Intro – blockchain use cases that enhance the technology’s potential
Blockchain might be a cryptocurrency enabler, but its real potential goes beyond digital coins. Viable blockchain use cases have proven that the distributed ledger technology can improve business processes on a number of levels. As an immutable, shared ledger for recording transaction history, Blockchain fosters a new generation of transactional applications that establish transparency, trust, and accountability to payments.
Finance is thought to be the first sector Blockchain could disrupt in proportion of 100%. However, just like with any new technology, adoption is slow as companies currently seek to better understand it before implementing it.
In layman’s terms, a Blockchain is just like a Google Spreadsheet. All users sharing the same sheet can edit it live and see changes made by others in real time without involving a third party. There’s also a record of all the changes made, and given that the document is stored in the Google Cloud, it can’t get lost. The Blockchain works similarly; it tracks transactions performed in a shared database where nobody can perform changes without getting the approval of everyone involved. The database doesn’t have a single location, which makes the records decentralized – verifiable, public, and immune to hacks.
This is exactly what makes Blockchain technology so powerful – its potential to transform operational processes as we know them by making them better, more transparent to the end user, and more secure. Whether financial or non-financial, all transactions made on the blockchain are kept honest without involving a third party entity to give an approval.
In this article we cover 7 of the most important use cases for Blockchain technology and how they could improve our daily lives.
Blockchain use case #1 – Prediction Market (Gnosis)
“Gnosis builds new market mechanisms to enable the distribution of resources – from assets to incentives, and information to ideas.”
The information revolution has triggered new ways for people to retrieve personal information about anything. But data usually lacks objectivity and context, and it demands tremendous effort to generate actionable information for daily use, especially in decision-making processes. Prediction markets are poised to become disruptive innovations in data science and capital markets. With the materialization of Blockchains such as Ethereum or Bitcoin (peer-to-peer computing technologies) exploring market-based forecasting at a scientific level can be huge.
Betting on the outcome of an event is one of the main characteristics of prediction markets (e.g. elections, sporting tournaments, assets, auction houses). However, by implementing Blockchain technology, prediction markets have viable chances of becoming more transparent and secure. Relocating prediction markets on Blockchain demands two major components: oracles and smart contracts. Smart contracts are in charge of the money, whereas the oracle provides information for the smart contracts, and it basically relayers the information.
Gnosis is a decentralized prediction market that aims to enable the fair distribution of resources. Built on Ethereum, the platform aims to be a next generation Blockchain protocol that enables smart contract usage. However, most prediction markets increase in potential when there’s a liquidity pool of information made available on a global scale.
The Gnosis mission is to develop an impartial aggregation of information to be able to quantify the future. By putting their idea on the Ethereum network, which is decentralized and permissionless, Gnosis is looking to “build a truly impartial exchange for information aggregation to quantify the future.”
The Gnosis prediction market platform could become a global liquidity hub for developers looking to build decentralized apps and create new predictive asset classes with multiples uses. In existing markets, Gnosis has viable chances of contributing to the creation of financial instruments to track commodity value and keep track of stock prices with increased efficiency and specificity than existing models.
Given that Gnosis is a permissionless, decentralized platform, it could become an easy way for developers to build DApps and use prediction markets to govern a DAO; predict climate change or even develop flight insurance apps with the Gnosis DevKit. Price discovery is yet another potential use case of Gnosis. With accurate prediction market insights, auction houses can save millions by using Gnosis to predict auction pricing and potential profit of the sellers.
Blockchain use case #2 – Madana (data analysis)
For years, platforms that store data and perform data analyses have failed to preserve user privacy. The people on Facebook, for example, are not in full control of the data they share; they are not rewarded in any way for the information they provide to keep the social giant performing and growing. Unauthorized data use (e.g. Cambridge Analytica case), breaches, and intensified surveillance raise serious questions, and increasingly more people are realizing that collecting and analyzing data is unethically done on most centralized platforms in different industries.
