Blockchain use cases
Blockchain technology can be utilized by projects, startups, existing businesses and especially for collaborations among multiple parties. In the past years, many corporations and thousands of startups have already experimented with blockchain technology and created proofs-of-concept and decentralized applications. However, only a handful of blockchain use cases have received serious recognition and some sort of adoption: Digital payments, notarization, crowdfunding, online collectibles and DeFi. Dapps in DeFi, NFT & the gambling sector are expected to receive wider adoption first. In general, there a number of blockchain functionalities and use cases that can be combined and applied in different industries.
General blockchain use cases
- Life-cycle assets
- Access rights
- Non-fungible assets
- Smart contracts
- Atomic swaps
Use case: Timestamping – Notarization
What is it? Timestamping describes documenting a specific event with time and date. In many cases, it’s important to officially testify the correctness of a document or an incident at a specific date either with a signed declaration, a witness or an official notary.
Why blockchain? A blockchain is a sequence of blocks that are added one by one. Whenever you write (save, reference) something on a blockchain it automatically comes with a timestamp and it’s easy to look up these timestamps. Since blockchain timestamps cannot be changed, it’s among the most secure approaches.
Examples: Delivery times, Document notarization
Use case: Life-cycle assets – Track & Trace
What is it? Asset Lifecycle Management is the process of managing an asset throughout its lifetime. Financial products as well as manufactured goods go through a lifecycle and must be tracked and analyzed to know their history and current position.
Why blockchain? On a blockchain, you can register your products regularly and you can issue tokens. Whenever a token is transferred, it is automatically tracked. This makes track and trace solutions very easy.
Examples: Supply chain, Ownership claims, Chain of custody
Use case: Authentication – Certification – Digital rights
What is it? Authentication is about verifying the accurate identity of a person, document, or any other item. This process can be very burdensome. Hence, there are software programs and especially official agencies that issue certificates and check the accuracy of presented documentation & things.
Why blockchain? Due to the power of blockchain technology and cryptography, any document or thing that is saved on a blockchain is incredibly hard if not impossible to alter afterward. Certificates that are issued with a blockchain can easily be checked & verified.
Examples: University degrees, Property titles, ID, Digital rights
Use case: Access rights
What is it? Access control is a security part of almost all applications and companies. Properly managing the access to systems, documents and spaces is a huge challenge and can make a difference for companies’ and individuals’ data.
Why blockchain? Blockchain can document the exact time whenever a person has access to a file or property. Additionally, access control can be automated and run completely secure without problems, interference, or required actions from individuals.
Examples: Delegation rights, Classified documents, Time-restricted access for third-parties
Use case: Indexing – Referencing
What is it? Knowledge and data is scattered in organizations, online and offline. Often, there are various systems running in parallel in order to not lose any data. Some of the internal data can be shared with external parties but must be properly documented, accessible, and verifiable.
Why blockchain? Blockchain is a database system that offers sequential consistency. Public chains can be used for settlement between private systems and function as a source of truth and reference data points. Private chains can be leveraged by known partners.
Examples: Cap table, Mergers & Acquisitions, Collaboration among stakeholders
Use case: Non-fungible assets – Non-fungible tokens
What is it? Usually when you send a file online, you always send a copy and keep the original. However, there are individualized items offline and online where it’s important that they are unique and only one person can own the asset.
Why blockchain? Blockchain has solved the double-spending problem and made it possible to send money from one person to another without needing a third party (bank) that ensures that a single digital token cannot be spent more than once. On a blockchain, you can create non-fungible tokens.
Examples: Digital collectibles, Specification, Concert tickets
Use case: Smart contracts – Self-executing contracts
What is it? A decentralized smart contract is a computer program that is coded to enforce a contract upon certain conditions. With a smart contract, you can automatically execute, control, or document legally relevant events and actions.
Why blockchain? Blockchain is run on a decentralized network that enables the smart contract to run automatically exactly the way intended without interference or change by one of the parties.
Examples: ICO, Decentralized financial contracts, Automation of sharing & payments, Pay-per-use
Use case: Tokenization
What is it? Tokens have already been used offline to replace real money and digitally to replace sensitive data with a non-sensitive digital equivalent. Digital tokens can easily be issued, can have various properties and can be exchanged & traded if intended.
Why blockchain? Blockchain overcame the double-spend problem. All tokens on a blockchain can easily be issued and transferred without a third party. Token actions such as issuance and transfers are recorded on the blockchain ledger.
Examples: Stable coins, Non-fungible token, Fungible tokens, Asset tokenization, Fractional ownership, Incentivization
Use case: Atomic swaps – Trustless exchanges
What does it mean? Whenever people and businesses deal with each other they have to trust each other at least for some time to receive goods or a service in exchange for payments. For high-value exchanges, complicated contracts and trusted third parties are used to ensure a fair exchange.
Why blockchain? On a blockchain, two parties can agree on a contract and the contract automatically executes upon fulfillment of obligations.
Examples: Exchanging goods & payments, (Flash) Loans, Multi-party agreements
Use case: Staking
What does it mean? Staking is about locking up assets for some time in order to earn interest or other rewards. Rewards can be issued in the same or in other currencies.
Why blockchain? Staking is crypto-specific and derived from the Proof-of-Stake consensus. Since projects can issue a new cryptocurrency, they can define the supply, issuance (schedule), and incentives to hold, earn, or engage with the tokens.
