Blockchain technology involves the use of a decentralized, distributed ledger of transactions on a peer-to-peer network. One of the main reasons this discovery has been so revolutionary is that for the first time, people can do things in the digital world without needing a third-party intermediary.
Bitcoin, for example, allows people to send value to one another independent of any bank or payment app needing to process the transaction. In similar ways, many different blockchain applications have been popping up in recent years, attempting to create new-and-improved versions of many useful services.
The Impact of Blockchain Applications
The potential applications of blockchain are almost endless. For the first time, decentralized, peer-to-peer networks can be created using transparent, immutable ledgers of transactions. People can perform actions on a network without needing permission, in ways that everyone can see and agree upon, and those actions can be solidified securely on the blockchain.
Anything that can be improved by eliminating reliance on a third-party intermediary probably has one or more blockchain use cases available. Creating decentralized networks and databases opens up a world of possibilities that few could have imagined prior to the invention of Bitcoin back in 2009.
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Common Blockchain Use Cases
Today there are countless applications of blockchain, and many more that have yet to be discovered. Here is an overview of nine of the biggest and most eye-catching blockchain applications being explored in 2022.
Smart contracts are part of what makes many other blockchain use cases possible. Smart contracts constitute a programmatic agreement between two parties. The contracts exist on the blockchain and can’t be altered.
The resulting transactions are also processed by the blockchain, meaning they happen automatically without the need for a third party. The contracts only execute when the agreed-upon conditions are met.
The use of smart contracts has given rise to a wide variety of blockchain applications. Insurance companies, healthcare companies, governments and more are all looking at ways to use this tech to their advantage.
One of the biggest crazes in crypto and blockchain applications in 2022 might be decentralized finance (DeFi).
The goal of DeFi is to give users control by using blockchain technology and open source coding to facilitate traditional financial services in ways that do not require a bank.
Peer-to-peer lending, for example, has been a big hit with the DeFi crowd. Instead of getting a loan from a bank, using DeFi, people can make loans to each other in the form of cryptocurrency and other digital assets. The terms of the loan will be enforced by programs written in smart contracts, holding both parties accountable.
Decentralized Virtual Private Networks (VPNs)
A virtual private network (VPN) creates some additional privacy and security for a user’s activity by passing all web traffic through an encrypted tunnel. The traffic is routed through the VPN’s servers before reaching its destination, masking the host IP address in the process.
One of the newest blockchain technology applications is the creation of a decentralized VPN, like the one created by the Orchid network.
With Orchid, users can purchase private bandwidth from other users who provide it, and pay with cryptocurrency. This way, there is no centralized service provider who could either snoop on user activity or be compromised in some fashion.
Decentralized Internet 3.0
Blockchains like Tron hope to create an entirely new internet based on the concept of decentralization. Programmers can develop decentralized applications on the Tron blockchain, with the hopes of enabling things like a content ecosystem where users are rewarded for their content.
The Brave browser is another crypto project that is helping to decentralize the internet. Instead of targeting users for advertising through tracking cookies, Brave lets users opt-in to which ads they’d like to see. And using the Basic Attention Token (BAT), Brave users can send BAT tokens directly to content creators they like.
This may be one of the most compelling and straight-forward blockchain use cases: Blockchain could make the possibility of voter fraud a thing of the past. People could cast their votes digitally in a way that could not be altered and could be seen and verified by everyone.
Medical record-keeping has already been moving toward the digital realm for many years. With blockchain, patient records could be stored even more securely in a way that would make them impossible to tamper with.
Some companies are even exploring the possibility of sharing healthcare data in a way that remains private yet can be verified by both parties as being true and accurate.
Supply Chain Management
Using blockchain, businesses could zero in on inefficiencies within their supply chains while also being able to know exactly where any item is at any given time. The immutable record kept by a blockchain could also allow businesses and consumers to verify information like how products were tested and where they came from.
Companies like Microsoft are working on ways to create blockchain applications that would create digital IDs within an authenticator app, giving users full control of their digital identities. This could allow people in impoverished regions to gain access to the financial system, healthcare, various areas of industry, and so on. Like many blockchain use cases, Microsoft’s efforts to create a decentralized digital ID are still early and ongoing.
Equity and Currency Trading
Decentralized exchanges (DEXs) have been gaining large amounts of trading volume recently. These exchanges function autonomously, without a centralized party overseeing them, similar to how smart contracts work.
A DEX allows individuals to come together and trade assets like cryptocurrencies or equities. This trend could one day revolutionize the way people buy, sell, and trade assets of all kinds.
Future Blockchain Technology Applications
There’s no real way of telling what other blockchain applications will be developed in the future. The possibilities are numerous.
One potential future blockchain application is the creation of central bank digital currencies (CBDCs). The Federal Reserve, People’s Bank of China, and other central banks around the world have recently announced their plans to create their own digital currencies. The coins would likely be issued on centralized blockchains controlled by the central banks themselves, giving them greater control over monetary policy and the financial system at large.
Blockchain technology applications like these are only the beginning. Many people are optimistic about the positive changes that blockchain uses can bring into the world. Still, many of the promising projects are still in the early stages of development, and widespread use of them in a meaningful way could still be years away.
Photo credit: iStock/Svitlana Hulko
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