With the launch of Bitcoin ten years ago, blockchain technology burst onto the tech scene. Because of that initial introduction, many business leaders, and even 3D architects, equated blockchain and cryptocurrencies. In reality, the value proposition of blockchain is much broader.
At its most basic level, it enables two or more people, computers, or businesses to swap value in digital environments. Everything without the need for an intermediary such as a bank or a third-party platform. In other words, blockchain rewrites the rules of the digital economy.
What Is a Blockchain?
A blockchain is a network that makes it easier to record transactions and track assets, also known as an open ledger. Usually, these assets are intangible (patents, intellectual property, branding, copyrights). Nevertheless, it’s clear who owns them and who doesn’t.
The data on a blockchain cannot be modified by design, making it an applicable technology in industries such as payments, cybersecurity, and healthcare.
The Benefits of Blockchains
Those who use blockchain technology can rest assured as they rely on unmodifiable, fast, and accurate data. Additionally, the networks a customer operates it doesn’t require someone’s personal data. Transaction records are all the info you’ll have to provide.
All network members must agree on data accuracy, and all corroborated transactions are immutable because they are permanently recorded. A transaction cannot be deleted by anyone, not even by the system administrator.
Hence, most crypto exchanges are open to the public. However, this doesn’t mean one’s account cannot be hacked.
Time-consuming record reconciliations are eliminated with a distributed ledger shared among network members. A set of rules, known as a smart contract, can also be stored on the blockchain and implemented automatically to speed up transactions.
Despite the market being extremely hectic, crypto exchanges still operate normally most of the time without any issue.
Smart Contracts: The Essence of Blockchains
All blockchain-based applications are made up of two major components: smart contracts and interfaces (front-end).
The front-end or user interface is critical because this user will interact with the application. Regardless, when it comes to blockchain projects, the Smart contract is where the heart of the project lies. Smart contracts are programs that contain the application’s business logic and will run on a blockchain.
The Solidity programming language is used to create these smart contracts. In order to develop a blockchain network, a Solidity programmer is a must. Only expert coders can cipher how this technology works and its applications. This is very different from web applications.
The primary distinction between a web application and a blockchain application is that a web application communicates with a web server for its code and data. Whereas a blockchain application communicates with a blockchain that contains both code in the form of smart contracts and data in the blockchain itself.
How Blockchain Projects Produce Profits
The majority of Blockchain businesses make money by providing software as a service. There is the example of Block cypher, that charge a fee for using its API and infrastructure with the assistance of professional services.
While some other companies create custom projects for themselves. For instance, blockchain entrepreneurs can create a token, implement it on a network, give it value, and, or, design NFTs for it.
That is one of the most common uses blockchain technology has. Most startups also optimize smart contracts for bigger companies.
Types of Blockchain Projects
Consider, for instance, a car insurance blockchain that is able to store policy details and contract rules while automatically processing third-party claims. This way it will enhance efficiency and reduce fraud.
Even how a blockchain could capture the custody wine all the way back to the vineyard, reducing counterfeiting.
However, despite widespread experimentation, blockchain is still a young and evolving technology. There are a lot of these kinds of projects and more waiting to be developed.
All of these projects that should be closely watched can be categorized differently when taking into account their purpose and decentralization levels.
Fear of Missing Out Solutions
FOMO solutions are highly centralized, as they are frequently applied by a single business for use in-house or with a small number of partners.
This is usually seen when a company wants to be considered as innovative but hasn’t decided on the added value its blockchain will bring. As a result, FOMO blockchain projects are a reality, even if it does not utilize the existing technology initiative properly.
Some companies are pushing blockchain projects because the order to do so originated at the leading seats. This means that, despite not being the best suited to use blockchain technology, there are many of these projects.
Trojan Horse Solutions
A food-tracking blockchain is one possible Trojan Horse project example. Retailers’ rationale for launching it is food safety.
In a non-blockchain environment, pinpointing the exact farm or processing facility responsible for contamination can take weeks. Meanwhile, dozens of people can become ill during that time.
Complete and easily accessible documentation will allow stores to locate the source of contamination and stop it where appropriate more quickly.
The risk for Trojan Horse blockchain participants is that they become dependent on the owner’s technology and are locked into the contract terms. As it gathers supply-side data, the owner of the Trojan Horse may gain more market control over time.
This is why trojan horses projects are called that way; they appear appealing from the outside. They require participants to share their company’s data and transfer some control or influence for the blockchain manager to build its network.
Opportunistic solutions seek to address known record-keeping problems or opportunities that are underserved by existing solutions. The Australian Securities Exchange is developing a blockchain solution to streamline financial trading.
Even if they do not result in a live, operational platform, opportunistic experiments can provide value to their participants. The experience of launching a blockchain initiative, even if it is canceled halfway through, will instill trust and interest in blockchain technology.
Evolutionary blockchain solutions are intended to mature over time so that tokens with decentralized governance can be used. One example of this comes from an unexpected source: UEFA, Europe’s central governing body.
UEFA is collaborating with Swiss technology companies SecuTix and TIXnGO. Their aim is to drive a safer and balanced secondary market for football soccer ticket sales.
The platform operates with the brands’ app to buy tickets. The app is linked to a blockchain, and tickets are tokenized so that the system can track ticket purchases and link ownership information.
If an owner wishes to give a ticket to a friend or relative, he or she can do so via the app, which records the transaction on the blockchain. When a ticket holder wishes to sell the ticket on the marketplace, the SecuTix platform specifies the markup that resellers may charge.
The secondary market for tickets may eventually develop into a decentralized sales platform that links all secondary ticket sellers in that environment.
Brands and startups are leading blockchain-native solutions intended to fix the issues inherent to the crypto market. They may not begin with tokens or decentralized governance, but they are intended to do so as the market matures.
Native blockchain solutions will introduce novel business models into legacy industries. They provide alternatives for businesses to address well-known challenges involving data sharing and workflows. The real business of Blockchain gives enterprises a chance to win the digital race.
Even though blockchain technology is a fairly uncharted innovation, its uses are food for thought. Not only did blockchain technology change the economy forever, but it may also transform the lives of many soon.