Blockchain-based project Madana enters the scene with a business model that aims to disrupt the way data is being gathered and used by big companies. The project is looking to put users back in control of the information they share online, rewarding them for their contribution, and becoming a “decentralized pool of information that benefits end users”.
Still in its early stages, Madana proposes an analysis market ecosystem powered by open data. The platform will run on smart contracts, enabling data buyers, producers, and providers to join a decentralized data marketplace that is completely anonymous, fair and private for everyone involved.
Madana has viable chances of providing real uses cases in data analysis. Implemented correctly, the business model could provide access to data only with the user’s permission. Several new approaches of the platform are: data security, a decentralized data marketplace for everyone, and direct incentivisation to all parties involved. As Madana advances in development, it could emerge as a viable solution to data-driven industries like the IoT ( Internet of Things), where the user controls the information at every stage of the product or data lifecycle.
With Madana, the IoT will be able to provide better user interface control and transparency, empowering them to gather knowledge about how their smart devices are actually being used (including what information is being shared, and how they communicate with each other).
Blockchain use case #3 – Ares (gaming)
What can more exciting that playing games online and having access to continuous parallel gaming universes? The distributed ledger at the core of Blockchain technology streamlines character and item use across a number of games via the smart contract system. Companies constantly struggle to stand above the competition, and set themselves apart by advertising unique user experiences. Active companies in the Blockchain realm have started providing benefits that go beyond games per se. Some of them are also looking to provide solutions to game developers, too.
Open source development and decentralized economic frameworks could provide pioneering tools and help developers touch new grounds in the gaming industry. There are over 2 billion active gamers spread across different platforms, technologies and genres around the globe. Over the years, gaming has morphed into an overwhelming hobby, and with a distributed ledger system in place, the developers could finally be fairly incentivized for their hard work.
Blockchain gaming network Ares is looking to disrupt the status quo of the gaming industry by creating a decentralized “all-in-one solution for social game creators”. One of the main goals of the project is to help solve existing pain points with Blockchain-based games. Most developers are still unfamiliar with the technology, making the process of testing and learning intense and challenging. To help them develop fully-functional games on the Blockchain, they need support in the form of a user-friendly platform to make the development process easier, more transparent, and secure.
With its all-in-one solution, Ares aims to break barriers with its complete suite that benefits gamers and developers alike. It will include three major components: Ares Suite for creators looking for an all-in-one development solution for cross-chain collaboration, Ares Arena for casual gaming engagement and Ares Connect to ease monetization and make games profitable intellectual property.
The Ares project could be a real use case for Blockchain technology in the gaming industry because it caters to real issues faced by gamers and developers today. Its aim is to encompass three core services into one scalable solution, and therefore create a user-friendly development suite where gaming is not just interesting, but also fair, transparent and secure. By developing and promoting a gaming community for gamers and developers, Ares is on the verge of building a complete Blockchain-based application ecosystem that lowers the costs involved with creating games on centralized game portals.
Blockchain use case #4 – Neufund (equity fundraising)
The global ICO market exceeded $6 billion in 2017, however many investors lost a lot of money due to ICO scams and ponzi schemes. When investors pour cash into an ICO, they can’t know for sure that the tokens they receive have genuine value. Everything is based on supposition and assumption that a certain Blockchain-based business model could revolutionize a certain industry following the successful completion of their initial coin offering. Listing tokens on crypto exchanges creates false hope, and investors often doubt that they will ever increase in value.
Blockchain-based equity fundraising platform Neufund enters the market with a new approach towards ICO investing. Co-founder and CEO of the platform, Zoe Adamovicz, highlights that “in venture capital, both startups and investors have an almost illiquid asset position – transaction costs in and out of a company are very high. Money flows slowly – it takes about 5 years for a founder or a VC to capitalize on an exit, and about 10 years for an LP to get a return from a VC investment”.
In order to restore trust in ICOs, Neufund is trying to streamline the investment process by letting investors buy the rights of a company. All businesses that choose to use Neufund are first fully verified for their authenticity; all of them have functioning business models and are well-established in their industry. The end goal of Neufund is to break norms with a platform that only markets safe and legal ICOs.
