It’s a good question. Blockchain technology has been hailed as one of the most revolutionary pieces of new technology ever to grace mankind. The blockchain was invented by the mysterious and legendary Satoshi Nakamoto with one objective in mind: to have it as the underlying technology that allows for the creation of a digital currency that would end up doing away with the traditional fiat currencies and with the conventional banking and money management system.
So cryptocurrencies were the reason for the blockchain to be created. They are still the blockchain’s primary application, but even that application has evolved over time. Vitalik Buterin created a second-generation blockchain implemented as Ethereum which was more than the substrate for a digital asset. It’s a programmable platform that allows for the development and deployment of smart contracts and decentralized applications.
Then arrived third generation blockchains (Tron, EOS, Steemit, and others) which include a native cryptocurrency in the network but that are not all about supporting a coin. Tron, for instance, wants to use blockchain technology to decentralize the world wide web. The Tron Foundation also bought BitTorrent a few months ago, and it’s working hard to merge BitTorrent (the world’s largest decentralized and P2P network by far) into Tron’s blockchain.
So far we’ve described the following use cases for blockchains besides issuing cryptocurrencies: smart contracts, decentralized apps, content sharing through BitTorrent and web content decentralization. But there’s a lot more. There’s a web site that uses a custom-made blockchain to feed chickens in farms, just to give you an example of a use case that’s 100% down to earth and in an industry that’s not very usually thought to be very tech-savvy.
What else is there? David Schwartz speaks
Blockchains are powerful, versatile, and very new in the world. They empower computers and the internet in a way we’ve never seen before so it would behoove us to wonder what else they could do that they’re not doing yet.
The Quora website asked this question recently, and they had a new answer authored by one of the world’s foremost authorities regarding blockchains. We refer, of course, to David Schwartz, Chief Technological Officer for Ripple.
Mr. Schwartz has been working on blockchain technology for years, and he’s the man responsible by Ripple’s astounding success (at least about the technical part), and he’s also responsible for keeping Ripple’s blockchain network current, updated, and working correctly. While he’s not the project’s founder (let’s not forget that the actual founder left Ripple behind so he could start Staller Lumens), Mr. Schwartz’ work is critical for Ripple, and his expertise is beyond any doubts.
So what did he answer? We’ll tell you.
Currently obvious uses
Settling payments and storing value would be the most evident use cases for the blockchain according to Mr. Schwartz. This, of course, is quite obvious as it was the way the blockchain ball started rolling and it remains the technology’s primary application.
Then expanding a little the blockchain’s power within the same industry it’s useful in settling securities, trade finance, lending and all kinds of other financial applications that are a tiny bit more complex than a simple payment system. Those instances are payment and a little additional feature that can also take advantage of a blockchain.
Thus, such apps can evolve to become more workable as the payment system, which is at the heart of such operations, is better, faster, more reliable. Mr. Schwartz explained that Ripple has been focused on settling international payments for years (since its inception, really) because of that reason.
But those use cases are not in the future. Among the applications mentioned in the previous paragraph, payments and storage of value have been there since Bitcoin came online, and the other cases are already a reality implemented, among other blockchain projects, by Ripple (and by Mr. Schwartz in person).
The future
If we start looking for use cases other than settling payments, continued Mr. Schwartz, “things can get more speculative.”
Private blockchains could offer zero-knowledge proof to solve problems such as tracking luxury goods, vaccines and all kinds of delicate merchandise or commodities. Zero-knowledge proofs are an application of cryptographic technology (and let’s not forget that blockchains are cryptography-based) that allows two parties to settle a discussion regarding what one of them can do. It works like this: let’s say you and I want to do business together.
But before we get the ball rolling, you need to know if I have the expertise actually to do what I say I can do. Traditionally there are two ways of dealing with a situation with this. You can trust my word, or I can give you a demonstration. Both options are detrimental to one of us. If you believe my word, it’s possible that I’m not as good as I said, so you’ll be involved in a losing partnership for you.
On the other hand, if I give you a demonstration and you observe carefully what I’m doing, then you could learn to do it yourself, so I’m no longer needed in the partnership, and I lose an opportunity to do business.
Cryptography solves this situation with zero-knowledge scenarios. In this context, I would be able to show you I can do what I say in a way that you wouldn’t need to have any doubts at all, but without you learning any of the details of what I’m actually doing. This is nothing short of magic, and it’s one of the most amazing applications scientists have found for cryptography, but it’s real, and it works. So in that way, we eliminate the need for you to trust me or the risk I have to expose my expertise. And this could be done on a blockchain network.
Another compelling use case would be the ability to create a consortium without all the hard work and complications that usually come with that kind of enterprise.
Mr. Schwartz emphasized the blockchain’s benefits as enhancing security and reliability. The inherent decentralization of a blockchain means that a blockchain computing system doesn’t have a downtime, which is something you can never say about a traditional database running on a central server (even if the server is in a cloud) which can go offline if something happens to the central authority that owns and manages the database.
Also, a blockchain needs not to worry about so-called “bad data” because every node in the network verifies the information in the ledger (the ledger is the pieces of useful data shared and maintained by the system as a whole through a variety of algorithms designed to achieve consensus and guarantee consistency). And this actually makes things simpler and cheaper because you don’t need to put all your resources on a central repository that you need to protect and manage.
So there you have it. Ripple’s answer was short and to the point. But it’s the opinion of an authority so it’s worth to know and to keep in mind what a crypto personality such as Mr. Schwartz is thinking because that’s how blockchain technology could develop in the months and years to come.
It’s all a bit technical and, as he said, speculative. Maybe a little Sci-Fi so far. But remember: before Bitcoin came online the blockchain didn’t exist even as a speculative idea except in Satoshi Nakamoto’s mind so we could see all these things develop and become a reality sometime soon.
Image courtesy of Pixabay.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.