What are Blockchains used for? / What is blockchain used for?

03 Oct 2022

Though we are uncertain about the future of blockchain technology, there have been a few examples of real-world uses for blockchain:

• Payment processing and money transfer

The most logical application of blockchain is to accelerate the transfer of funds from one party to another.

Bitcoin acts as a blockchain payment processor, allowing for borderless, anonymous cryptocurrency payments in a matter of seconds. Payment processing using blockchain is also less costly since there is no third-party intermediary.

For instance, PayCEC charges customers 1.5% per cryptocurrency transaction, while the figure for each card transaction is 3.4%.

• Digital IDs

The latest data from the World Bank shows over 1 billion people lack an identity document, which prompted Microsoft to create digital IDs within its Authenticator app.

It would allow people in low-income regions to access healthcare and financial services or start their businesses. Of course, the company’s attempts to digitally verify personal identities are still in embryo.

In several countries, married women must name their husbands, and unmarried women must declare their marital status to register a birth. That is when a startup called AID:Tech, founded by Joseph Thompson, utilizes blockchain to solve the problem.

“We’ve got projects in Tanzania where we had the first baby in the world born on the blockchain,” says Thompson. “The mother who gave birth – she owned the data for the child. So she was building a data credit profile. She could prove she got the right medicine.”, he adds.

• Data sharing

Using a channel formation scheme supported by distributed ledger technology, several companies have succeeded in protecting data privacy.

In 2017, IOTA Foundation announced the release of the beta of its data marketplace, demonstrating that blockchain could act as an intermediary to transfer, buy and sell unused data.

IOTA attracted over 35 brand-name participants, including Deutsche Telekom, Bosch, and Microsoft, despite being in its early stages.

• Copyright and royalty protection

As exposure to the internet grows, copyright infringement has gone rampant. Thanks to blockchain, intellectual property law would be strengthened, ensuring the artist or creator gets fair royalty payments for the reproduction of their original work.

For example, NFTs or non-fungible tokens are cryptographic assets that enable artists to profit from their paintings. Digital artworks sold as NFTs are unique and will always be unreplicable, thereby costing a fortune.