Blockchain Applications: Think for Yourself!
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It can be challenging to understand how applications arise from “that thing called Blockchain. That thing that is nothing more than a distributed database of transactions with instant global consensus”. Let’s give a shot at creating a framework from which Blockchain applications can be understood or even deducted/created/invented!
All Blockchain applications are the result of a combination of elements coming from three categories: assets, owners and Blockchain capabilities. You can make a venn-diagram with these three categories and the Blockchain applications will set on the central intersection part.
Let’s have a look at these three categories!
The assets can be anything on which you have a right. For instance, it could be a vote, a car, a share, a piece of land, an identification, a house, a title, a piece of art, a written piece, a patent, a trade good, a raw material, … and we can go on like that, listing any kind of asset available in the world.
The category holding the type of owners includes any kind of legal entity, more specifically and non-exhaustively, natural persons, corporations, governments, foundations, associations, supranationals and so on.
The Blockchain characteristics are fundamental to its design. A Blockchain is immutable, transparent, unchangeable, global, distributed, programmable. It enables instantaneous transfer of assets between peers and creates general -almost instantaneous- consensus around these transfers. In the same way, a Blockchain is a single unique source of truth.
The revolutionary and disruptive character of Blockchain resides in the possibility to COMBINE any of these elements in an efficient and value creating application.
Take for example the ownership of official state documents by a government. Now, combine that with the immutability & transparency of a Blockchain. The result is a transparent and immutable management of public works, with fraud reduction as a direct consequence.
The combination of a financial instrument like a put option owned by an individual with the Blockchain capabilities of programmability and immediacy yields an option that executes and settles automatically at the moment a certain price threshold has been reached.
Let’s have a third and last example:
Take the international trade process as an asset, import and export corporations as the owners of that process and the global consensus as the Blockchain capability. Mix them together and you have an international trade process, where everyone has only one absolute source of information, thus eliminating as such the need for reconciliation and the hassle of many litigations.
Well, we did it! In essence, we created a framework that allows to put applications in their context or even to innovate new applications ourselves.
Have a try! Take arbitrarily elements out of the three categories and mix them together. Afterwards imagine what comes out of it as value creating application! Then, give it a shot in the comments below this article!
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