April 25, 2019 – An important part of blockchain applications is knowing which one is actually practical; as blockchain has been overhyped these last couple of years to the point where it’s difficult to know which applications make sense. Admittedly blockchain is not a one-size-fits-all nor is it a solution for everything.
It has a broad but very specific application: any situation where multiple parties that don’t trust each other need to transact safely without a middleman.
It all started with Bitcoin. Even today, with more than two thousand alternative cryptocurrencies available, Bitcoin is still a major part of the blockchain industry.
The first application of blockchain is store of value, i.e. the ability of an asset to retain its value in the future. Some people call this “sound money”. That’s because Bitcoin’s currency (BTC) has a limited supply unlike national currencies like our Peso, which has no limited supply and is expected to depreciate perpetually. Bitcoin is also not subject to the whims of any governing body or corporation. It is completely decentralized: a currency powered by the people for the people.
Cryptocurrencies are also very useful for payments as there are no intermediaries to take a cut off every transaction. This benefit is even magnified when you do cross-border payments or remittances, as traditional wire transfer is a very slow and costly process. Rebit.ph allows users to send money to the Philippines from anywhere in the world using Bitcoin.
The finance and business world is full of middlemen, such as agents and brokers, making it ripe for disruption. The goal is to remove the need for these middlemen and consequently make business and processes cheaper and more secure.
Smart contracts allow businesses and individuals to form digital relationships. The most promising platform for this so far is Ethereum, which partly aims to apply business logic on a blockchain in order encode any transactions of various complexities, that can be authorized or rejected by the network running the code.
Supply Chain Management
Supply chain management is the management of the movement of products and services, including all processes that transform raw materials into final products.
Back in the day, supply chain was simple since commerce was local. But since a few decades ago, it grew too complex due to the advent of the internet and globalization. It’s very difficult for buyers to truly know the value of products because the current system lacks transparency.
With blockchain technology, that could be fixed. Different supply chains, i.e. product manufacturer, assembler, transporter, etc.—different entities that don’t necessarily trust each other—could form a blockchain network that allows all parties to track the movement of goods and services through a common blockchain network.
Blockchain allows individuals to create their own digital identity without revealing personal information; which would allow them to have ownership rights and form digital relations. The digital identity doesn’t have to be visibly connected to an individual’s real identity. Blockchain allows individuals to be both transparent and anonymous.
This could also change the gaming industry forever. Games and game items could be put on the blockchain, allowing complex ownership rights to gamers and incentivizing the whole gaming ecosystem. And any gamer in the world could participate in this global economy.
Bottom-line is, we are still in the very early days of blockchain technology. We have no idea what it could look like 5 to 10 years from now. The only thing we know for sure is that it’s here to stay.
This article originally appeared on BitPinas: Applications of Blockchain | Blockchain Philippines Guide