Blockchain is a word that is relatively new 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 that can be further explored regarding the use cases of blockchain. 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 are interacting 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 relies instead on how you 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 aren't necessarily exposed to the outside world at all. 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 blockchain technology.
Unlike public blockchains such as bitcoin, permissioned blockchains overlap significantly with private blockchains. An access control layer is built into the protocol or sometimes at the node level that manages different levels of access available to those using the technology or accessing the data contained. 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 do lose a lot of the benefits by having a permissioned blockchain over a public blockchain, so these typically only make sense in places like supply chain management or other areas where primarily private data is being dealt with inside a business.
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. Often real estate involves transactions that include significant transfers of valuable assets in the form of property and the payment for these assets. Legal expenses during real estate dealings can be quite 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.
Supply Chain Management
There is enormous potential for combining blockchains with supply chains. A range of metrics can be tracked and monitored both 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 publically in ways that can allow for auditing and review by anyone, increasing trust on the consumer or customer side of the equation.
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 be able to do the same can reduce these risks while helping to hinder those marking bootleg or fake medications.
Another way that 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 be slower to adapt to changes to underlying processes, often potential cost-saving measures stand out. For the healthcare industry, saving funds on storing patient data while increasing security is an excellent incentive to adopt blockchain.
While this sounds like surveillance and there is potential for that too, in some ways, compliance can also be a social good in the right context. Food safety is one significant way that verifying and monitoring compliance issues can be a big issue and one that can be better managed potentially with blockchain. Being confident the food on the shelves of your local grocery store was monitored carefully to better protect against foodborne illnesses is likely something that many people would consider a positive thing.
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.
Governance and Voting
The public and trustless potential for blockchains makes 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 of blockchain and cryptocurrency projects can be. If you have to own assets affected by the outcome of the vote, you are incentivized to vote wisely, which makes it quite useful in making difficult decisions, provided voters thoroughly understand the issues.
Internet of Things (IoT)
The "Internet of Things" movement is something that is slowly creeping into many of our homes. Everything from air conditioners, light bulbs, to even fridges can have remote functionality enabled. While people's opinions on this topic vary from excited to fearful, this is something that doesn't seem to be slowing down any time 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, so 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.
When it comes to security in the IoT ecosystem, access is also a concern, especially with devices that exist 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 using 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 for 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.
Dealing with contracts can be quite uncomfortable, so anything that can be done to improve the experience can not just make you feel more secure but reduce the associated costs and requirements for trust as well. 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 and blockchain technology can be help with verification aspects as well as even processes transactions among even 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 necessity as more cases are beginning to require an understanding of distributed ledger and blockchain technology.
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 achievement 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 not just to be more transparent but to encourage people further to invest in humanitarian causes because of this increased clarity.
Blockchain applications in the insurance industry have broad potential. Insurance companies can reduce costs, streamline processes, and provide a more transparent claims process for customers.
Transactions can also be simplified, helping claims be resolved quicker. Many parts of the insurance process involve a lot of manual intervention. These types of repetitive and manual tasks can often be improved via blockchain, providing the insurance industry with many potential use cases to consider in the future.
Being paid for your content is something that is a growing struggle among both 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 in some way, you have to trust that the numbers you are being shown and the amount you are being 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 taking place or payment being received by the platform operator that is hosting your content.
There's growing concern regarding social media giants taking advantage of the data that is collected from users, as well as how they use this data to profit. 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 how the issues connected with social media are being tackled. It will be an interesting thing 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 interesting developments in the future of social media.
One example of digitizing or tokenizing an asset is stablecoins, which allow for access to more traditional assets like the USD without directly engaging with the assets. While different stablecoins function with varying degrees of trust, and some are more centralized like USDT, others like DAI, operate with less centralization and can make for an interesting topic in itself.
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 ERC-20 token standard, instead, non-fungible tokens on ethereum typically use either the ERC-721 or ERC-1155 standard.
Banking, lending, borrowing, and so much more of traditional finance is 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 are producing modern solutions to old financial concerns. This movement has the potential to shake up not just the banking industry but the world as we know it over time. How quickly this will happen, and in what form, only time will tell.
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 have control over it.
Blockchain Oracles Taking Things Further
Blockchains are great for many things; however, one area they struggle with is automating access to external data sources, especially those in real-time. One way being explored to help bridge this gap in blockchain ledger technology is the use of blockchain oracles alongside smart contracts. The use of blockchain oracles allows for even broader blockchain applications to be discovered. The potential of this technology is still in its relative infancy, so in the future, we may see some extraordinary things come from projects working on the blockchain oracle problem. If you want to learn more about blockchain oracles and their exciting potential to empower blockchain applications with real-time data, check out our article Breaking Down Blockchain Oracles!
If you want to explore the potential capabilities of blockchain-based use cases yourself, you can get started by buying some bitcoin, ethereum, or another cryptocurrency with the help of LocalCoinSwap.
Similar to many of the use cases above, LocalCoinSwap allows you to reduce the need for intermediaries and middlemen. Sign up and get started trading today at LocalCoinSwap.com