Written by Mathias Michel who lives and works in Fürth, Bavaria building useful things. Follow me on Twitter
Since 2017 I am interested in the topic Bitcoin and blockchain. Beside the investment possibility I find it exciting how Blockchain can be used and how the world of tomorrow can look like with it. In order to prepare a presentation, I have dealt with the topic in more detail and would now like to pass on my knowledge in a few blog posts. In this post I will first give an overview of the various use cases of a blockchain, in order to then explore the individual areas more deeply in further posts.
Finance and DeFi (Decentralized Finance)
The financial industry will experience the greatest disruption from blockchain because it is characterized by high costs, slow transactions, and unnecessary intermediaries. Another aspect is the centralized and outdated infrastructure, which has resulted in a long period of limited innovation in this area. Bitcoin and the underlying blockchain were invented by Satoshi Nakamoto as a solution during the 2008 financial crisis precisely for this reason. Today, 11 years after the white paper was published, a whole blockchain economy has formed around Bitcoin. Since 2018, the term Decentralized Finance (DeFi) has spread, describing various services such as StableCoins, Trading, