The blockchain technology has a very promising future for various industries and aspects of human lives. Cryptocurrencies are not the only use case of the blockchain technology. In fact cryptocurrencies are just one aspect of the blockchain. There are other powerful use cases of this technology, though most of them are still under development. You will learn about the various use cases and future of blockchain in this article.
Blockchain Use Cases and How It will Reshape Existing Online Sectors
Blockchain has already transformed many online sectors and will still do more in future. Below are some of the blockchain use cases and some sectors where the integration of blockchain will bring improvement.
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Blockchain technology has improved cybersecurity and more positive impact will take place in the nearest future. By removing much of human elements from data storage, blockchains have significantly reduced the risk of human error, which is one of the main causes of data breaches. The risks of identity theft, cyber-attacks and other foul plays in online transaction can be taken care of by the implementation of blockchain technology in cybersecurity.
Below are some of the use cases of Blockchain in cybersecurity:
- Advanced Confidentiality and Data Integrity
- Protected Edge Computing with Authentication
- Improved PKI (Public Key Infrastructure)
- Secured Private Messaging
- Diminished DDoS (Distributed Denial-of-Service) Attack
- Improved DNS (Domain Name System)
You can read more about the future of Cyber Security with blockchain technology.
Business and Cross-Border Payment
For businesses that source goods and services around the globe, the typical cross-border payment system has not been very favourable for them. This is because there are several steps and intermediaries involved in making payments internationally via established banking channels. And each step of this process takes time and also requires a processing fee.
According to World Bank, the average fee for making payment worldwide is 7%, which is quite huge. But with blockchains, no middleman, delays or unnecessary fee is involved. Also, every transaction is processed and stored in a secure distributed ledger.
You can read more about how blockchain is transforming cross-border payment.
This is one of the applications of the blockchain technology. Smart contracts are computer programs that can oversee every aspect of an agreement, and can self-execute when some pre-set criteria are met. Also note that some smart contracts are also self-enforcing.
Smart contracts are better alternatives to traditional contract law. Also, it is more secure, automated, faster and cheaper than the traditional method.
Identity Management and Voting
Blockchain technology provides a more secure level of identity management since there are many nodes on a blockchain network, the independent verification processes need to go through all the nodes on the blockchain network. The blockchain identity management strategy can be applied on many fields. For example, it can be used to prevent the manipulation of votes and voters’ information during electoral processes. You can also apply it to any other business field where secured and efficient transfer of users’ data across platforms is needed.
Blockchain technology has already improved how insurance works and more positive impacts are coming soon. Companies like B3i and Etherisc have implemented blockchain, which has brought efficiency, trust and transparency to the insurance sector. The benefits of blockchain in the insurance sector are enjoyed by both the insurers and their customers.
By using blockchains in the insurance sector, the cost of claiming process will reduce, because the claims and data processing involved will be automated by blockchains with the help of smart contracts. Also, there will be increased transparency between all the parties involved.
You can learn more about the future of blockchain technology in insurance.
Crowd funding sites usually charge a fee for acting as a middleman between protect developers and donors. With the application of blockchain technology in crowd funding, there will be no need for middlemen since smart contracts could securely do the work of a middleman in crowd funding.
With the application of blockchain smart contracts in online retail stores, buyers and sellers will now be able to transact directly without relying on the retail system and at the same time, reducing the rate of fraud. This will as a result, reduce or even eliminate transaction costs.
The process of tracking and verifying ownership in real estate business could be improved with the application of smart contracts of blockchain technology.
Integration of Blockchain Technology, Artificial Intelligence (AI) and IoT
Before now, blockchain, Artificial Intelligence (AI) and Internet of Things (IoT) are explored individually, or one is being integrated into another. For example, AI and IoT, or blockchain and AI. But the integration of the three innovations has not been fully explored. The integration of blockchain, AI and IoT will open a wide range of growth opportunities for many businesses.
When the three innovations are integrated in a business process, blockchain will take care of data verification and storage in a decentralized ledger, IoT will take care of automation and user-friendliness of the business processes. Finally, AI will improve the business processes by detecting patterns and optimizing the outcomes of the business processes. Smart contracts can be used to connect these three innovations, since they are the business logic of blockchain networks.
