At present, we are witnessing the widest and fastest technological innovation in human history. Blockchain sector raised $20+ Billion dollars in 2018 to create the fastest profitable Unicorn in history (Binance, a crypto-trading platform). Promising tech needs overvaluation to succeed (as observed in the dot-com bubble). It now flaunts a use case to disrupt every existing industry and all that in less than a decade.
The gold rush is over and the crypto-winter (decreasing value of crypto assets) isn't going away anytime soon. These are good signs. Downtrends flush out the companies built on hype and use cases, leaving room for solutions. Only a handful of blockchain ventures will make it to the next decade. It'd be interesting to see which markets they will take over.
If you're new to Blockchain, let's first start with…
Internet vs. Blockchain: The Fat Protocol
The Fat Protocol analogy is one way to differentiate between the Internet and the Blockchain. The internet created less monetary value at the protocol level and most of the value got captured at the application level. That created a barrier to entry in the long term and gave rise to monopolies.
The blockchain creates more value at the protocol level and collective value of the applications is always less than the total value of the blockchain. The computing power of the public blockchain is not owned by anyone, the data stored on it is owned by the individuals and that locks in the value at the protocol level. Thus, the barrier to entry is very low for new players.
Fundamentally, the blockchain benefits those who create value for the entire ecosystem, plays fair, and hold the crypto assets. The internet benefits those who make an early entry to a new market, lock in the data and users, and make it harder for a new player to sprout.
There's a myth that the commoners need to understand blockchain and cryptocurrency in order to make use of it. It's like asking people to learn the SMTP (simple mail transfer protocol) before sending emails.
So, here are a few ‘real life' use cases to watch out for, courtesy Blockchain
In the recent past, several state assembly elections in India were questioned by the opposition of tampering with the voting machines. The two ways to prove the legitimacy of elections are either re-elections (which is unaffordable) or making the results public (death of free-will and democracy). But there is another way out, that is blockchain based voting (still possible for the 2019 elections!)
Sierra Leone, a country in West Africa conducted world's first blockchain-powered elections. The tech, created by Leonardo Gammar of Agora, anonymously stored votes in an immutable ledger, thereby offering instant access to the election results.
“Anonymized votes/ballots are being recorded on Agora's blockchain, which will be publicly available for any interested party to review, count and validate,” said Gammar. “This is the first time a government election is using blockchain technology.”
If other countries will switch to the better alternative, we are not too far away from seeing results on the same day and have the ability to anonymously verify our own vote through our voter Ids.
What brings the highest engagement and user adoption to the Internet? Social Media (Facebook, Twitter, YouTube). This industry mastered the habit loop (trigger, action, reward, and investment) over the past decade. These are the hardest platforms to leave because we invested years to build our profiles. The only way out is to build a new profile on new platforms from scratch.
Steem blockchain and Synero are social blockchains that can be leveraged to build social media 3.0. The data is not owned by the Dapps, but it is locked in the blockchain itself. They also enable the simplest path to content monetization.
Every like on a Steem based platform is worth some Steem tokens and users earn actual money for sharing valuable content on the platform. 1Ramp.io (built on Steem blockchain) is a social media for creators and artists, where they can earn money by sharing their work.
The money from advertisers can directly go to the creators and no central authority can leverage the hard work of the users. 1Ramp is also building a feature through which the artists can embed their work in a non-fungible token and instantly sell the ownership to the interested buyers.
Monetization on social media, data ownership for the users, zero-censorship are happening for the first time in the social media space. This industry has the potential to connect millions of people with real blockchain applications.
Non-fungible tokens [Digital Ownership]
The cryptokitties and rarebits.io show us a lot more than crypto-fanatics throwing real money at virtual goods, it indicates that the virtual ownership exists. All these platforms are built on a protocol called ERC-721(based on Ethereum), which enables uniquely identifiable tokens called NFTs or Non-fungible tokens. This new asset class has the ability to represent digital ownership, tradable and collectible. It can also be used to represent physical goods in the virtual world. There is a saying that if nothing works in the blockchain the NFTs will stay.
“Dubai [will be] the first city fully powered by Blockchain by 2020″ – smart dubai. Dubai is strategically forming 3 pillars: Government Efficiency, Industry Creation, and International Leadership.”
Estonia took a more inside-out approach by building e-estonia and is gradually moving towards what they call Industry 4.0. They have been investing in building blockchain powered efficient and transparent solutions since 2008. Other countries will also follow their footsteps to replicate similar efficiency. The companies who are building solutions for the governance have high responsibilities and greater opportunities ahead.
Supply chain the blood that keeps our global village functioning. We ship everything, from tomatoes to plastic on a disconnected legacy system. The tracking of cargo at various stages, provenance of the source, and reporting of missing items are among the biggest challenges for the industry.
FedEx, Samsung, and Walmart are few of the companies investing in the blockchain tech. Traceability and transparency are some of the most important foundations of logistics. The blockchain allows all the participants in the shipment network to maintain a single ledger of shipment records, eliminates the need of human trust, and provides efficient traceability.
Cloud Computing and Storage
This is a heavily monopolized industry where we've got a dozen providers powering up more than 90% of the Internet. At present, the blockchain powered alternatives are not powerful and scalable to compete with Amazon and Google.
The blockchains which can decentralize these sectors have a huge opportunity. Building stable, scalable, and computationally powerful network of decentralized computers to power up millions of applications is the biggest challenge. There is still a lot of work to do on the protocol and consensus level for high efficiency. The blockchains or algorithms solving these problems have the potential to change this world into an interconnect-decentralized-server.
Filecoin is a decentralized storage provider, by installing this blockchain software you can rent your computer's unused storage and earn coins for it. IPFS (inter-planetary file system) built on Filecoin is used by DTube (decentralized video sharing platform) and its functionality is seamless.
These are very ambitious and opportunistic projects, whose growth in the year 2019 will indicate an overall growth in the Blockchain ecosystem.
What's next for the blockchain ventures?
Technology is the most fluid industry we've ever witnessed. The virtual reality headsets that everyone was bullish about in the last two years are still lying dormant in our bedrooms, and no one is buying them. The flying cars, chatbots, domestic robots etc. didn't come to fruition as predicted. Everyone believed in the 2000's that we will find a cure for cancer in a decade and that didn't turn into a reality too. Same is the case with space travel, we put a man on Moon in July 1969 with computing power 1300 times less than an iPhone 5s. And since then everyone is speculating the Mars landing.
Blockchain and cryptocurrency have opened up new frontiers with the decentralized-digital currency, new (digital) ownership structures, monetization, supply-chain efficiency, store of value, smart contract, ICOs, and governance. The ecosystem development, market adoption, regulations, useful products, and proven business models on the cryptocurrency will decide its path in the year 2019.
Good things take their time, and if you don't want to take our word on it, then always remember what we were told in Toy Story 2 “You can't rush art”.
The authors – Sanil Sachar is the co-founder and partner of Huddle and Rajat Dangi is the co-founder and strategist at 1Ramp. Views are personal.