The Role of Decentralization in Developing Business
Decentralization might have become synonymous with both cryptocurrencies and blockchain, but they are not the same thing and don’t always overlap.
A blockchain is the underpinning technology of cryptocurrencies and decentralized apps (DApps), but it is not necessarily decentralized: private blockchains are cryptographically secure, but they are limited to who can interact with them, whereas a true DApp can be accessed by any user that is part of its application.
The four defining characteristics of a DApp are:
- Open Source — no one autonomous user or collective is responsible for its application, but it is instead governed by a consensus of its users. Its underlying code is also available (for suggestions, identifying weaknesses, and to adapt).
- Decentralized — all transactions are recorded on a public blockchain that all users have access to.
- Incentivized — users who work to validate updates to the blockchain should be rewarded with cryptographic tokens.
- Protocol — there is some kind of protocol in place to cryptographically secure new blocks in the chain, typically Proof of Work or Proof of Stake.
While cryptocurrencies remain the perhaps best-known use of a DApp, their popularity continues to expand due to their inherent security: Records cannot be hacked, and there is no central point of failure. So, how are DApps creating new roles in commerce? We are going to see a lot more focus on developers that can build entire businesses from even a single DApp.
Startups are thriving with decentralized applications. Accretia has stripped traditional banking of its buildings and staff by bringing the bank to users’ own homes. Stressed as owners rather than customers, users are part of an equal platform that eliminates the mistrust of an autonomous corporation holding and sharing out finances.
La’Zooz has introduced its own version of Uber, which sees drivers paid with tokens per mile: All that’s needed is a spare seat in a car, and a La’Zooz driver is part of an exchange of travel for tokens.
Although we have seen the internet dominate user and business interactions, we could soon see a growing percentage of the industry becoming purely digital. From the token used to purchase to the product itself, from storage to delivery, the physical warehouses, display stores, and offices might soon fade away.
No longer limited to updating CDs to music files and books to ebooks, we will see companies work to further digitize our lives. Our digital data is already being stored on our phones and computers, and companies will hurry to streamline the physical and secure it on a blockchain.
As trade becomes ever more international, clearing money abroad can be time-consuming and attract large fees. Cryptocurrencies eliminate the fees and time taken to move money internationally, if only in their own currency, and the world’s banks are already experimenting with blockchain technology to move fiat money beyond borders with less hassle.
DApps, however, offer even more flexibility. Take TenX, for example, which harnesses multiple currencies, both fiat and crypto, on one physical card that can be used all over the world. There are no conversion fees, and payment can be made either through the card or by withdrawing the local currency directly from an ATM.
With actual and allegations “fake news” causing turmoil recently, fact-checking is becoming more and more a priority.
The Decentralized News Network rewards quality and truthful writing, by paying writers on the quality rather than the sensationalism of their work and incentivizing fact-checkers to review pieces, making it extremely difficult for biased or poorly sourced content to escape moderation. (4) Rather than “click-bait” and outrage-fuelled headlines that gather clicks and shares, factual articles will be disseminated amongst its user base.
With consumers becoming more comfortable in sharing their data if it brings them results that are relevant, personalization is the next big push commerce. Multi-platform DApps such as Shopin connect businesses with shoppers’ data across multiple sites to increase personalization for consumers and marketers: Targeted prompts are useful for consumers and result in better conversions for the company.
Development of DApps for the healthcare sector will consolidate data protection and privacy issues with data exchange for the benefit of the patient and further research. Data can be exchanged across one network across a range of uses, including administration, public health protection, patient information, disease prevention, demographic data, and additional research. Providers will be looking into how to unite a wide range of services under one decentralized usage.
The Main Roles
Web developers, coders, and programmers are working hard to bring the next big DApp to their industry, whether that’s as a startup business or existing companies working to bring the benefits of decentralized blockchains to their business.