When IoT and AI are integrated with blockchain technology, the issue of data privacy and compromise will be solved, since the information added to a blockchain cannot be altered by a single admin or blockchain node.
DeFi (Decentralized Finance) refers to the decentalized protocols, services and platforms that is geared towards disrupting financial intermediaries in banking systems and traditional finance as a whole.
Between 2019 and 2021, DeFi has gone from $1 billion to over $100 billion, and more growth is still expected. In future, via DeFi many forms of values will be exchanged digitally, with relatively low cost over decentralized networks. This is to show you the impact DeFi will have in future with blockchains.
You can read more about the Future of DeFi beyond Cryptocurrencies.
- Understanding the Blockchain Technology, Bitcoin & Cryptocurrencies
- Blockchain Technology and the Evolution of the Internet
GameFi, NFT and Metaverse
Blockchains are the backbones of Game Finance (GameFi) and Non-Fungible Tokens (NFTs). GameFi is the combination of gaming and decentralized finance (DeFi), and the integration of blockchain applications (web3 apps) in the gaming sector so that gamers can be rewarded for playing these blockchain games, popularly known as Play-to-Earn (P2E) games. In play-to-earn games, gamers are rewarded with tokens (both fungible and non-fungible tokens) for achieving certain in-game goals. The fungible tokens can be exchanged for other cryptocurrencies or fiat money or used to purchase game content.
GameFi also makes tokenization of game contents possible. With NFTs, gamers have the unique opportunity to acquire copyright or exploitation rights of in-game contents, which can be transferred to friends in the same game, or even to other play-to-earn games.
Metaverse is an internet-enabled virtual world where people have avatars, interact with digital assets (including corporate assets with augmented reality). For example, you can buy a land in the virtual world, build house on it and rent it out. Sounds crazy right? Blockchain acts as an immutable record of transactions that take place in the metaverse.
So far, blockchain games are generating billions of dollars from tokenized digital goods (NFTs) transactions. In 2020, many online gamers quit their jobs so that they could have enough time to explore metaverse, play more P2E games in order to earn more collectibles. Some popular and successful P2E and metaverse projects include: Splinterland, Axie infinity, Decentraland, The Sandbox, Gala Games and Alien Worlds.
Huge future growth is predicted in Game Finance, as most of non-blockchain online games are now joining the blockchain play-to-earn game trend. Even some well established companies are now investing in blockchain game industries. Recently, Microsoft acquired the video game company, Activision Blizzard for $68.7 billion. Microsoft also declared its interest in the gaming and metaverse business across mobile, PC, console and cloud.
More companies will join the GameFi and metaverse business soon, which is a positive future sign for the industry.
More about NFT and metaverse are discussed in the “NFT Beginner Guide” section of this book.
You can read more on how blockchain heralds the dawn of a new era for gaming.
Online Gambling Industry
Blockchain technology helps to further secure the online gambling industry by providing an extra layer of protection for users because their data and transactions are recorded in a database which is stored in a decentralized ledger. The technology also mitigates the risk of both hacking and payment duplication since blockchain technology does not permit double spending.
Blockchain technology also helps to ensure data privacy, which is a major concern for most online gamblers. With the integration of blockchain technology in online gambling sites, detailed information about the gamblers are not needed during registration. This as a result, will attract more users to the online gambling industry, especially those who are more concerned about the protection of their private data.
Also, with the introduction of cryptocurrencies and blockchain technology, transactions and payment processing will be faster and more efficient. This is because when an online gambler deposits cryptocurrencies in the gambling platform, they don’t need to wait for s bank or any third-party company to verify the transaction. Instead the blockchain does the verification almost instantly.
With the integration of blockchain technology in the healthcare sector, the encrypted healthcare information of patients could be shared with multiple healthcare providers without the risk of privacy breaches.
