The Added Value Of The Blockchain And Cryptocurrency
With all of the media attention for cryptocurrency and blockchain projects, people want to know about the added value.
Is it just an investment? And what can the blockchain technology be used for?
In this article, we dive into the use of cryptocurrency and blockchain.
Cryptocurrency
With cryptocurrency, we have a lot of skeptics who claim that it is all just a hype or even a bubble about to burst.
On the other side, we have a group of fanatics. Often young tech-savvy millennials who belong to the group of believers.
But Who Is Right?
A lot of the skeptics claim it is just hype because the price has been halved compared to the all-time high in January of 2018, where the price of one bitcoin reached $20.000,-.
During that period a lot of altcoins had tripled or even quadrupled in price as well.
At the moment of writing the price of one whole bitcoin is $10.400,- and most altcoins have lost over 50% of their value compared to January 2018.
If you just read these last few sentences, you would say that it was all nothing more than a bubble and a hype, right?
However, when we look at the bigger picture, we still see an increase of 7.369% compared to 2013. (Yes, seven-thousand percent.)
So did we experience a short bitcoin ‘hype’?
Looking at the last two years only, you could say that we experienced a short ‘hype’ or a so-called bubble.
But, when we look at the total picture of the last six years, we see a massive increase with one short spike/drop.
Blockchain Technology
A lot of people forget about the technology behind the bitcoin and other cryptocurrencies; blockchain.
The whole blockchain ecosystem is what made bitcoin attractive in the first place.
It created a decentralized ecosystem and made a financial system without any banks possible.
If you don’t know about blockchain I will give you a very (very!) short explanation of what it is.
A blockchain is a chain of blocks with data.
The Bitcoin blockchain is filled with transactional data in these blocks, just a giant order book of transactions that have been made.
Data is stored decentralized on a blockchain, in order of when that data was added. This means that there is no central party in between, like a bank.
Because the data cannot be modified or manipulated without the consent of the entire network, the information on the blockchain can be assumed as the truth.
Blockchain In The Corporate World
A number of the largest international companies have invested hundreds of millions of dollars in blockchain applications over the last few years.
Amazon launched AWS Blockchain Templates a few months ago. An online service that makes it easy for companies to get started with blockchain, without having to build their own network.
IBM is working on software that maps entire logistics processes.
Spotify wants to use blockchain to manage copyright and Bosch is working on microtransactions within the Internet Of Things via cryptocurrency.
This shows that the technology behind cryptocurrency definitely has a future outside of the currencies itself.
Blockchain is used or could be used, in a lot of different industries.
Below we have listed a few of these industries.
Banking
When people think about blockchain, they usually think about bitcoin and a technology that was made to disrupt the current financial system.
The truth is a little different, the blockchain was originally created for the bitcoin to make transactions without a central party possible. But the intent of the bitcoin was to create a form of digital currency that could exist next to the current financial system.
Banks were very skeptical about bitcoin and blockchain at first and went as far as blocking accounts of customers who did anything crypto or blockchain-related.
Recently we are seeing some changes o
Recently there have been some changes regarding this subject since banks seem to invest in blockchain technology now.
UK-based bank Barclays and the Swiss bank UBS are both experimenting with the technology to speed up their back-office functions.
According to research, using blockchain technology could save the banks up to $20 billion in middleman costs.
Blockchain company Ripple (the same as from XRP) partnered with multiple financial institutions to improve the efficiency and costs of cross-border transactions.
Western Union and Santander are amongst these institutions as well.
Cross-border transactions take very long to process and are expensive.
With the blockchain technology, this process can be sped up and save a lot of time, and money.
Messaging Applications
Telegram
Telegram, one of the most used messaging apps worldwide, is developing its own blockchain-based platform TON (which stands for Telegram open network).
With TON, users will be able to process payments, store files and browse the uncensored internet.
They raised a stunning $1,7 billion dollars from investors to develop their platform which is expected to launch in the near future (Q3 2019).
Ally
Ally, a blockchain-powered communication app developed by Skrumble Network also brings an alternative to our current communication system.
We have witnessed incredible innovation built on the back of centralized community systems like Facebook, Telegram, Uber, and Amazon.
But at the same time, we have become aware of the downsides of these centralized systems. Data breaches, privacy scandals, hacks, and even state-sponsored attacks.
Ally brings an alternative that can ensure privacy, security, and freedom of communication for all. Read more about Ally here.
Gaming
The gaming industry has been comfortable with forms of digital currencies for years.
In Fortnite, you buy new clothes for your character with v-bucks, in FIFA you buy a new player with FUT Coins.
Cryptocurrency and blockchain would be nothing more than a natural evolution of an existing concept.
We see an increase in the popularity of esports in the last years. Esports is one of the fastest-growing sports out there.
Gamers and members of the gaming community, in general, tend to be more tech-savvy than other parts of society.
This makes it the perfect testing ground to try out new functionalities with the blockchain technology.
Multiplayer systems, in-game purchases, and tokens could all take advantage of blockchain functionalities.
Voting Systems
In the past we have had many elections that have been associated with fraud, miscounting and other kinds of disturbances.
By capturing votes in the blockchain, both governments and citizens have a verifiable audit trail they can follow.
This would ensure that votes are not manipulated, changed or removed.
Startup Agora has build a voting system on the blockchain.
This makes the voting process transparent and publicly verifiable.
Another interesting statement they made is that it would eliminate violence caused by questionable results.
Healthcare
Healthcare institutions handle a lot of privacy-sensitive data.
These institutions have to share this data across platforms.
Data sharing collaborations between these institutions could become a lot easier, safer and faster with blockchain technology.
Philips Healthcare has partnered with the Gem health network and Tierion.
Logistics / Supply chain management
Supply chain management is one of the most important aspects of logistics.
The supply chain and the blockchain have a lot of similarities.
Every step of the supply chain can be seen as a transaction node.
With every step, products move along from the starting point to the final deployment.
During this whole process, every step can be documented in a permanent decentralized record.
This saves a lot of administrative work, time, human errors and eventually a lot of costs.
What Will The Future Bring For Blockchain And Cryptocurrencies?
Today, the American and European economies are enjoying their longest bull run ever.
But, all good things come to an end eventually.
When that happens there is a great chance that blockchain and cryptocurrency will gain the interest of investors.
What governments will do with cryptocurrency remains a question for now.
Facebook is experiencing resistance from a lot of governments with their Libra project.
Other countries acknowledge they can’t ban cryptocurrency at this stage and are doing things to regulate it.
Will we work towards a future where cryptocurrencies replace the fiat currencies? Who knows, but we probably won’t see that happen in the near future.
While no one exactly knows what the future will bring, I think that we will see the blockchain technology being adopted by more and more industries.
Have a look at this interesting article, where French politician Bruno Le Maire gets asked about the blockchain technology!
