you to your wallet address or other activity depends significantly on how you do things like buying and selling cryptocurrency. Using an exchange that enforces rigorous KYC requirements, you should assume that addresses you use to send or receive crypto from this account are potentially known to be controlled by you personally. One of the ways you can trade cryptocurrency with more anonymity is through P2P trading.
What are Private Blockchains?
On the other hand, private blockchains are more associated with business environments and in-house blockchains that may not even be exposed to the outside world. While companies opting to integrate private blockchains may face less risk with managing a blockchain inside their "walled garden," the downside is they lose many of the positive aspects of public blockchains. Decentralization, access, trustlessness, and more potential blockchain benefits are removed when opting for a blockchain that deals with restricted access. It's easy to argue in many cases that these types of systems are closer to resembling a database than they are a blockchain.
However, the world of private or semi-public blockchains may evolve in the future, with many projects looking to target the enterprise space with enterprise blockchain solutions.
The Problem with Permissioned Blockchains
Unlike public blockchains such as bitcoin, permissioned blockchains overlap significantly with private blockchains. An access control layer is built into the protocol or at the node level that manages different access levels available to those using the technology or accessing the data. Permissioned blockchains are something that you will often see in enterprise blockchain use.
While a public distributed ledger makes sense for many projects for sensitive data. Sometimes, this is the only practical way to integrate blockchain in a specific professional setting. However, like private blockchains, you lose many benefits by having a permissioned blockchain over a public blockchain. These typically only make sense in supply chain management or other areas where primarily private data is being dealt with inside a business.
Blockchain in Real Estate
Just as many forms of agreements over assets and other goods and services can be better optimized for the modern age, so can real estate. Real estate involves transactions, including significant transfers of valuable assets in property and the payment for these assets. As a result, legal expenses during real estate dealings can be pretty substantial.
Still, with the help of modern technology, blockchain applications can assist by providing less third-party involvement in these transactions while reducing the requirement for counterparty trust in the real estate world.
Blockchain Supply Chain Management
There is enormous potential for combining blockchains with supply chains. A range of metrics can be tracked and monitored for companies and consumers. Efficiency can be increased by better tracking and monitoring supply chains for potential issues or losses caused by inefficiency at less apparent bottlenecks. At the same time, authentication of products, verification of certifications, and other types of data can be provided publicly in ways that allow for auditing and review by anyone, increasing trust on the consumer or customer side of the equation.
Blockchain Applications in Healthcare
The authenticity of medications in some countries is a huge issue. Some regions are significantly high risk for those looking to purchase drugs and various medicines to manage health conditions. Being able to check data on a blockchain against a package in your hand and for pharmacies to do the same can reduce these risks while helping to hinder those marking bootleg or fake medications.
Another way healthcare can potentially benefit from blockchain technology is the storage of information. Vital records like patient data, treatment history, and blood types could be stored or verifiable against data on a blockchain. Ensuring data is accurate to those providing you care is essential to positive outcomes, and perhaps in the future, we will see more of this necessity being fulfilled by blockchains. While the medical industry can often adapt its underlying processes slower, potential cost-saving measures often stand out. For the healthcare industry, saving funds on storing patient data while increasing security is an excellent incentive to adopt blockchain.
Blockchain Compliance
While this sounds like surveillance, and there is potential for that too, in some ways, compliance can also be a social good in the proper context. For example, food safety is one significant place where verifying and monitoring compliance can potentially be better managed with blockchain. Being confident the food on your local grocery store shelves was monitored carefully to better protect against foodborne illnesses is likely something that many people would consider favorable.
Compliance can mean many things; it could involve better tracking of product testing outcomes and other critical regulatory factors that can come into play with more sensitive products. Blockchain can also assist compliance officers in better keeping track of complex regulatory guidelines and processes.
On-Chain Governance and Voting
The public and trustless potential for blockchains make them a great potential candidate for both governance and voting. Using the ethereum blockchain to vote on important issues is something we even do here at LocalCoinSwap. Some projects add governance directly into the protocol, such as the Maker Protocol using MKR tokens to adjust policies for the Dai stablecoin. Polkadot and Kusama also allow the community to vote on and control the evolution of their protocols. Some projects have been exploring decentralized voting in real-world elections. Many studies of the potential for blockchain use cases surrounding voting and elections have also been occurring, showing academic interest in the subject.
While fully decentralizing governments in the real world has a very long way to go, it's interesting to see how effective incentivized voting inside blockchain and cryptocurrency projects can be. For example, suppose you have to own assets affected by the outcome of the vote. In that case, you are incentivized to vote wisely, making it quite valuable when difficult decisions are in play, provided voters thoroughly understand the issues.
Can Blockchain Benefit Internet of Things (IoT) Applications?
The "Internet of Things" movement is slowly creeping into many of our homes. Everything from air conditioners to light bulbs to even fridges can have remote functionality. While people's opinions on this topic vary from excited to fearful, this doesn't seem to be slowing down soon.