Web3: The Future of the Internet
Web3 is the third generation of the web, which is not yet fully developed. In Web 1.0 the internet was more of typical web pages filled with contents produced by commercial entities. In Web 2.0, we saw a shift towards the introduction and growth of social media, where the average persons relied on big tech companies such as YouTube, Facebook, Twitter, etc. to earn from their own content.
In Web 3.0 (Web3), the web will be decentralized, such that an average person can earn from his own content without depending on these big tech companies. Like cryptocurrencies, Web3 is also designed to revolve largely around the blockchain technology.
The main difference between Web 2.0 and Web3 is that in Web 2.0, most of the apps created by developers run on a single server and their data are also stored in a single database, which is often hosted and managed by a single cloud provider. While in Web3, apps are built on blockchains, which are decentralized networks of many peer-to-peer nodes (servers), or a hybrid of the two. These Web3 apps are often called decentralized apps (dApps). Web3 developers are rewarded in form of cryptocurrencies or tokens and they compete to provide the best quality services to their users in order to establish and secure decentralized network.
Another way to distinction between Web2 apps and Web3 apps is that in Web2 apps you need an email ID and password, which might differ from app to app, and most times, you are required to submit your personal data in Web2 apps before you can use them. But in Web3, the ID you need in order to interact with the app is usually your wallet address, which are fully anonymous, unless you as the user chooses to link your identity to it publicly. You can use the same wallet address across multiple dApps in Web3.
One of the reasons why Web3 is seen as the future of the internet is that it allows users to have almost full ownership of their data and are able to use these data without sacrificing privacy, ownership or relying on any third-party middleman.
Also, web3 has made it possible for users to earn passive income from the data they provide. Some of the income-earning strategies made available by web3 include:
Open Finance is a new trend for financial technology (FinTech) companies, where they use blockchain technology to integrate with banking services in the traditional financial system. With the DeFi trend and increasing dominance in FinTech, where users who don’t have a bank account can access funds globally, banks and other traditional financial institutions seeking a way to maintain their relevance in the FinTech now make use of blockchain technology to increase access to their products and services for their existing customers and even new ones. So Open Finance is simply the trend of cooperation between banks and third party companies operating in the FinTech and blockchain space.
Although DeFi and Open Finance are both subcategories of Future Finance (FutureFi), they have a striking distinction. Open Finance involves the use of improved apps (with blockchain integration) by banks and third-party FinTech companies to improve the user experience and the ease of accessibility of traditional financial products (mainly fiat currencies). But DeFi is a totally a novel, decentralized financial system that replaces the traditional financial system. Banking systems are not involved in the DeFi System, unlike in Open Finance. DeFi mainly utilizes blockchain infrastructures and digital assets which are available worldwide to anyone who has a smartphone and is connected to the internet.
The involvement of blockchain in Open Finance has changed how lending and borrowing works. Banks no longer need to verify the creditworthiness of a borrower before releasing the loan. Rather, a borrower can easily put the collateral for a loan into a smart contract, stored in a blockchain. Lenders can now verify the presence of the collateral from anywhere in the world since it was placed on an open, public blockchain. With this, they are assured that their funds are safe and secured.
Also, with the aid of blockchains and smart contracts in Open Finance, smart contracts can be programmed to release funds to the borrower if the collateral for the has been put in the blockchain or if the loan is not paid in full within certain period, the collateral will be released to the lenders instead. Lending and borrowing is now improved and automated with the aid of smart contracts and blockchains in Open Finance, which was not initially possible in traditional finance. Many FinTech companies are venturing into Open Finance and in the nearest future, a huge adoption will be seen.
Some top blockchain networks that fully support open finance are Oasis network and Algorand.
You can learn more about open finance and DeFi.
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You have learnt some of the use cases of blockchain, what their future will look like, and how blockchain will help improve some online sectors. Some of the use cases mentioned include: cybersecurity, business and cross-border payment, smart contracts, identity management and voting, insurance, crowd funding, retail business, real estate, AI and IoT, DeFi, GameFi, NFT, metaverse, online gambling, healthcare, web3, open finance, etc. Blockchain will surely reshape the future. It’s just getting started!
Do you have any contribution or question about blockchain and its use cases? Drop it in the comment section below. Enjoy!
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