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State of the Chain: Five Winning Use Cases for Blockchain in 2019

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  • Heewon Jang
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    The article explores the main industries that are being disrupted by Blockchain in 2019

State of the Chain: Five Winning Use Cases for Blockchain in 2019
Cover image via freepik.com
Contents

Whatever you think blockchain is, it isn’t. That’s a succinct way of summarizing the state of crypto networks today. The fact that the use cases and narratives surrounding base layer protocols is constantly shifting should not be taken as evidence of vaporware in search of a cause; rather it’s a sign that this is still early, and everyone’s still trying to figure out what blockchain is good for, and what else it can do that we haven’t yet envisaged.

Bitcoin started out as peer-to-peer cash before evolving into digital gold, with some pit stops along the way during which it hosted colored coins, had its blockchain component extracted for enterprises, and was used to secure lesser chains through the security of its Proof of Work algorithm. It’s a similar story with other blockchains: Ethereum began life as a world computer, became an ICO launchpad, and is now being used for open finance. There’s no shame in moving the goalposts to capture the true value of emerging technology, and the fact that everyone’s still deducing what blockchain can do attests to its myriad possibilities rather than a dearth of imagination. Here are five emerging use cases for crypto networks that are likely to shape the narrative through H2 of 2019 and beyond.

Wink.org
Screenshot source: https://wink.org/

Use case 1: eGaming and Betting

First things first: gambling isn’t a new use case for blockchain. Satoshi Dice was one of the first sites where bitcoin could be spent, while Satoshi himself hid the remnants of a poker client in the first Bitcoin code release. It might not be shiny new then, but crypto gambling has at the very least evolved this year, and at a rate of knots. As proof of this, a glance at DappRadar.com’s rankings tells you all you need to know: the third, fourth and fifth most popular dApps from the 2,500+ recorded by the site are all gambling applications, and the two most popular of these are on Tron.

Tron has quietly evolved into the gambler’s network of choice, with EOS coming in a distant second. The most popular dApp in the world right now, WINk, has recorded an astonishing $42.3M of volume over the past week, a figure that would put even the most flourishing of online casinos to shame. 5.7M transactions over the same period and 2,800 users a day attest to its popularity. Of course, WINk’s IEO on Binance Launchpad last month didn’t harm its cause either. Tron gambling dApps RocketGame and Dice have also recorded robust numbers, while six of the top 10 Tron dApps pertain to gambling. Case closed.

Dapp rankings
Screenshot source: https://dappradar.com

Use Case 2: Lending

Crypto lending isn’t new exactly either, but it sure feels new, what with all the brouhaha this week over lending platforms. Predictably it was Binance that stole the limelight, with the surprise launch of its eponymous lending platform, which was unveiled on Monday, August 26, and then proceeded to fill its initial lending quota of 200,000 BNB and 10 million USDT in a matter of seconds two days later. Binance is by no means the only platform to have latched onto the possibilities afforded by crypto lending, either: in the past fortnight, Dharma and Compound have announced new products, while Coinbase has hinted that this will be the next vertical it expands into.

Crypto lending actually makes a lot of sense, both from the perspective of lenders and borrowers. Lenders can enjoy annualized interest of up to 15%, which is significantly better than the negative rates they are currently offered on fiat savings and on negatively yielding government bonds. Freed from the baggage of the legacy financial system, crypto holders are incentivized to put their assets to use, earning them a return while helping to fund the next wave of entrepreneurs and crypto startups. Crypto lending feels like one of the most natural use cases for blockchain, one which will help the space further establish itself as a fully fledged financial system in its own right.

Use Case 3: Dispute Resolution

Crypto networks are only as strong as their weakest link – that’s right, their people. While blockchain nodes are more than capable of reaching consensus, the same can’t be said of the people accessing them, who are prone to falling out at the drop of a hat or getting embroiled in protracted disputes over the rightful ownership of crypto assets. The solution to this problem, it transpires, is to use more people to settle the matter. But not just any ragtag mob: specifically, it’s a problem that calls for crowdsourced jurors. That’s the game theory behind decentralized justice solutions like Kleros.

kleros.io
Screenshot source: https://kleros.io/

It turns out that crowds, when they’re not serving as braying mobs demanding vigilante justice, are surprisingly sagacious. Combine their minds, provide a suitable economic incentive, and they’re likely to arrive at the correct and true decision. Dispute resolution isn’t sexy, but it’s an extremely useful service for escrow services, prediction markets, P2P trading platforms and much more.

Use Case 4: Digital Identity

Right now, you use separate passwords and logins to access each platform you use on the web. In doing so, you entrust these web operators not to abuse, misuse or lose your data – and frequently wind up disappointed. Digital identity solutions have been developed for the leading crypto networks that ensure self-sovereignty of data, which is stored in pods or containers that are shared with web platforms on an opt-in basis.

