Blockchain has nearly limitless potential to change business operations across industries.
In a world driven by instant gratification, shortcuts and quick fixes, it's easy to see how the investment potential of cryptocurrencies attracted a massive new wave of Initial Coin Offering (ICO) investors. Fueled by media hype and viral stories of overnight millionaires, thousands of first-time investors, many of whom belong to the tech-savvy millennial generation, wanted a piece of the action.
In many cases, investors were able to make 100 or even 1,000 times their initial investment. The problem with this model is that it opened the door for large-scale abuse. Some projects started off as downright scams – with fake team members and plagiarized whitepapers, they collected funds and simply disappeared into thin air. Other projects started off with good intentions and a good idea, but as the money came rolling in, many of these projects simply failed to produce a product or platform. There was no accountability, so in most cases they got away with it.
For most of 2018, the ICO market had died down considerably. Even really good projects battled to reach funding goals, because many first-time investors left the crypto market after losing money from exit scams. This has started to change in 2019. People are exploring the market again, especially now with the introduction of STOs (security token offerings), which are regulated and overseen by the U.S. Securities and Exchange Commission. There will be more focus now on utility, applications and industry disruption. The beauty of this is that people will start to see the potential of the underlying technology instead of just seeing cryptocurrency as an investment vehicle.
One of the barriers to entry that the industry faces is the technical nature of the currency, which tends to hamper user adoption. This is slowly changing: Even people who are not tech savvy are starting to understand how blockchain can be integrated in various aspects of our lives.
A blockchain is a distributed ledger that is immutable, transparent, secure and decentralized, and runs on a consensus algorithm. Most people are unlikely to understand the value of blockchain by simply reading the above terminology, so to put things into perspective, let's look at potential use cases for a blockchain.
We live in the digital age, so why does every country in the world still depend on physical, paper, or plastic identity documents and passports? Identity theft is a worldwide problem, and one of the major reasons for this is our dependency on physical forms of identification. Also, think about the often painful and laborious process of replacing a lost or stolen identification document. It's time-consuming, expensive and resource-intensive.
How could blockchain solve this?
Having our identity in digital format on a blockchain-based solution would mean that your digital identification is with you 24/7/365. You don't need to carry around any documentation; there is nothing to physically lose or be stolen. Thanks to blockchain being decentralized, there is no single point of failure, and thanks to immutability, your information cannot be tampered with. You have full control of your identification, and you can allow restricted access to it with the use of a key or serial, much like a PIN or Social Security number. You can decide how much information you want to share with the person and how much of your data you want to keep private.
Currently, when someone purchases a property, they must do so through an intermediary, like a conveyancer. Anyone who has purchased or sold a property in the past knows what a time-consuming, costly affair this can be. Apart from that, these deeds are physical records, which means they can be tampered with, even though they sit at the deeds office. The weak links in the system are the human components, which, as we all know, are fallible and corruptible.
How could blockchain solve this?
A blockchain-based title deed system would make the transfer of property almost instant. Due to the transparency of the blockchain, it's a trustless system. We don't need an intermediary to confirm or verify anything. Anyone can verify the transaction. It can also be automated into a smart contract: For example, when Person A (the seller) gets payment from Person B (the buyer) into a predefined cryptocurrency wallet belonging to Person A, then the title deed will automatically transfer to Person B. This entire process could happen within a matter of minutes and cost less than a can of soda.
These are just two basic examples of real-life use cases of blockchain technology. There are many more to come. We are only at the beginning of this technological, social and economic revolution.