“What’s we’re looking to do is to find a way to bring inventors and investors together, and connect them on a decentralized platform that is community-owned or investor-owned; a Blockchain-based ecosystem, similar to NASDAQ, but better.” Zoe added. Brille24, startup incubator Next Big Thing, Emflux Motors, and Blockslate are just some of the companies that have already joined Neufund.
Neufund’s mission is to become the NASDAQ of the next generation with Blockchain at its core. The community-owned fundraising platform is looking to bridge the gap between the blockchain space and the investment world. The business model proposed weaves together a legal and a technical infrastructure for established companies and startups that wish to launch viable, trusted ICOs with real success potential. The people behind the company have vast experience in both tech and the legal field, boosting Neufund’s chances of gathering more startups to join its mission.
The vision is to “open innovation for good” and provide creators with the right tools to fund their startups. By removing middlemen, unnecessary barriers pertaining to jurisdictional and geographic constraints, Neufund advocates for better regulations in the crypto space designed to protect both experienced and novice investors.
Recently, the company partnered with Malta-based exchange BitBay in order to “make fundraising more inclusive and easier for companies, while bringing investors more liquid investment assets […] our partnership will enable investors to liquidate their investments directly into fiat currencies,” added Neufund co-founder Zoe Adamovicz.
Blockchain use case #5 – Bitwala (banking)
In spite of a booming crypto economy that recently surpassed €140 billion, there’s no banking infrastructure to support the growth. Although high profile banking systems have showed an interest in Blockchain technology and cryptocurrencies, most projects are siloed pilots meant to benefit the bank and not the end user. ING Bank’s initiative to enter the crypto space is no longer a secret, although they’re not looking to become the black sheep of the financial industry, but to leverage decentralization to gain a competitive advantage. Credit Suisse and UBS are also flirting with the technology, highlighting that their goal is to cut costs and streamline processes.
While Blockchain is a better, more secure way of making transfers and storing banking records, it doesn’t necessarily mean banks will no longer act as middlemen. The financial system based on fiat currency is not designed for the crypto economy. Banks in general have limited know-how of decentralization, because their ultimate goal is to manage risk and not to provide services in the form of holding digital assets like cryptocurrencies. Increasingly more businesses are open to accepting cryptocurrencies as a payment for different products or services.
However, they can’t seem to find a trusted bank to hold and protect their digital assets from different accounting, legal and auditing challenges. Bookkeepers are compelled to take into consideration the fiat price of crypto assets ( at both purchase and sale time), as well as handle additional transaction fees. Added challenges emerge when dealing with tokens held in escrow, whether they’re based on smart contracts or not. These are the issues most banks deal with, and in the absence of suitable tools and standards to address them, Bitwala enters the market with the mission to bridge the gap.
Located in Berlin, Bitwala aims to “empower people to exchange value like they exchange ideas. Globally, instantly & at the lowest possible cost.” Bitwala’s mission is to disrupt the traditional banking system with a unique business model that bridges the gap between fiat and crypto worlds. Currently under development, Bitwala will provide a completely decentralized online banking experience that includes a bank account, credit card, and wallet.
As opposed to centralized banking systems that are embracing Blockchain technology merely to improve their own internal processes, Bitwala has found a way to merge fiat with crypto, and potentially become the world’s first digital bank for the crypto economy. The company promises international payments in multiple currencies and invoice settlements in just a few hours. Although the project is still in its early stages, Bitwala has realistic chances of revolutionizing the traditional banking sector with its Blockchain-based platform for cryptocurrency.
Blockchain use case #6 – Brickblock (asset tokenization)
Still in its early stages, the crypto economy is volatile, which makes cryptocurrencies a risky investment. Because of their limited acceptance in today’s traditional economy, investors can’t seem to find a way to amend the risk. In general, money serves as: units of account, stores of value and an exchange medium. Cryptocurrencies fall into the “store of value” category; using them as units of account or as an exchange medium is new to many investors. The only way to escape volatility is to exchange your crypto back into fiat.
