When most people hear news about blockchain technology, they generally think of the $200 billion Bitcoin market first. Certainly, this volatile and currently valuable digital currency has made the news and attracted attention from investors and speculators. While blockchain technology powers Bitcoin, many successful blockchain applications don’t involve alternative currency.
Five Ways Blockchain Technology Could Affect You
Just last year, Harvard Business Review made the case that Bitcoin and other digital currencies may only offer the first driver apps that will power blockchain development. You might understand something about how blockchain works as a decentralized storage and transaction platform. You may not have considered the very dramatic ways that this evolving technology could impact your life very soon:
1. Real Estate Development and Other Physical Assets
What does this new technology have to do with one of the most traditional ways of building wealth? A lot more people would probably invest in real estate if they didn’t suffer from barriers to entry like needing a stake of several thousand dollars and long-term liquidity loss. Companies like Bankex have solved these problems for investors and made it easier for developers to attract financing for riskier real estate development with blockchain tokens.
Each blockchain token represents an investment in a set number of square meters in the project. Investors can buy and sell at will, and the tokens increase in value as the project progresses. They even use smart scanners to monitor development progress and report back to the blockchain where investors and developers can view this transparent information.
Other projects have used similar principles to allow investors to own a share of physical property, like gold, by buying tokens. These tokens each represent a quantity of the physical asset, but they make it easy to buy and sell without actually taking possession or paying high broker fees.
2. Blockchain-Backed Social Sites
One complaint expressed about large social networking sites like Facebook is that their users aren’t actually their customers; instead, the users are actually products who produce the content and engagement that helps attract advertising money. Steemit.com strives to change the paradigm by allowing posters and platform contributors to earn money for their content and development. Members can earn from and invest in the platform either by buying Steem currencies or contributing.
Besides the main platform, a number of other decentralized social sites, apps, and even shopping sites have sprung up to take advantage of the Steem blockchain, the currency, and the invested members. Instead of having to invest in their own databases and incentives, developers can simply overlay their work on top of the Steem blockchain.
3. Smart Contracts
Deloitte explored some benefits that make smart contracts a very highly anticipated blockchain application. This decentralized and secure technology can record every piece of information about a contract right down to the second it happens. Right now, smart contract tech may not have matured enough to make them common; however, that’s the goal of some very big players.
Consider some examples of smart-contract applications that Deloitte has been testing:
- Term life: Term life insurance contracts offer a fairly straightforward case because the events that happen to trigger payouts are already clearly defined by the insurance policy. Blockchain technology might also be applied to other kinds of insurance to reduce costs and improve transparency.
- Shipping: Shipping cargo may involve several different intermediate parties who handle various payments and parts of the transaction. Savings of even a few dollars by handling some of these steps on each shipment should add up when multiplied by thousands of shipments.
4. Blockchain and the Sharing Economy
The Brookings Institute predicted that the sharing economy will grow to well over $300 billion with the next decade. A lot of that growth came from such transportation and real estate companies like Uber and Airbnb, but it’s also easy to find examples in businesses like P2P financing, content production, and many others.
Decentralized storage and processing, such as the blockchain offers, appears perfectly suited to an economy based upon P2P transactions with little intervention by an intermediary company. Forbes provided some excellent arguments about ways that blockchain technology can help it grow even larger and faster just because blockchain apps are naturally decentralized and can be made efficient, secure, and transparent.
How Will Blockchain Help Grow the Sharing Economy?
Blockchain storage can record all transactions. At the same time, decentralized processing can help these transactions to become self-executing.
- Let’s say you want to rent your vacation home via a P2P property site.
- Nobody needs to stay onsite to greet guests because the smart technology could send a code and activate an IoT lockbox right when the tenants signal their arrival.
- Once the guests have picked up their key, the system sends you a payment.
- After the guests leave, the system can secure the home, reset the code, and maybe even trigger a call to a cleaning or maintenance service.
One other good example of blockchain and the sharing economy has already been demonstrated by an organization called the Brooklyn Microgrid, according to the New York Times. Taking advantage of solar energy offers many benefits, but getting started with solar panels takes a considerable investment. With this project, some individuals and businesses can invest in solar power for themselves; however, they can also generate revenue by selling excess supply to their neighbors. This project is just getting started, but it’s already provided a noteworthy example that other communities may model.
5. Enhancing the IoT
Several of the examples above used smart, Internet devices in conjunction with blockchain technology to maximize benefits. While the IoT can help with blockchain applications, the blockchain can also help enhance the value of smart devices. For example, IBM believes that blockchain technology will provide them with the next generation of transaction recording and processing systems.
IBM already uses Watson AI with blockchain technology to gather and act upon data from such devices as barcode scanners, device reports, and even manual entry. To bring this closer to home, your next thermostat or other appliance may be able to connect with a blockchain system to alert you to maintenance issues, keep track of energy use, and even order supplies for itself. IBM views benefits of using blockchain technology with the IoT to include trust and transparency, reduced costs, and faster and more efficient transactions.
How Else Can Blockchain Technology Add Value?
This post only skimmed the surface of blockchain applications that are already developed or currently being planned. It also omitted some exciting new developments in medicine and outer space because they were less likely to directly impact the audience. While Bitcoin and other digital currency have generated the most news lately, other kinds of applications may already benefit you or will in the near future. Perhaps the next big blockchain technology hasn’t been thought of yet, or perhaps it’s one that you’re already working on.
Learn more about how blockchain is transforming the Internet of things.