We’ve talked about the basics of blockchain and blockchain architecture. But what can you use blockchain for? Blockchain is a distributed public ledger for recording transactions. Blockchain’s features include decentralization, transparency, security, and immutability. Ultimately, users must trust in blockchain technology. While blockchains are most known for being used for cryptocurrencies, what are some other uses?
BLOCKCHAIN USES
- Money Transfer — One of the original innovations of blockchain technology was creating a mechanism to transfer money or value in a decentralized way. Cryptocurrencies like bitcoin allow unrestricted cross-border payments and remittances faster and cheaper than using traditional money transfer services or banks. In addition, cryptocurrencies opened up new avenues for international commerce previously nonexistent. In June 2021, El Salvador became the first country to adopt a cryptocurrency as legal tender.
- DeFi — DeFi, or decentralized finance, uses smart contracts, which are agreements enforced by code, to create complex peer-to-peer financial services on public blockchains without intermediaries. Genius Yield, for example, is a DeFi project that provides a decentralized exchange, like a stock exchange, where anyone can trade Cardano native tokens between each other without any central oversight. Other DeFi protocols include lending, insurance, and data storage. Oftentimes, these services delivered using the blockchain have cheaper costs than banks or insurance companies that offer similar services.
- Digital Identity — Identity fraud has remained a persistent issue around the world. However, blockchain technology supports for the creation of decentralized digital identities, or DIDs, which can’t be replicated or tampered with due to the security of the blockchain. In addition to people having verifiable identities, other things that can be linked to a DID include school grades, diplomas or degrees, and work credentials. Having educational records that can be verified will help people get jobs and lower the burden potential employees have in proving their credentials are factual. DIDs can also be linked to bank accounts or bill payments, allowing someone to build credit for loans in the future. One of the biggest deployments of blockchain using DIDs was announced with Input Output’s deal with the Ethiopian Government to create a national, blockchain-based ID system for 5 million students.
- Securing Property Rights — In many countries, property rights remain elusive. The government, corrupt officials, or companies can take property or land, leaving victims with no recourse or way to prove they owned the land. Having land titles or deeds that signify ownership of a property on the blockchain is immutable and can’t be altered.
- Data Storage — Instead of storing your data to centralized cloud computing platforms like Amazon Web Services who have full control over your data, you could use decentralized storage solutions like Iagon. Iagon is creating a decentralized storage network where each user’s data is encrypted. Options like Iagon would be great for companies or people who have information they want stored that is proprietary or private.
- Liquidity of illiquid assets — To sell a house or artwork, there is typically an arduous process to undertake. What if you could sell your house online using distributed ledger technology and have the ownership and transfer of an asset verified and secured by the blockchain? Platforms like Ledgity will provide users the ability to transact unlisted assets like real estate or artwork. Using the blockchain would increase liquidity of your asset and could cut down on paperwork needed to transfer the asset for a sale.
- Medical Health Records — Imagine traveling to another country getting sick and going to the hospital, but the doctor and medical staff don’t have any information about your medical history and can’t get the data due to privacy laws. A blockchain solution could have your medical records linked to your DID. Then the medical records could only be seen by doctors through your permission and the verification of the doctor. Due to the speed that this verification can happen through the blockchain, global healthcare and the efficiency of treatments could increase significantly.
- Supply chain management — Tracking products or materials is a cumbersome experience, especially when dealing with different companies that have limited visibility on their partners’ inventory. Disruptions in production or even wasted labor can happen if a product is delayed and other companies are waiting for a product that won’t be transported to them at the previous planned time. If all companies used an interoperable blockchain solution, they could synchronize their logistics data and tracking of shipments, leading to more efficient operations.
- Digital Voting — In many countries there is election fraud or a lack of public trust in elections. With DIDs and the blockchain, voting can take place on a public ledger where all votes are publicly listed. Voters could then verify that their vote has been recorded, and hasn’t been altered. With this system, the public wouldn’t have to trust the government to correctly count the votes because an immutable record of each vote would be publicly available for anyone to verify.
There are many ways blockchain can be used to make tasks more efficient or create new technologies such as cryptocurrencies. What other uses do you think blockchain can be used for?