Since lately the word Blockchain is very fashionable and is described as a possible solution to all ills, I still see a lot of people who are struggling to understand from a practical point of view its possible uses so I decided to list a couple of uses of this technology in the hope of helping someone to understand it more.
After all the hype that has been created towards the end of 2017, the word Blockchain is on everyone’s lips. All startups are now dealing with that, all are blockchain enthusiast but at the end of the day, few people manage to indicate in a simple way what can really be done it.
Before starting, however, I want to make a couple of clarifications:
- Blockchain IS NOT the technology behind cryptocurrencies but IT IS ONE of the 4 underlying technologies. These are the blockchain (for the note), the consensus mechanism (ie the Proof of Work of Bitcoin and Ethereum), the peer-to-peer network and the cryptography.
Everyone for the sake of simplicity merges all of those in the word “Blockchain” and I will do the same, but remember that all 4 of those technologies are all fundamental. Many start-ups often take advantage of this word so always inquire thoroughly on the projects you follow.
- Below I will list only uses that today are 100% feasible and not so difficult to implement by focusing mainly on the possibilities offered by smart contracts.
Smart contracts are nothing more than programs that run continuously on the blockchain. You can think about them as a coffee machine: I put the money and select the product. Once the machine has verified the transaction it gives you the product.
- The Blockchain on which these applications are built or where the smart contracts run must be consolidated, secure and decentralized. Otherwise, the whole thing would be useless because there would be no difference between using a Blockchain and a traditional database. Indeed worse, both in terms of speed and the risk of losing money.
Ok, let’s start!
- A smart contract can be used to create agreements where money should be sent only after a certain condition has been triggered. For example, you can deposit money on a smart contract where inside there is a timer that, in the end, sends the money deposited to the chosen recipient. Giving security to the recipient that the money will surely arrive and to the sender that the money is sent only after a given condition.
- Smart contracts can be used to manage payments within a company fairly, according to agreements and transparent to all. Without any need for intermediaries.
- You can create accounts where money can be moved and used only with the consent of several owners (multi-signature technology).
- Trace the investment of public money, and not, to understand how this is used.
- You can use Blockchain and smart contracts to automate crowdfunding and make it transparent: for example, if a certain target is not reached, the money can automatically be sent back to the lenders without having to trust to any third party. And I’m not talking just about ICOs but about the crowdfunding world in general.
- Blockchain can be used for transparent voting systems. Yes, the blockchain elections will be the future, even if there are still some problems to be overcome, but in the meantime, also of voting in online communities to favor the transparency and solidity of the data, it’s a good start.
- You can build apps that manage money (I think about freelancer applications or affiliate marketing programs) where the user has complete control over their money, without having to wait for the owner of the service to give him the permission to withdraw his money, requiring in some cases even very high fees or setting completely absurd conditions unfavorable to the end user.
- Create censorship-resistant applications.
- Increase user privacy and pass back control and responsibility of data to individuals.
I wanted to keep it simple and those are just a few usage scenarios that came in my mind. According to you, what else can the Blockchain and the smart contracts be used for in the present?