Examples: Incentivization, Lending, Liquidity Farming, Lockdrop
Use case: Transparency – Trust
What does it mean? Transparency is about using the blockchain as a publicly verifiable database. Information asymmetries can be prevented and more trust among different stakeholders can be achieved.
Why blockchain? Trust is the central piece of blockchain. You can minimize trust by utilizing blockchain technology instead of trusting third-parties. Blockchain provides this decentralized, immutable infrastructure that everyone can easily read and verify.
Examples: Insurance Log, Mileage of cars
Use case: Payment
Why blockchain? Digital payments should be as efficient & anonymous as cash payments. Bitcoin was created to solve digital payments without the need for a third party. Previously, business processes and payments were separated. You traded goods and used a bank to handle payments. Blockchain allows you to transfer digital goods and exchange financial values at the same time. The peer-to-peer blockchain network enables you to trade without sharing personal data with third parties, or the need to trust and pay them for their services. In fact, you can not only use blockchain for “normal payments” but trade all kinds of financial instruments through protocols.
Note: New customer-facing fintech companies can utilize various plug-and-play permissionless blockchain protocols instead of building up more and more technical debt by building on their old systems. They are able to easily create optimal financial instruments and applications for their customers. Since not all people will be tech-savvy, buyers & sellers need to find each other, and not all transactions need core blockchain security; these fintech companies, (decentralized) exchanges, payment networks & payment agents (individuals & banks) will emerge and take on new “middleman” roles. The cut of middlemen should significantly shrink over time and the financial system should become accessible to all with a mobile phone.
Use case: Pooling / Aggregation
What does it mean? Pooling is the grouping together of resources. You can aggregate funds, risks, or exchanges and continuously provide better offers & rates over time with this kind of pooling.
Why blockchain? Pooling is a well-known concept that insurances and other businesses use to offer better rates to clients compared to single offers – where demand and supply must perfectly match. In fact, the demand variability is reduced if one aggregates demand across places because as demand is aggregated across different places, it gets more likely that high demand from one customer will be offset by low demand from another. Hence, you need fewer counterparties & less available average funds/inventory/assets. With smart contracts, you don’t need anyone to manage the pool and make this incredibly efficient. You can create trustless pools as counterparty for various use cases and even determine functions such as bonding curves as automated counterparties.
Examples: Peer-to-contract Insurance, Automated investment protocols, Exchange rate optimization, Fee reduction
Blockchain use cases per industry
There are blockchain use cases & blockchain projects in all areas. We share more and more insights to potentials in each industry.
ALL COMPANIES & DAOS
Companies & projects can utilize new fundraising mechanisms & use token incentives to empower users & make them engage or contribute more actively.
ALL VALUE CHAINS
Individuals & organizations can replace companies in traditional industry value-chains. Producers can also participate along the value (chain) creation due to new traceability possibilities.
ALL UNIQUE DIGITAL THINGS
NFTs (Non-fungible tokens) can be used for digital collectibles, in gaming & arts and can be traded on marketplaces. NFTs can also enable identification & tracing of accounts, people & things.
Use cases include food traceability or the shared purchase & use of equipment by groups of farmers.
Automotive & Aviation
Use cases include the verification of vehicle components, the connected car and seamless charging payments.
Use cases include digital currencies, cross-border payments or efficient clearance & settlement systems.
Use cases include the registration of legally binding handovers or constant property management & maintenance.
Decentralized Finance (DeFi)
A new, parallel financial system will run on decentralized networks and enable all to borrow, lend or trade without banks.
Defense & Arms
Use cases include tracing of high-value weapons, prevention of cyber attacks or reduction of single points of failure.
Use cases include secure digital certificates & credentials as well as new co-creation & learn-to-earn models.
Use cases may include better data sharing throughout the supply chain.
Use cases include peer-to-peer energy trading, efficient resource management and distribution.
Use cases include digital rights management, reduction of piracy, and direct distribution of contents.
Use cases include food traceability for improved food safety & quality.
Use cases include cross-border payments, more efficient securities trading and record-keeping.
Games & Gambling
Smart contracts & staking mechanisms enable you to play a dice game, poker & no-loss-lottery without counterparty-risk.
Use cases include various registries, efficient auctions & allocation of finances as well as reduction of bureaucracy.
Use cases include the reduction of silos & better, more secure information sharing while keeping hold of original data.
Use cases include self-sovereign identity and consequently single-sign-on & sharing of specifically agreed data.
Use cases include the reduction of information asymmetries and quick insurance closings & payouts.
Health Care & Pharma
Use cases include critical supply chain tracking, patient’s direct ownership of medical records & access for research & pharma.
IT & Engineering
Use cases may include secure co-creation & participation in returns from software built on top of open-source software.
Use cases include new business models such as pay-per-read or pay-per-second for online articles & videos without ads.
Use cases include fractional ownership, better market transparency & lasting property management records.
Use cases include a new economy for researchers and better data sharing among scientists, testers & companies.
Use cases include fraud reduction and less administrative costs through direct support & better accessibility.
Social networks running on decentralized networks can improve user privacy & avoid any single point of failure.
Use cases include better fan relations & engagement through tokenization as well as ticketing fraud prevention.
Use cases include supply chain traceability & supply chain management through better data access.
Use cases include track and trace solutions & easier verification of claims and who buys what from whom.
Use cases include (automated) carrier-to-carrier transactions, multilateral agreements & standardizations.
Use cases include the traceability of textile products which may lead to better sourcing & higher quality consumption.
Use cases include parts tracking of vehicles & sharing of revenues across service providers in transport systems.
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