With blockchain technology, assets that were once illiquid can finally be converted into a tokenized form, so that they can be efficiently and conveniently fractionalized and traded. Entrepreneurs and small business owners would finally be able to unlock liquidity in domains like real estate, private equity, art, and more. Asset tokenization prevents an asset from being traded freely on the global market; it also allows investors to diversify their portfolios and benefit from a larger pool of opportunities.
It’s no longer a secret that Blockchain goes beyond cryptocurrency. Brickblock is trying to build a pioneering Blockchain-based solution that targets investing in: REFs (real estate funds), ETFs (exchange-traded funds), CMFs (active coin managed funds), and CTFs (passive coin-traded funds). The company’s end goal is to develop “a future of asset tokenization” through the efficient use of smart contracts that helps reduce transaction costs.
Brickblock will open its platform to everyone, therefore reducing geographic trading restrictions for people without a bank account. The business model is based on “an underlying rule-based asset allocation” that will use the “asset-first principle” to incentivize asset vendors and reduce investor risk.
With a working product in place, Brickblock’s vision goes beyond an idea. The platform is among the very few to have an MVP backed by both technical and legal proofs of concept. According to Brickblock, the platform has already executed its first private tokenized real estate sale. Industry leader ConsenSys Diligence approved the smart contracts, and at this point the prospectus is awaiting regulatory approval.
Blockchain use case #7 – TV-Two ( television)
For years, the television industry has been torn apart by networks abusing the power they have over the market. Big players are constantly looking to increase their profits by boosting advertisement fees and subscription costs, while at the same time lowering payouts for content creators and consumers. To maintain their position, industry leaders are trying their best to hinder innovation. Although the average consumer is used to settling for whatever is being programmed on TV, increasing more people are leaning towards personalized content.
From the outside, companies like Netflix, Amazon, Facebook and Google seem to provide exactly what people need in terms of TV-related content. However, they ultimately chase to gain market monopoly and make loads of money off subscriptions. Blockchain-based project TV-Two has come up with a unique business model that aims to leverage machine learning to become “a content discovery channel for mobile phones and smart TVs that personalized infinite video streaming”. The TV-Two protocol will use decentralization to develop an ecosystem that streamlines interaction between content providers, advertisers, and daily consumers.
In order to guarantee transparency for all activities happening on the TV-Two platform, the project will issue its very own TTV token (Ethereum-based, Token for Television). Its purpose is to fuel the whole ecosystem making sure all activities performed are genuine.
Following the launch of its ICO, TV-Two raised its first $7 million in under one hour. The company also closed a partnership with industry giant 20th Century FOX Germany; they recently announced that the TV-Two app was launched on the LG App Store, making it available on the most recent LG smart TVs in 115 countries.
Blockchain technology has potential to disrupt hundreds of industries, and with the hype on crypto getting stronger and stronger, it’s no wonder businesses are so keen to launch ICOs. Sadly, with ICOs what you see is NOT what you get. Behind a neatly designed website there’s probably a poorly written whitepaper; and of course, a CEO that doesn’t know s*it about Blockchain. Use cases make decentralized projects credible. They also contribute to assessing whether or not there’s an actual market need that should be addressed with Blockchain.
Earlier this year, Deloitte performed a study on 26,000 Blockchain-based projects created in the past two years. The results showed that 92% of those projects are now dead. The underlying technology of Blockchain is groundbreaking because it allows users to build trusted database environments without a central authority or coordinator.
With distributed ledger technology (like blockchain), users are able to create database environments where multiple mutually untrusting users can exchange value or append records without a central coordinator. Before making a use case, companies looking to use the technology should ask themselves “Should I use Blockchain?” A big YES comes with additional questions. Answering each one gets you closer to including your project in the 8% of Blockchain-based business models with viable chances of success.