We've heard a lot about blockchain technology in recent times. Blockchain is a critical part of the bitcoin peer-to-peer payment system and its ledger has helped improve transparency for transactions. But what else can this technology do?
There have been a lot of predictions as to the next great use of blockchain tech. Some have even said that blockchain could be the solution to gun control in the United States. So what else could the blockchain be used for? We went straight to the experts to find out.
"The most promising application of blockchain that is currently in development is digital identity. In the past few years, we have seen a crisis of privacy and trust in the digital and online environment, with events such as the Facebook and Cambridge Analytica scandal, Equifax breach, and foreign interference via social media in the 2016 presidential election. Legislation like the EU’s GDPR demonstrate the people want more control and ownership over their personal data and digital identities.
Much like blockchain allowed for the first decentralized, user-owned digital money, the technology will also allow for the first self-sovereign digital identities. The term “self-sovereign identity” has been coined to describe the ability for a blockchain-based identity system to give users ownership over their digital selves and personal data. Existing models of digital identity rely on centralized authorities, like Google or Facebook, that manage identities on behalf of their users and can therefore take unilateral action, like locking someone out of their account. If you use Google to login to applications and websites, a simple mistake or intentional censorship by Google can suddenly leave you deprived of the identity you use online.
Blockchain can provide a decentralized infrastructure for digital identity. Only the identity’s owner would have control over the use of their identity, with no need to trust any third party when they wish to prove who they are online. Giving users sovereignty over their digital identities is the first step in returning data ownership to the individual and creating a more user-centric Internet."
Food and Beverage Supply Chain
"I think it will be in the production and distribution of food and beverage products in order to ensure quality, safety and sustainability. A number of high profile applications of blockchain have been in this industry. IBM Food Trust was being used by 10 large-sized food companies such as Nestle, Unilever, Walmart. As of June 2018, the system stored data related to 1 million items in about 50 food categories including Nestlé canned pumpkin, Driscoll’s strawberries and Tyson chicken thighs. As of July 2018, there were more than 350,000 food data transactions on the IBM Food Trust platform. In November 2018, IBM commercially launched its Food Trust. Companies of all sizes in the food industry supply chain can join the network for a subscription fee, which ranges from $100 to $10,000 a month. Carrefour signed an agreement with IBM to use the solution.
Some innovative applications for this sector have been launched by blockchain startups. For instance, Denver-based startup Bext360’s Bextmachine is a Coinstar-like device, which employs smart image recognition technology machine vision, artificial intelligence, IoT and blockchain to grade and track coffee beans. It takes a three-dimensional scan of each bean’s outer fruit. Each coffee bean is also provided a unique ID which can be used to track it throughout the life cycle. Wholesalers and roasters can learn about attributes that may produce certain tastes. They can make future sourcing decisions based on this.
Bextmachines analyze farmers’ coffee cherries and coffee parchment deposited at collection stations and sort them to assess the quality. Farmers that supply bigger and riper cherries are paid more. The Bextmachines link the output to cryptotokens, which represent the coffee’s value. New tokens are automatically created when the product passes through the supply chain. The values of tokens increase at each successive stage of the supply chain. The supply chain is transparent due to this step-by-step and detailed process. It makes sharing the value added among various supply chain participants fairer and easier."
-Dr. Nir Kshetri, Cybersecurity Author and Professor at University of North Carolina-Greensboro
"The next big space where blockchain technology will be implemented is voting. In the United States, which is supposedly the most advanced country in the world, it took us weeks to count voting totals in Florida for both a
governor’s and Senate race. How is it possible that we need to be recounting votes and are using paper ballots in the 21st century? There is no reason it should take weeks before a winner is declared. Not only is it the speed of tabulation, but it can eliminate fraud.
A blockchain is an immutable ledger, meaning the votes can never be changed and they can be tabulated in real time--not to mention it gives voters the ability to vote without going into their local school or government building, it gives them the ability to vote anywhere. In the 2016 presidential election, the US had voter participation of only 55 percent, which is stunningly low compared to other developed nations. We also see a number of voters in the US who are disenfranchised because they feel voting is ridden with voter fraud and their votes not being counted.
Blockchain has the power to make voting easier, safer, more accurate, and increase participation. This could potentially change the course of the US. I cannot think of a bigger use case than that."
"We believe that the next big use of blockchain technology is in the payments industry. The current credit card authorization and settlement system was designed in the 1970s, and it hasn’t been updated for today’s world. The technology is slow and dated, transactions are hard to track, fraud is rampant, and there are many steps and players involved when moving money internationally. International transactions take days, with multiple players each taking a fee. Dominated by banks that control and dictate fees, it only becomes more expensive to move money each year.
