10 Real World Use Cases for Ethereum
Are you wondering what some real-world use cases for Ethereum are? Then you’re at the right place.
Ethereum is a blockchain platform that enables anyone to run decentralized and open applications on it. This platform is fueled by “Ether”, the currency used to pay miners for verifying transactions on the blockchain.
Ethereum’s immutability and transparency make it an ideal platform for products and applications that need to run on an open network. As we will explore throughout this article, these applications range from finance apps to health and politics.
Although Ethereum is often criticized for its scalability limitations, at the time of writing it is still by far the most popular platform for decentralized applications. Although more scalable protocols like EOS and Tron have taken away a portion of Ethereum’s market share, none of them are even close in terms of working real-world use cases.
Decentralized finance (DeFi)
One of the most promising real-world use cases for Ethereum is decentralized finance applications, also often abbreviated as “DeFi”. This includes smart contract-powered loans, minting of stablecoins, and decentralized exchanges. One notable project in this category is “MakerDAO”, which through the use of elaborate Ethereum smart contracts has enabled the creation of a stablecoin (DAI) that is backed by Ether and is always worth $1.
Digital identity
The way we identify ourselves has barely changed in the past 5 decades. We still use passports, that are still made of paper, that we still need to carry around everywhere. One of the main reasons why we have not shifted to a digital system yet is that it's hard for Governments to check the authenticity of an online document… Until now.
Ethereum enables the verification of data in an open and transparent way, which means that it could also be used to pioneer the creation of a digital identification system. Companies like Civic have realized this potential early on and are already working on making this happen.
Tokenizing real-world assets
Many expect the security token market to be a multi-trillion opportunity, and Ethereum could prove to be one of the platforms enabling this shift. In essence, security tokens are a blockchain-based representation of real-world assets like stocks, precious metals, real estate, and more. By tokenizing these assets on a blockchain, issuers can transfer and transact in them much easier than if they only had a contractual representation on paper.
One of the projects turning asset tokenization into a powerful use case of Ethereum is the blockchain start-up PolyMath, which after raising $59 Million in an ICO is now building one of the first compliant platforms to tokenize real-world assets on the Ethereum blockchain.
Health applications
Ethereum will completely revolutionize the healthcare system. All hospitals around the world can store, access, and share their patient’s records. This is a key factor in developing new vaccines for viral outbreaks, or even preventing them firsthand. You can go to a doctor in Thailand for a checkup when you are on holiday and to a hospital in New York when you are back home again, and both will have the same information about you.
But that’s not all. Remember the whole wearables craze a couple of years ago? Well, like it or not, those devices are here to stay. Now imagine that the data your smartwatch records every day are automatically shared with every hospital in the world. This way, patterns could be found in medical conditions like heart attacks or strokes, and you could be warned even before it happens. Ethereum will make this possible, and possibly save YOUR life one day.
Security infrastructure
The fact that there is no central server for a hacker to attack makes it a lot harder to break into, for example, a website and steal your personal information.
Payments
The world’s economy is based on transactions… And Ethereum is going to change them forever. On Ethereum, so-called “smart contracts” can be made. These make it possible to exchange anything of value, completely risk-free. Instead of creating an old-school agreement on paper, the transaction is recorded in computer code.
So imagine that instead of buying a photo from a platform like Shutterstock, you buy it directly from the photographer and initiate a contract with him/ her to buy the photo. This is made possible by the “If This Then That” (IFTTT) logic built deeply into Ethereum’s system.
So for example: If the buyer puts the money in an escrow account, the photo will be downloaded.
Privacy from third parties
Do you know that search engine that most of the world’s internet users use every single day? Yeah, the one with the capital “G”. Well, surprise surprise, the company collects your personal information and sells it to advertisers. And makes billions in profit every year in the process. Ethereum’s blockchain technology would make this data collection impossible.
Actually, it does not make it impossible (Nothing is impossible :P), but it logs every time the search engine uses your data and makes those logs publicly available. Therefore, large corporations will have to be a lot more careful with what they do with our data if they don’t want their brand image to suffer.
Politics
The fact that you are reading this post means that you are a well-educated citizen, and you are very likely more intelligent than the average Joe. Therefore, it is also very likely that once every couple of years (depending on what country you live in), you will register your vote for the political party you think should lead your country.
Although we are told that we live in a democracy, it wouldn’t be the first time that the results of the polls are altered…
This would be physically impossible with the implementation of ethereum since nobody has complete control over the network and every change is logged and publicly visible. Therefore, ethereum will ensure a more transparent and fair democracy.
Storing data
Companies like Dropbox or Microsoft store huge amounts of data in so-called server farms. A server farm is basically a building where hundreds of servers are that are used to store information. The problem with server farms is that the company concentrates a large fraction of its storage capacity on a single location. Therefore, the company can suffer substantial losses if it is destroyed by a natural disaster or a terrorist attack.
The solution is a decentralized storage facility. In that case, information is not stored in a couple of server farms in the US, but in hundreds (or even thousands!) of data centers all around the world. Until now this has not been possible because it is a big technological challenge to build a network that connects all those servers safely and enables a fast data transfer.
However, Ethereum is very likely to be the solution to this problem because its blockchain technology can be used to encrypt and quickly transfer data between millions of servers.
Initial Coin Offerings
Initial Coin Offerings, also referred to as ICOs or Token Sales, is a method of funding by which early-stage start-ups generate “tokens” and sell them in exchange for Ether. These tokens are supposed to have a utility in the application the start-up is building and individuals purchase them in order to make use of them in the application, or sometimes also for purely speculative purposes.
One of the largest Ethereum ICOs was Bancor which raised $153 Million in just 3 hours by selling its BNT token to the public.
