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3 Cool Uses for Blockchain
July 10, 2020
Preserve your digital identity—and trade baseball cards, too
The hype has died down on Facebook’s Libra, the controversial blockchain-based cryptocurrency, and China’s race is still on to launch a digital currency, but still blockchain affects much more than the finance industry. NASA is exploring ways to use blockchain to enable secure air traffic communication; In the UK, MedicalChain is using blockchain to secure people’s medical files; and Estonia is the first country that has used blockchain to build a entirely digital society.
While distributed ledger tech is being adapted for hundreds of applications, there are a few we think are worth keeping close tabs on. Here are some of the most interesting ways blockchain is being used today.
Self-sovereign identities
Large-scale security breaches have become painfully commonplace: Each year we hear of the high profile cases that have exposed billions of accounts. And since most people have dozens of different online accounts, it seems impossible to entirely protect yourself from digital exposure.
Blockchain may offer an alternative to the current convoluted systems we use for online identification and validation: a “self-sovereign identity.” As a user, you’d have a login similar to the Facebook Connect or Google authenticators that many sites use—except you’d be in control, not a third-party company. It would go beyond social media logins, too: Everything from your passport to your health records could be stored in a decentralized digital ledger.
Experts haven’t agreed on the best way to approach SSIs. The international nonprofit Sovrin Foundation is developing distributed ledger tech that’s specifically built for identity authentication. Others think building on top of an established decentralized blockchain is the way to go: Microsoft has its Identity Overlay Network that runs on top of the Bitcoin blockchain; if it’s successful, it will offer a truly decentralized SSI to anyone who wants one.
Asset tokenization
What if you could track ownership of just about anything online?
You’re probably already familiar with the term “tokenization”—it originated in the data security world and was used to describe an identifier, or token, that would represent private data. In blockchain terms, tokenization is the use of digital tokens to represent real-world assets that range from real estate to gold. Ethereum, one of the major blockchain players, has developed a programmable blockchain and “smart contract” technology that can encode items in addition to basic units of monetary value.
These tokens fall into two main categories. Utility tokens give their owners access to a future service. The web browser Brave uses its own utility tokens, called “Basic Attention Tokens,” which you can earn by viewing the hand-selected ads on their platform; you can then send the tokens to your favorite content creators within the network as a gratuity or tip. Then there are security tokens, which represent different kinds of investments, such as shares and voting rights in a company, physical assets, or intellectual property (such as music royalties). Since security tokens often deal with things like stocks, they have to comply with real-world regulations; startups such as Securitize have built their businesses around security token compliance.
Crypto collectibles and gaming
If you handed someone a $20 and they gave you two $10 bills back, it wouldn’t be a big deal since they are both units of the same currency. But if you sold someone a one-of-a-kind baseball card, and later they ripped it in two and returned both pieces to get their money back, it wouldn’t hold the same value to you.
This is the thinking behind non-fungible tokens (NFTs), which are unique digital items tradable on a blockchain. The most famous (and arguably the cutest) is CryptoKitties, a game about buying, selling and breeding unique digital cats, which was so popular when it debuted that it crashed the Ethereum network. The most expensive CryptoKitty sold for $117,000 in US dollars, but you can purchase one for as little $20 (or, rather, its equivalent in Ether).
CryptoKitties also opened the door for other NFT-based crypto games, such as Gods Unchained, a digital card game that raised $15 million in seed investments. You can even browse and buy NFTs for sale on OpenSea, an eBay-like decentralized marketplace that sells crypto collectibles and rare digital items. And to take our baseball card analogy full circle, yes, you can spend thousands of dollars on MLB crypto bobblehead "cards."
Crypto collectibles and games are still small potatoes compared to the video games market, which is forecasted to be worth USD 4.5 billion this year; but since these are only the first of NFT-based games, we can only imagine what the future holds.