In the last year or so, merchants from a wide variety of industries began offering cryptocurrency payments, and the technology has come a long way in a short amount of time. Not only are merchants now able to accept payments in crypto online, but also in retail settings through the use of QR codes.
Cryptocurrency payments are a game-changer because it allows the 1.7 billion people who do not have access to a bank account to finally shop online. With crypto payments, all you need is a smartphone and an email address.
Additionally, mobile wallet usage will increase as smart phone purchases continue to rise. This will open the potential for a fully compatible crypto and credit card mobile wallet to be introduced. Imagine one wallet on your mobile device that stores your cryptocurrency and traditional currency. This would be a huge push into a cashless society."
Smart Business Contracts
"Imagine a health insurance claim that automatically pays out as soon as your hospital uploads proper documentation of your illness or surgery. In the same way a real estate deal can conclude once your bank electronically verifies the loan. Smart contract-based applications that immutably, transparently perform routine tasks (like closing on a house) may not only render title companies obsolete, but also represent a significant cost- and time-savings for everyone from loan originators to closing agents.
The days of PDFs and electronic signatures for documents are gone. For smart contract-based insurance, the chief technical challenge is how to bring off-chain events, such as accidents, major diagnoses, death, etc. into the contract. This is the Oracle problem, but fortunately there's a solution for it. “Smart Business Contracts" can automate many aspects of business interactions that are done by humans today, including insurance policies. For example:
- To manage customer identity and data privately and securely
- To store important financial records in a decentralized (and encrypted) network
- To reduce human error and make processes (such as dispute resolutions) much more efficient
The use case of blockchain 3.0 is analogous to automated escrow accounts in the real world. The smart business contracts allows strangers to build trust without centralized insurance companies. Driven by a greater number of individuals and organizations, blockchains are now better equipped to enable this type of economic progress."
dApps and Centralized Solutions
"What is the foundation of the blockchain technology? Two things:
- Ability to tokenize any assets.
- A database with unique rules on reading and recording of the database records (hence can't erase the records).
Applying these aspects in different configurations (decentralized and centralized solutions), we see two clear trends:
- Decentralized applications (dApps). For example, decentralized storage solutions, decentralize exchanges, decentralized prediction platforms, and other public sector solutions where the authority itself is a problem (due to privacy and trust issues) and is addressed by the blockchain on a fundamental level.
- Centralized solutions for enterprise sectors, which allow companies to tokenize the assets yet set the trust rules, so business parties can trust each other not just based on the brand name/personal relationship, but based on irreversible historical data stored in blockchain based databases and smart contracts. Think medical applications, banking sector, and overall B2B relationship-based business solutions.
As we move forward, dApps have a high potential to lower the authority's influence in the world and to democratize not only storage, trading, betting, but the election, bill passing, and other public affairs/services. As for the centralized solutions - it just getting started and we're yet to see the real market applications. If these two trends succeed then it'll be a golden age of the blockchain based technologies and cryptocurrencies too. If these two trends fail (too much regulation) then the blockchain will stay at the niche level or die out completely."
"Right now, it's clear to me that the next big use case for blockchain is Security Tokens. Security Token Offerings, or STOs, are investment vehicles that allow for the tokenization of real-world assets, such as real estate, stocks, bonds, intellectual property, fine art, bars of gold, stores of oil--you name it. Each token is backed by a fraction of an asset. As an example, in August 2018, the St. Regis Aspen hotel was successfully tokenized. Tokenization has the power to add greater liquidity to these markets by making these investment opportunities more accessible. Another example, instead of an average person investing in a $500k bar of gold bullion, they could invest ~$50 in 1 gram of a bar of gold.
STOs are similar to ICOs, or Initial Coin Offerings, which were hyped in 2017, but deflated in 2018 as the SEC and other global jurisdictions began to crack down with new regulations. The beauty of the ICO was that almost anyone could take advantage of those investment opportunities, not just accredited investors. I believe that STO is the new wave, adding regulation, security, and a real store of value to the token while taking advantage of all the positive qualities of ICOs.
Using blockchain to facilitate trades of stocks, bonds, and equity makes perfect sense to me. It adds greater transparency and ease of transactions to traditional finance markets, and allows for truly global markets that can be accessed 24/7. Based on my conversations with a few credible US securities lawyers, it's starting to become clear that within decades, all trading of this nature might run on blockchain."