The blockchain technology is the core concept behind cryptocurrencies like Bitcoin. But cryptocurrencies are only one possible application of the blockchain. In this post, we will explore other uses cases for this interesting technology and how it could potentially change the world we are living in.
Let's start with the more obvious because it got the most attention. A blockchain rests on a decentralized ledger. There are no third parties involved in the process. In the case of a bitcoin transaction, your bitcoin goes from one wallet to another, without having to rely on an institution or government to make it happen. In our current society, we trust banks to execute a lot of operations concerning money. The blockchain would allow users to skip the middlemen and just deal with one another.
With that being said, it seems like we are a very, very long way from this scenario becoming reality. Cryptocurrencies are simply too volatile to be trusted to replace the current system. It is interesting to note that banks seem to be active about the blockchain technology. A company called R3 recently worked with more than 40 banks to imagine a possible future for blockchain with banking establishments. R3 recently launched a version of its blockchain backed by a dozen banks.
Why would banks be involved in a concept that could essentially make them obsolete? Well, blockchain has a lot of potential applications, as you'll read next, but we can easily imagine how banks ( and a lot of other organizations ) could reduce their costs by not having to deal with third parties organisms.
When you think about it, plateforms like Uber and AirBnB share the same concept. They are intermediates, they centralize the informations their users need. A 'bank for cabs', or 'bank for rooms' if you will. You need a ride, someone else has a car, you use Uber to share your informations. Of course, in the process, Uber takes a little something, driving the costs up. Same for AirBnB. While those companies and their services are not as essential in our societies as banks, the blockchain could suppress the need for them.
For example, arcade.city is a project created by a former Uber driver. It relies on a peer-to-peer network, you don't need to use a third party to find a driver or a passenger. Nobody but the two agents ( the one with the car and the one without ) decide on the price. You don't even need to use money. If you want to exchange a car ride for a sandwich or a ticket to a football game, what's the big deal? Blockchain works on decentralized trust, nobody gets in the middle of your transaction.
slock.it is a company hoping to replace Airbnb. The slock.it blockchain technology is based on Ethereum.
The electricity market is a top to bottom system. Someone produces the electricity, someone consumes it. But, in today's world, some consumers are able to produce their own electricity. How do we deal with people who have solar panels and an excess of electricity? How do you make them part of the network?
The SolarCoin allows people to make electricity transactions between private individuals. We could imagine a market where individuals buy and sell their energy using the blockchain to secure the transactions. Again, costs would go down, because nobody but the seller and the buyer would intervene in the transaction.
So far, you may have recognize that a few things seems to happen when using a blockchain: costs go down because intermediates disappear, the decision process is much faster because it is automated and it is safer because the blockchain is transparent.
We could imagine countless applications for smart contracts. Imagine contracting an insurance, you and the insurance company agree on some terms. The smart contract takes the informations it needs, and as soon as the conditions are met, the payment is made.
A airline could create insurances using the blockchain technology to compensate people where a plane is late. The smart contract would gather informations about the planes time of departure, and whenever a plane would be late, the user would be compensated. Without her having to do anything, filling a form or make a phone call.
AXA, a french insurance company, invested 55 millions $ in a canadian company called Blockstream.
A management school in Marseille (France) already uses the blockchain to certify its degrees.
Project managers, art professionals and many more could benefit from such a technology to prevent fraud.
Blockchain is a transparent way to store informations, nobody controls it and it is secure. It could be a great way to trace medicines and make sure the drugs you are using are approved by organisations you can trust. The Health World Organization estimates 700 000 people die every year because of counterfeit drugs. Between 10% and 30% of drugs are counterfeit in third world countries.
Still on the health department, Estonia used the blockchain to secure 1 million health records. source
Not a (huge) problem in rich countries, but in certain countries, lands are not registered in any database. How do you prove a land is yours? What prevents your neighbor, or anyone else, to come over and take your land?
Land registers in some countries are either non existant, or obsolete for a lot of rural areas. Not being able to prove ownership of your land is a huge obstacle to development.
In Honduras, the government registered its entire territory on a blockchain with the help of a company called Epigraph.
When we think about democracies, we think about voting. That is what it is. We ask everyone in a country, state, organization, company and count the votes to determine a winner.
The blockchain could again help with the process. The transparence of the blockchain could make sure no frauds happen, and enable a safe online vote.
It could work like this: an organization ( country, company ) wants to organize a vote. Let's say a company with 100 employees. The company will use a protocol to create its own tokens ( like Bitcoin is a token ). It will emit 100 tokens, one for each employee. Every employee has access to a wallet, that will be used as a public ballot box. An employee would then transfer the token with the data that represents its vote. Like in the Bitcoin world, each employee would have a key ( part public, part private ) that would prove she is indeed the owner of the wallet.
We are obviously far away from being able to hold large scale elections with blockchain, as there are a lot of problems to solve first, but this is another use case that could be interesting to explore.
The more I read and learn about blockchain, the more I am convinced that it will change our societies for the better. These 7 examples are just a short list of what could be possible, and we probably just scratched the surface.
Sources: ( in French )