The Problems Blockchain Solves

People often talk about crypto and NFT’s without mentioning the technology it’s built on.

Blockchain technology is the foundation of all things decentralized.

You might hear some say, “The future is on chain.”

In this newsletter, we will break down how blockchain can actually help innovation and solve real-world problems.

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What is Blockchain?

Before we dive into the problems it solves, lets define what blockchain is. Blockchain is a decentralized and distributed digital ledger that records transactions in a secure and transparent manner, allowing for tamper-proof and verifiable records of data and assets. Think of it as a long list of all transactions that everyone can see and nobody can control. On the blockchain, you can build decentralized apps, use cryptocurrencies, buy non-fungible tokens in the form of digital art, the possibilities are endless. But like any other good technology, it can solve some problems. Here are the underdog use-cases for blockchain:

1. Supply Chain Management

Packages and shipments get lost on the daily. The global supply chain is so massive that it is hard to scale. Blockchain can help improve efficiency through asset tracking, security, and transaction transparency. The public ledger can be used to track every stage of the supply chain process while keeping it secure along the way. Not to mention, it would significantly decrease the amount of illegal activity as blockchain is tamper-proof and open for everyone to see.

2. Identity Verification and Security

As we know, there is a lot of fake identification in the world. With that, people’s data is always susceptible to being hacked or compromised. On blockchain, your data is secure, tamper-proof, and controlled by you. Many do not realize the amount of information we store in centralized entities. Blockchain utilizes digital signatures to ensure that your information is verified. You have a key pair, a public key and a private key. The public key is meant to be public and is linked to your private key. The private key is the one used to sign a digital message to verify your information. We may live in a world one day where everyone has some kind of decentralized digital identifier with all of their basic information on it that they can verify anywhere with a key pair. Sounds much easier and safer than giving central entities your info every time you sign up for something.

3. Social Capital

This is probably the least talked about but most useful aspect of blockchain. It is an outstanding tool for building social capital. It is decentralized and can be used pretty much everywhere. In third-world countries, there is no access to traditional banks or the same tools we have to contribute in society. In these countries, blockchain can help get citizens involved in the global economy with low-cost peer-to-peer transactions and no intermediaries. This would increase financial inclusion. The corruption in these countries makes an easy argument for blockchain in itself. It can be used to have secure and transparent record-keeping which increase accountability and decrease the risk of fraud and corruption. In addition, having blockchain would enable the people of third-world countries to create an economy of their own. Think about it. Because you can have peer-to-peer economic activity, you can also start a decentralized marketplace where buyers and sellers would be directly connected. This incentivizes entrepreneurship and innovation.

4. Voting Systems

Without getting political, it is essential that democratic countries keep their voting process free and fair. Imagine we could have a tamper-proof record of all votes for an election. I know just the thing. Not only that, blockchain could enable remote voting while still keeping it secure and transparent. A blockchain-based voting system would also eliminate delays as you can set up a real-time vote counter. At the end of it all, you would have an auditable record of voting data to assess the integrity of the election.

These are just 4 of the many use-cases for blockchain in the real-world. It is a powerful technology that has possibilities beyond what is often talked about. Of course there is excitement for innovation of gaming and digital collectibles on blockchain because they are fun. It is also enticing that someone can deploy a with a dog on it and you can become an overnight millionaire. However, there is some less “sexy" stuff that gets less limelight. The fundamentals of the technology are strong. It feels like the AI push happening in parallel with blockchain is going to account for some drastic innovation in the coming years. If you want me to cover more blockchain use-cases, comment below. Feel free to comment any other topics you be interested in seeing me write about. Thanks for reading, see you next week.

- Zach

Weekly Book/Podcast Recommendations

• The Truth Machine: The Blockchain and The Future of Everything by Michael J. Casey and Paul Vigna

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