Real Use Case of Blockchains

Real Use Case of Blockchains

Matthew Di Ferrante, a developer at Ethereum Foundation, talks about the real use case of blockchains. To give our readers a perspective on this matter, Finrazor further provides an overview of current adoption of blockchains at enterprise level.

September 11, Matthew Di Ferrante published Blockchains as a Public Good. In this article, the developer shares his outlooks on adoption of blockchains and explains why private blockchains contradict the fundamental principles of blockchains.

Blockchains, or as Matthew prefers to call them ‘utility chains’, have four core properties:

  • censorship resistance (nobody has unilateral control over data);
  • ubiquitous access (data is public);
  • protocol rigidity and stability (fundamental rules never change);
  • public infrastructure (anyone can view, download, and modify source code).

These four properties are the essential features of blockchains. This implies that the real use case for utility chains comes out of the absolute necessity for these four properties.

Many take blockchain software or architecture, which is tailored to maintain the four properties above (again, at great efficiency cost) and try to apply them to private networks, where the properties are unnecessary or even undesirable (censorship resistance is not desired in banking, for example, and neither is open access to data). Many current 'blockchain projects' would be better served by just databases and good development practices.

Matthew Di Ferrante, developer at Ethereum Foundation

To elaborate his point, Matthew draws an analogy with the Internet. The Internet is a global network with millions of users. Even though everyone acts out of their own interest on the web, the system is healthy due to common laws and general agreements. This is because being part of the Internet brings much more value than having a separate private network with different rules. And like the Internet, blockchains need to be used a public good in order to get the most use out of them.

So now we see that the internet, like 'blockchains', is not a zero-sum game. Just as with networked devices, the whole is greater than the sum of its parts. Until you have an internet type standard, which everyone (or most) agree on as the standard and 'main' system, all private versions of it are more or less useless to anyone but the parties involved, and sometimes mostly useless to even those parties.

Matthew Di Ferrante, developer at Ethereum Foundation

However, unlike the Internet which is just a standard for sending and receiving messages, blockchains ‘represent and prove digital events, and serve as a source of truth for them’. In this aspect, blockchains are a much more powerful tool than the Internet, and an intermediate (however scary that word may seem to a crypto enthusiast) utility chain can help unlock the full potential of this tool.

Until there is a public, agreed upon utility chain that ties all the different uses cases, players and systems together, all the 'enterprise, private blockchains' are a waste of time at best, with the only exception being maybe finance, but SWIFT is so bad that more or less anything else would be massively better.

Matthew Di Ferrante, developer at Ethereum Foundation

The main utility chain may become the source of universal truth, but before it does so it must prove its reliability. This means that the chain will have to face legal challenges related to different interpretations in different countries.

When the world is ready to adopt such a standard, then the real 'adoption' explosion will come, like your shipping company providing a proof of delivery that can be checked on a utility chain that can release a deposit without needing to rely on paypal (or similar) for dispute resolution/escrow, or delayed flights being automatically compensated without the need for third party oracles or insurers.

Matthew Di Ferrante, developer at Ethereum Foundation

Update on Corporate Blockchains

To bring our readers up to speed on enterprise blockchain adoption, we have prepared an update on how corporate giants are exploring blockchain technology.

Google

The search giant recently partnered with two blockchain companies, Digital Asset and BlockApps, to leverage distributed-ledger technologies in enhancing Google’s Cloud Platform.

Digital Asset develops distributed-ledger solutions for the fintech industry. BlockApps provides a platform for building decentralized applications.

Also, just a couple of weeks ago Google added Ethereum to its big data analytics platform BigQuery with the Bitcoin dataset already present on the platform. Google explains this decision by pointing out the drawbacks of Ethereum software API which provides only basic functions such as checking transaction status and looking up wallet balances. With the addition of the Ethereum dataset to BigQuery, users will be able to view the blockchain data ‘in aggregate’. Google’s data visualization will be useful in making business decisions.

Facebook

We have yet to hear from the social media giant any substantive news related to its blockchain endeavours but something is definitely brewing in Facebook’s blockchain department. Led by former member of Coinbase board of directors David Marcus, the team is exploring the use of blockchain to improve data security and user privacy.

A couple months ago Evan Cheng, one of Facebook’s senior engineers, joined the blockchain team as its first ‘director of engineering, blockchain’.

Facebook is also looking for a ‘Head of Business Development & Partnerships — Blockchain’, which is yet another sign that Zuckerberg is pretty serious about integrating blockchain technologies.

Apple

Yesterday, the world biggest company by market capitalization announced its new smartwatch and three new iPhones. Leader of the smartphone industry Apple does not want to miss out on the blockchain craze either, though it tries to keep a low profile.

Last year Apple submitted an application to the U.S. Patent and Trademark Office to patent a program that will combine aspects of blockchain technology and Public Key Infrastructure tools. This software will be part of Apple’s ‘multi-check architecture’. How this system will be used is anyone’s guess. Knowing Apple, we can say that they rarely jump at new technologies and prefer to take their time and explore them before they are ready to implement them.

Walmart

Walmart, the U.S. retail giant, is a regular customer at the U.S. Patent and Trademark Office. Walmart’s recent patent application describes a blockchain-based authentication system for delivery drones. Check out our article for more information.

Previously Walmart applied for a patent for a delivery management system powered by the blockchain technology. The system will use smart delivery lockers that will keep items safe until the customer signs and collects them. Each locker will be a node in a blockchain network and will send data to the blockchain.

This is only one out of a range of blockchain applications that Walmart is looking into. Walmart is seeking to enhance their live food supply chains be leveraging distributed-ledger technologies. This June Walmart was awarded a patent for a wearable device that stores user medical records on a blockchain.

FedEx

Logistics giant FedEx repeatedly said that blockchain technologies will change worldwide supply chains. FedEx is collaborating with other logistics companies under the Blockchain in Transport Alliance to enhance customer service and set industry standards for using the technology.

FedEx’s interest also includes the Internet of Things in that they are now experimenting with a small bluetooth-based tracking sensor called Tron, which will improve the supply chain security and transparency.

BYD

BYD, the world’s biggest electric car manufacturer, recently partnered by VeChain, a blockchain platform and cryptocurrency.

In an effort to address ecological problems, BYD introduced a carbon banking solution. This system utilizes VeChain’s automobile lifecycle management solution that encompasses nearly every branch of the automotive industry.

‘This carbon bank solution rewards vehicle operators with carbon credits based on their vehicles’ driving performance and carbon reduction. This solution provides the tools necessary to construct a blockchain-based ecosystem aims at reducing the global carbon footprint’. The carbon footprint data will be stored on VeChain’s public blockchain.

Conclusion

Last year cryptocurrencies gained a lot of attention and became one of the more discussed topics in tech industry. 2017 saw an abundance of ICOs and a big bull-run of the market. This year’s bear market seems to have brought the community back to earth and raised serious questions about blockchains in terms of their adoption and regulation. More people have come to appreciate blockchains as a breakthrough technology. For now, adoption is still making baby steps but this year surely has to have something in store for us yet.

By continuing to browse, you agree to the use of cookies. Read Privacy Policy to know more or withdraw your consent.