As more devices make their way into the hands of consumers, more and more the way these devices need to engage not just with the users but the companies that manage external functions, and their needs to connect increases, as do their security needs. Using blockchain can reduce the risk of information available to devices being tampered with and potentially decentralize some of the data produced by these devices.
Access is also a concern regarding security in the IoT ecosystem, especially with devices in your private and personal spaces. Verification data could be stored, and the encryption used by many blockchains can help reduce potential security issues for IoT devices. Blockchains can also store data used by these devices to reduce the costs and infrastructure required by device manufacturers, likely resulting in more extended periods of after-sale support due to lower associated costs.
There are also microtransactions to consider when thinking about the IoT. Microtransactions using blockchain technology can be far more effective than traditional ways to transfer funds, especially when devices may only need to transfer tiny amounts of value between each other. Having this ability to transact value fast allows devices to interact with not just each other but smart contracts, users of devices in public spaces, or even access data from external sources that may require a small fee.
Smart Contracts on the Blockchain
Dealing with contracts can be pretty uncomfortable, so anything that can be done to improve the experience can make you feel more secure and reduce the associated costs and requirements for trust. Ensuring that your counterparty in an arrangement holds up their end of the deal can be stressful, especially with more extensive exchanges.
Like using escrow to trade peer-to-peer, smart contracts on blockchain can help with verification aspects and even process transactions among multiple parties in a trustless fashion. While you may have difficulty submitting blockchain evidence in some courts, this is something that the legal system is adapting to quite quickly out of necessity as more cases are beginning to require an understanding of distributed ledger and blockchain technology.
What Does Blockchain Mean for Charity?
Donating to charitable foundations and projects can be a fantastic thing. However, in the past, it's often been hard to be confident your money was used for what you gave it for in the first place. Transparency for charities that engage with blockchain technology can be increased under certain circumstances. Other potential avenues include rewarding achievements or milestones using smart contracts to release funds once specific real-world goals have been agreeably attained.
Charity is something that hasn't significantly changed over the years. Perhaps blockchain could help charities be more transparent and encourage people to invest in humanitarian causes because of this increased clarity.
Blockchain in Insurance
Blockchain applications in the insurance industry have broad potential. Insurance companies can reduce costs, streamline processes, and provide customers with a more transparent claims process.
Transactions can also be simplified, helping claims be resolved quicker. Many parts of the insurance process involve a lot of manual intervention. These repetitive and manual tasks can often be improved via blockchain, providing the insurance industry with many potential use cases to consider.
Blockchain Royalty Payments
Being paid for your content is a growing struggle among online and offline content creators. Even if you have a deal that entitles you to royalties for a piece of media that is being resold somehow, you have to trust that the numbers you are being shown and the amount you are paid are accurate. These issues can be reduced through the use of blockchain technology.
Payments can even be automated using smart contracts to send payments once certain conditions are met, such as a download or other purchases made on the platform hosting your content.
Blockchain-Based Social Media & Decentralized Social Networks
There's growing concern regarding social media giants taking advantage of the data collected from users and how they use this data to profit. As a result, many projects are looking for solutions to decentralize this connection between users and the social media platform by paying users for engagement or using approaches like paying users who view ads.
There are many varied approaches to tackling the issues connected with social media. It will be exciting to explore as these projects mature more going into the future. Will they compete with Facebook and others down the road? It's impossible to say, but it should make for some exciting developments in the future of social media.
NFTs & Digitizing Assets on the Blockchain
One example of digitizing or tokenizing an asset is stablecoins, enabling more traditional assets like the USD to be accessed without directly engaging with the assets. While different stablecoins function with varying degrees of trust, some are more centralized like USDT, others like DAI, operate with less centralization and can make for an interesting topic.
Another example of tokenized assets is NFTs. While it's easy to think of blockchain games and collectibles like CryptoKitties or Axie Infinity as games and novelties, they show the exciting potential of non-fungible tokens (NFTs). Unlike the majority of tokens on the Ethereum network that take advantage of the ERC20 token standard, instead, non-fungible tokens on Ethereum typically use either the ERC721 or ERC1155 standard.
Decentralized Finance (DeFi)
Banking, lending, borrowing, and other practices from traditional finance are being explored and transitioned into blockchain-based protocols and dApps. Projects like Uniswap, an automated market maker protocol (AMM), and many other intriguing projects popping up in the DeFi realm produce modern solutions to old financial concerns. This movement can shake up the banking industry and the world as we know it over time. Only time will tell how quickly this will happen and in what form.
However, for now, excitement is growing inside the cryptocurrency space in terms of what can be achieved, and when it comes to DeFi, so much is happening daily. Reduced dependence on banks and fiat could not just empower people to be more in charge of their funds but provide access to things those in struggling regions could use to provide themselves the essential services many of us take for granted. The fewer middlemen and intermediaries you have involved in your financials, the better equipped you are to control it.
Blockchains can shape many industries and how we interact with the world as we move into the future. Exploring blockchain use cases is a fantastic way to understand why so many people are excited about blockchain’s innovative possibilities.