5 Potential Use Cases for Blockchain
What makes blockchain so great
First, let's think of what makes blockchain stand out and contributes to its success. There are three main advantages, and it's enough for blockchain to take the market by storm.
A few months ago, on the 4th of October 2021, Facebook blacked out. The app was dead for a while, and millions of people frantically switched to other social media. These things don't happen when something is decentralized - like blockchain. All code here is not based on the bunch of servers which are the single point of failure.
Decentralization ensures that the whole organization stays up and functioning even if a node dies. It also enables data recovery anytime needed, and the dispersion of assets helps keep a consistent delivery of services.
And, by the way, thanks to that (and more), it gives you more options to protect the network from hacks.That leads us to our next conclusion: the blockchain network is secure.
In practice, blockchain enables many possibilities to ensure security, unlike centralized systems that can be directly hacked easily. After all, there are always people who have direct access to databases. Or they keep a password on a sticky note on their monitor.
Theoretically, it is possiblewould take a “51% attack” to crack a blockchain network. One way to break Bitcoin's "proof of work" consensus algorithm in order to re-write past transactions is the so-called "51% attack”. So, to put it simply, someone suddenly would have to create an entire mining infrastructure that has the power of half the network. With Bitcoin actually consuming as much energy as Switzerland, it's hard to imagine a fortress that big. Again, to launch such an attack, someone would need to mobilize more than half of the network's decision power. And that's practically impossible.
Transparency is not a must in a blockchain network. But still, all the best-known networks, e.g., Ethereum, are transparent. Thanks to that, each transaction can be viewed in real-time and monitored. So any place where funds are exchanged, and there is potential for fraud and corruption is scrutinized by the whole community - the blockchain network is public.
Let's think about this example: public money is to be given to some politicians for distribution to, e.g., cultural institutions. If there is a pool of money to be put to a specific purpose, the funds need to be fairly distributed. These kinds of situations open the door to corruption, and you never really know for sure what's going on. But if such processes are on the blockchain, they are public, available to everyone - the blockchain acts as a watchdog here.
#1 Mysterious NFT - not as sophisticated as it seems
NFT is nothing revolutionary - they existed from the smart contracts' very beginning.
When you have this non-fungible token, you can transfer a value other than monetary - like property rights. For now, the tokens are digital, but they may turn very physical in the future. So why not register land on NFT?
NFT is now widely used as a way for artists to manage copyrights and sell ownership of their works. With the upcoming metaverse, buying earrings for your avatar using NFT objects that are genuinely yours seems like a realistic vision. And this takes us to the very real next big thing in blockchain tech - NFT for gaming.
Pimp up my game
Gaming is the next big thing in the crypto world. Any in-game token earning may be spent for your benefit and fun. If someone spends a lot of time playing a game, it would be nice if it had some material value, wouldn't it?
Of course, this is not an entirely new idea. However, having entire games based on NFT makes the scale much bigger.
#2 Elections and insurance - how to ensure security if institutions do not provide it
Since the blockchain network is decentralized, no entity or institution controls it. The network essentially controls itself and is under the constant observation of all users. The DAO, which stands for Decentralized Autonomous Organization, connects the network's users. To make decisions vital for the network, the users have to vote. So here comes a blockchain-based foolproof voting system ready to be used... by whom?
Speculation about which country influenced the election in another is rife. Voting is not always clean, especially in countries where public confidence in institutions is deservedly low.
Thanks to the blockchain network, the citizens of such countries could secure fair elections for themselves - using blockchain technology (and a few smart people to put it to work).
However, the adoption of such a form of civic control would certainly require some maturity from society. Therefore, it seems that only progressive countries, convinced of the importance of fair elections, will consider such solutions.
Blockchain works wherever transparency and honesty are needed - they are at the heart of its functioning. So perhaps, instead of recognizing bitcoin as the country's official currency, it is worth investing in a blockchain network that ensures political honesty?
#3 What the oracle says about smart contracts and why there are no taxis on the blockchain so far
There are many extremely attractive blockchain use cases, the development of which is blocked by an evil oracle. Let's explain this with an example.
Theoretically, the Uber concept could be transferred to blockchain-based smart contracts. However, in the smart contract, you have info that someone is getting paid for something, but there is no way to verify that it has happened. And this is what we call the oracle problem.
Imagine the times when things go wrong. After all, there is an organization in the real Uber that accepts complaints. How to do this if there is no central customer support?
Uber on the blockchain would be cheaper, and because the organization would not represent it (and get paid for that), the funds would go directly to the driver. However, how to verify that everything went as it stands in the smart contract? For example, did the driver take a passenger in the car? Did the passenger get out after arriving at their destination? For now, the blockchain remains helpless in that matter.
Insurance that won't let you down
Actually, some use cases based on smart contracts are doable. It is much easier to control the smart contract execution if many data sources confirm that its conditions are fulfilled.
For example, you can buy weather insurance based on blockchain technology. A simple smart contract: if there is no weather and the farmer does not earn money, they will receive the insurance money.
However, how do you verify that the weather indeed was terrible? You just need to download data from many weather services, and you will get confirmed, specific information that cannot be falsified. The farmer is paid without going to the courts, skirmishing with the insurer, and losing his nerves.
In this use case, data decentralization is the key. The more sources, the greater the chance of getting to the truth. One site can be hacked, but a dozen or a thousand - not really.
Several pioneering companies operating in blockchain are focusing on decentralized data. A great example is Chainlink, whose CEO Sergey Nazarov explicitly says that the organization's goal is to obtain a definitive truth from reliable data. See his talk on this topic.
#4 Biotech and healthcare - private blockchain networks
Private healthcare also uses blockchain technology. This industry creates its own private networks to ensure a smooth and reliable flow of patient data between medical facilities.
On the side of medical and biological sciences, a use case in which blockchain certainly proves helpful is scientific data sharing. It is challenging to securely transfer access to sensitive databases with strictly guarded know-how and patents. Thanks to blockchain, this matter has also been significantly simplified.
#5 Inherit a fortune from grandpa... in cryptocurrency?
It is easy to imagine a smart contract that holds your cryptocurrency assets and is programmed to transfer these funds to another account if you do not answer for a specific period.
Such a deposit for the future of a grandchild or another close individual is secure and reliable. If you die, nobody can use your crypto anymore. Unless you leave it to your family - if so, they will have access to the stored funds. When, how much, and to whom... All is included in the smart contract.
And with the regulation of the NFT ownership issue, perhaps you will even be able to bequeath a house, and not only in the metaverse?
The future is just around the corner
The revolutionary and ingeniously simple idea that brought us blockchain technology is gaining more and more attention. Use cases are bursting into new industries, and we keep our fingers crossed for further advances in this technology.