Through the use of public/private keypairs, users of Web3 protocols can protect their identity, and prevent the risk of hackers accessing centralized databases to steal all their data. Across every major crypto network, digital identity dApps can be found, attesting to the magnitude of the problem being solved, and the relative ease with which Web3 technology can meet the challenge while providing a viable alternative to passwords.

Use Case 5: Decentralized Storage

A blockchain is simply a distributed database, and like any database, it can be used to store information of any kind. While people have been encoding random information into the Bitcoin blockchain for years, that practice has since become more purposed. There are now crypto networks dedicated to storing information on-chain so that it is always accessible and virtually uncensorable. One example of this is Arweave, whose “Permaweb” enables web pages and applications to be stored on-chain, facilitating the creation of web content that can’t be censored. The risk of data loss is also reduced, thanks to the permanence of using a blockchain to store multiple copies of each record.

As global censorship ramps up, the need for robust publishing measures that prevent dystopian governments from restricting the free flow of information is paramount. In addition to nations such as Russia and China enforcing strict provisions to curtail their citizens’ access to the open web, incidents of deplatforming and censorship in the West are on the rise. Companies such as Gab.com have found themselves frozen out by hosting providers and ISPs, resulting in downtime as they frantically searched for a new home on the web. The permaweb holds out the promise of a solution to the overreach of platform censors and free speech opponents.

The Future of Blockchain

Just as only a handful of visionaries such as Hal Finney foresaw what Bitcoin would evolve into 10 years ago, it is virtually impossible to predict how crypto networks will be purposed in the future. Narratives shift, trends change and use cases enter and exit vogue. While it’s almost certain that there will be demand for the applications outlined here, one decade from now, they’ll be supplemented by many more. No matter how many iterations blockchain technology undergoes, its value proposition will remain unchanged: as an independent database that anyone can access, verify, and trust.

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About the author

Heewon Jang is a freelance journalist and the editor of CryptoGags section.
She is responsible for entertaining crypto content and bitcoin humour

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Why China Fever on Bitcoin is Already Dropping After 1 Month of Blockchain Optimism

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  • Joseph Young
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    The so-called “China fever” on crypto like bitcoin has noticeably declined since President Xi’s speech on October 28.

Why China Fever on Bitcoin is Already Dropping After 1 Month of Blockchain Optimism
Cover image via 123rf.com
Contents

Since Chinese President Xi Jinping expressed his support for blockchain technology on October 28, the so-called “China fever” on crypto like bitcoin has noticeably declined.

The price of bitcoin fell from around $10,600 to $8,500 and cryptocurrencies that are known have Chinese development teams such as NEO, Ontology, and TRON have slightly increased over the past three weeks, but not enough to be described as a speculative mania.

Why demand for bitcoin and other cryptocurrencies is not on the rise

Following the newly established vision of the Chinese government to push the development of blockchain technology, expectations for strengthened momentum of the cryptocurrency market rapidly increased.

Initially, such expectations combined preceded an abrupt overnight increase in the price of bitcoin to above a key “psychological level” at $10,000, but the price fell back to “pre-Xi” levels in a relatively short period.

Global markets analyst Alex Krüger said:
“Have mainland China investors increased their demand for bitcoin? BTC volumes quickly dropped back to pre Xi news levels; online searches in China are back down to pre Xi news levels; website traffic for exchanges catering to China barely changed since the news.

The ‘Chinese tokens,’ NEO, ONT and TRX, have all done well since the aftermath of the news, while VET (a supply chain oriented blockchain) has been cruising on China news. Don't think though this is a sign of a ‘speculative fever’ of any kind.”

The analyst emphasized that prior to the statement of President Xi on the focus of China to facilitate the development and implementation of blockchain technology, the penetration of cryptocurrencies in the region was already high.

Also, most mainland Chinese cryptocurrency investors are said to have been trading digital assets through overseas markets like Hong Kong, purchasing stablecoins like Tether with the Hong Kong dollar.

Hence, it is possible that the public already anticipated the government of China to eventually reiterate its plans to encourage blockchain development with the People’s Bank of China (PBoC) consistently stating that its plans for a state-operated digital currency is in the works.

“It is without doubt that with the announcement of Libra, governments, regulators and central banks around the world have had to expedite their plans and approach to digital assets,” Dave Chapman, BC Technology Group executive director, said.

Is this the end of the Xi-effect?

Some technical analysts have suggested that the upside movement of bitcoin to $10,600 in late October may have not been primarily fueled by the optimism around China’s blockchain development initiative, and that a cascade of short liquidations amidst a build up of sell pressure caused the rally.

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About the author

Joseph Young is an analyst based in South Korea that has been covering finance, fintech, and cryptocurrency since 2013. He has worked with various recognized publications in both the finance and cryptocurrency industries.

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