Introduction
The blockchain technology is the core concept behind cryptocurrencies like Bitcoin. But cryptocurrencies are only one possible application of the blockchain. In this post, we will explore other uses cases for this interesting technology and how it could potentially change the world we are living in.
Case 1: No more banks?
Let's start with the more obvious because it got the most attention. A blockchain rests on a decentralized ledger. There are no third parties involved in the process. In the case of a bitcoin transaction, your bitcoin goes from one wallet to another, without having to rely on an institution or government to make it happen. In our current society, we trust banks to execute a lot of operations concerning money. The blockchain would allow users to skip the middlemen and just deal with one another.
With that being said, it seems like we are a very, very long way from this scenario becoming reality. Cryptocurrencies are simply too volatile to be trusted to replace the current system. It is interesting to note that banks seem to be active about the blockchain technology. A company called R3 recently worked with more than 40 banks to imagine a possible future for blockchain with banking establishments. R3 recently launched a version of its blockchain backed by a dozen banks.
Why would banks be involved in a concept that could essentially make them obsolete? Well, blockchain has a lot of potential applications, as you'll read next, but we can easily imagine how banks ( and a lot of other organizations ) could reduce their costs by not having to deal with third parties organisms.
sources:
Reuters
Case 2: Make Uber and AirBnB useless ?
When you think about it, plateforms like Uber and AirBnB share the same concept. They are intermediates, they centralize the informations their users need. A 'bank for cabs', or 'bank for rooms' if you will. You need a ride, someone else has a car, you use Uber to share your informations. Of course, in the process, Uber takes a little something, driving the costs up. Same for AirBnB. While those companies and their services are not as essential in our societies as banks, the blockchain could suppress the need for them.
For example, arcade.city is a project created by a former Uber driver. It relies on a peer-to-peer network, you don't need to use a third party to find a driver or a passenger. Nobody but the two agents ( the one with the car and the one without ) decide on the price. You don't even need to use money. If you want to exchange a car ride for a sandwich or a ticket to a football game, what's the big deal? Blockchain works on decentralized trust, nobody gets in the middle of your transaction.
slock.it is a company hoping to replace Airbnb. The slock.it blockchain technology is based on Ethereum.
Case 3: Local energy markets ?
The electricity market is a top to bottom system. Someone produces the electricity, someone consumes it. But, in today's world, some consumers are able to produce their own electricity. How do we deal with people who have solar panels and an excess of electricity? How do you make them part of the network?
The SolarCoin allows people to make electricity transactions between private individuals. We could imagine a market where individuals buy and sell their energy using the blockchain to secure the transactions. Again, costs would go down, because nobody but the seller and the buyer would intervene in the transaction.
Case 4: Smart contracts
So far, you may have recognize that a few things seems to happen when using a blockchain: costs go down because intermediates disappear, the decision process is much faster because it is automated and it is safer because the blockchain is transparent.
We could imagine countless applications for smart contracts. Imagine contracting an insurance, you and the insurance company agree on some terms. The smart contract takes the informations it needs, and as soon as the conditions are met, the payment is made.
A airline could create insurances using the blockchain technology to compensate people where a plane is late. The smart contract would gather informations about the planes time of departure, and whenever a plane would be late, the user would be compensated. Without her having to do anything, filling a form or make a phone call.
AXA, a french insurance company, invested 55 millions $ in a canadian company called Blockstream.
A management school in Marseille (France) already uses the blockchain to certify its degrees.
Project managers, art professionals and many more could benefit from such a technology to prevent fraud.
Case 5: Prevent medecines frauds?
Blockchain is a transparent way to store informations, nobody controls it and it is secure. It could be a great way to trace medicines and make sure the drugs you are using are approved by organisations you can trust. The Health World Organization estimates 700 000 people die every year because of counterfeit drugs. Between 10% and 30% of drugs are counterfeit in third world countries.
Still on the health department, Estonia used the blockchain to secure 1 million health records. source
Case 6: Safer land registers?
Not a (huge) problem in rich countries, but in certain countries, lands are not registered in any database. How do you prove a land is yours? What prevents your neighbor, or anyone else, to come over and take your land?
Land registers in some countries are either non existant, or obsolete for a lot of rural areas. Not being able to prove ownership of your land is a huge obstacle to development.
In Ghana, a startup called Bitland uses the blockchain to register land acts. Apparently, they use something called Graphene.
In Honduras, the government registered its entire territory on a blockchain with the help of a company called Epigraph.
Case 7: Better democracies?
When we think about democracies, we think about voting. That is what it is. We ask everyone in a country, state, organization, company and count the votes to determine a winner.
The blockchain could again help with the process. The transparence of the blockchain could make sure no frauds happen, and enable a safe online vote.
