To inspire new ideas Block42 P-rep decided to create a series of blog posts under the name of “ICON for thought” that provides an interesting point of view on a subject of the ICON network.
This issue will correlate with the previous one so make sure you read that one and we will look at the possible use cases of blockchain technology.
We believe blockchain will be used in a lot of different fields but at the time of writing an average investor is more focused on the price of a cryptocurrency than how it will be used, this might be connected with some problems that blockchain has to overcome before it can truly be adopted by the general public. It is hard for an individual to grasp at all the possibilities that this technology provides, especially when the market is saturated with projects that do not think about the solution enough and will not be able to provide a real-world application to the blockchain.
Blockchain is very often associated with Bitcoin as it is the first case of a blockchain and that follows a lot of incorrect assumptions.
Blockchain doesn’t need to have a cryptocurrency and while most of the cryptocurrency prices are still connected to the Bitcoin price that does not need to be the case.
Large energy consumption and being cost inefficient due to the computing power that is needed for PoW systems, which is used by Bitcoin but in enterprise blockchains this is not a problem and even in public blockchains there are new solutions to this like PoS consensus algorithm.
Do you want to make sure a certain is processed when the right conditions are met? Well, smart contracts allow you exactly that. Smart contracts allow a set up of an agreement without a middleman where they define rules and penalties of it as well as automatically enforce those obligations. This provides numerous use cases and because blockchain is immutable and doesn’t use a middleman it is exactly what it is needed for deployment of smart contracts.
This is the most obvious one since it was already achieved from the start. Bitcoin is a peer to peer currency and blockchain is exactly what is needed to achieve this. If we want to send some currency directly from one person to the other it is necessary to have a trustless system without a third party involved. A third party doesn’t need to take care of your account so you can have as many as you want for free and the transaction fees are lower than in centralized systems.
Funding for any project can be much more transparent when people can see the allocation of the funds.
For example, charity organizations can receive donations in cryptocurrencies and all transfers of the funds should be backed up by a report stating how did they allocate the funds. Such transparency could allow the donators to see that their funds are used in a meaningful way.
Another way of funding is also the possibility of security token offerings (STO). We had a flood of ICOs in 2017 and we’ve seen that many of them failed to deliver the promised and a lot of investors losing their money. In an ICO an investor has limited rights on investments while STOs are required to legally register their products and services with their national regulators. This also reduces the costs of investments as it removes the need for brokers.
Giving control of digital identity back to the user is exciting for the ICON network as it is one of the features it wants to provide with MyID. Instead of giving consent to use our personal data to service providers that they can access at any time, users can store their digital identity data in an encrypted digital hub and access it when needed. This reduces the possibility of a provider overreaching into a consumer’s digital identity.
How do you know when you vote that the central authority that is responsible for counting the votes actually counts your vote? When every vote is recorded on a blockchain and it can be seen by anyone it becomes harder to rig the voting outcome as every vote is counted. When you combine this with a secure digital identity for a blockchain it becomes especially useful as you can vote from the comfort of your home with the system being able to confirm that you are eligible to vote without making the information of the voter public but providing vote allocation for everyone to see.
Internet of things (IoT)
Information that devices connected to the IoT provide should be delivered in a secure manner without anyone controlling or tampering with it. Allowing them to communicate through blockchain allows them to communicate directly while blockchain removes the possibility of an error by a central entity. The applications of IoT in the future like smart homes, smart cities, self-driving cars and many more will definitely need such a trustless system.
A lot of progress has already been made to provide a trackable record of the items that we purchase. Objects being scanned at every step that they make and the chip is connected even to the opening mechanism and the blockchain registers the time when the seal is broken so a user could check exactly what has happened to the product he holds in his hands. Blockchain provides transparency and once information is input on it there is no way that it could be altered.
Making part of the data anonymous can be really beneficial when a party would not like to be leak information prior to consensus. This can be done by providing parts of data to multiple different entities that together provide a solution or making part of data anonymous until a cooperation possibility has been found between two entities. In a similar way, data can be monetized by providing a part of data until a payment is made, afterward the all the data becomes available. Computer over encrypted data is an interesting solution when an entity needs to have sensitive data processed and if you are interested in how that can be done you can read more here.
Not only does it reduce the amount of paper but having records saved on a blockchain removes the possibility of the data being tampered with. All the previous data and alterations to it can be seen by all the parties involved in the transaction. For example, a potential buyer will be able to see the number of previous owners.
Blockchain being able to collect data may provide a number of things for entities that want to advertise. Providing immutable metrics, advertising smart contracts, transparent media buying and selling, accurate audience targeting, reducing ad fraud, rewarding users for viewing ads and many more use cases can be presented for advertising. All of this also helps the recipients of advertisements with better user experience and a potential possibility of being rewarded.
Do you think these are all of the applications for blockchain?
Blockchain has it’s bad reputation because cryptocurrencies are an investment and similar to when trading stocks you need to know how to trade to be able to profit from that. A lot of people jumped on the cryptocurrency wagon when there was a lot of hype and lost their money but blockchain technology is nothing more than a new way of storing data however it can be applied in so many various sectors with many use cases and we have bearly scratched the surface here. With the possibility of data traveling from one location to another in a mere few seconds, data is becoming more and more important. And with so much data there is also a lot of incorrect or fake data and blockchain can provide more transparency and immutability for it, which makes it easier for users to identify it as such.
When it comes to automatization trusted data will play an important role in the future so that everything receives accurate information that it needs to function. Better information allows better decision making whether it is automated or not and blockchain can provide trustful information to collaboration between multiple entities.
Data handling plays an important role in human history to provide new information that allows other people to either add a new perspective to the matter or to make better decisions because they were informed enough. Computers and the internet have done wonderous for the speed and amount of data that can be shared and blockchain is just another step in improving data handling.
If you have you have any interesting topics you would like us to present in ICON for thought series let us know in our telegram group.