It could work like this: an organization ( country, company ) wants to organize a vote. Let's say a company with 100 employees. The company will use a protocol to create its own tokens ( like Bitcoin is a token ). It will emit 100 tokens, one for each employee. Every employee has access to a wallet, that will be used as a public ballot box. An employee would then transfer the token with the data that represents its vote. Like in the Bitcoin world, each employee would have a key ( part public, part private ) that would prove she is indeed the owner of the wallet.
We are obviously far away from being able to hold large scale elections with blockchain, as there are a lot of problems to solve first, but this is another use case that could be interesting to explore.
Conclusion
The more I read and learn about blockchain, the more I am convinced that it will change our societies for the better. These 7 examples are just a short list of what could be possible, and we probably just scratched the surface.
Sources: ( in French )
7x7 Article
Top comments (13)
Thanks for sharing, Damien! It's interesting to read about the potential of blockchain from someone who actually seems to understand what's going on. I've spent some time reading articles on the how and why of the blockchain and though I can't claim to fully understand the technology, I'm slowly getting the gist of it.
The potential of blockchain technology seems huge, but do you think it already has made an impact on society right now?
And are there any risks in using blockchain technology? For example, It feels like so few people have a grasp on the workings of it, that it seems almost trivial for people to capitalize on the hype around the word and the lack of knowledge of others. Just a thought!
I think I agree on the last thought. Cryptocurrencies gained a lot of attention and it’s obvious a lot of people don’t fully understand what’s going on. They see it as a quick way to make money, and it looks like a lot of them don’t realise they could actually lose a lot. I mean, Coinbase even send an email to its users recently warning them to ‘invest responsibly’.
As far as the impacts on society, I don’t think they are that big so far. One of the problems seems to be that blockchain doesn’t scale so well. You may have heard about the amount of energy needed by the bitcoin blockchain to validate its blocks. Potential is huge, but some problems will have to be solved first I believe. And one of them is absolutely educating people on what this technology can and cannot do.
The cryptocurrencies example is quite disappointing to me. It looks like a potential alternative money is just another speculative tool that just consumes a shit ton of energy. On the cryptocurrencies front, it appears we went completely backwards.
Thanks for sharing. It's interesting to get some more insight into where this is heading. I'm glad I'm not the only one that feels slightly disappointed by the unkept promise of cryptocurrency.
Very interesting, I was totally waiting to read about different usages of decentralized ledgers, thanks!
I've actually been in part of the consultations around use case 6 in the UK. The timeline is definitely 10+ years however the land registry is 100% backing this movement which I was completely staggered by when first attending the meetings.
It's going to be a huge programme of work but the attitude towards it from those involved in it's mobilisation definitely points to this use case being fulfilled.
Watch this space.
That's interesting. I always thought this case would be exclusively developed in poorer countries first. Do you know what triggered this in the UK? Or was it just a simple realisation that blockchain could really be a better way to do things?
Without divulging too much detail as I don't have my notes to hand it was primarily the cost savings. The UK is still using hugely manual processes and processing. I'll add further info once I'm home.
coindesk.com/uk-land-registry-plan...
The blockchain can also enable new kinds of games:
CryptoKitties is a game, where you breed and trade kittens. Each one is unique and its ancestry can be determined via the blockchain.
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I feel like, for any application of the technology, there needs to be widespread interest and not targeted usage. With a small number of parties interested in processing transactions, you'd likely end up with one entity with too large of a share to make the system trust-able.
I haven't heard anything about that French management school, but "Marseille-Management-School-Coin"(TM) sounds like something only that French Management School would be interested in processing transactions for. You end up taking their word on it - which you would otherwise so using blockchain doesn't provide any benefits and is just a gimmick.
What you'd need is a large number of schools processing transactions for DiplomaCoin(TM), which then guarantees trust to a degree larger than any one (or two) of the entities could achieve alone.
And then, you have scaling to worry about. What is super annoying about this use case is that schools have a large number of students all graduating simultaneously 3 times per year (end of fall, spring, summer semesters). So there's the concern of overloading the system at those times.
And it sounds like a lot of the examples have the same problem of a single or very few parties interested in processing transactions -> blockchain is only a gimmick for these examples.
I think inter-bank lending would be a good use, lots of interested parties, not too many transactions.
EDIT: Looked up the number of students who graduate per year, it's 3.5 million. If we assume the 8 transactions/second standard then it would only take 5 days to process those. I think that's reasonable - although I'm not sure what universities could achieve in terms of transactions/second.
EDIT2: ~3.5 million/year for US schools alone, for all associates/bachelors/masters/doctoral.
I disagree with your ideas on cryptocurrency. Having a native token in a blockchain to reward miners for both: a) processing transactions b) safeguarding against double spends are absolutely crucial. A "blockchain" amongst 12 private banks, is no more than a shared central database, except the fact that they put it on-chain is going to make it wayyyyy less efficient. You can find more here: ftalphaville.ft.com/2018/05/02/152...
Very nice article!! Thanks for sharing
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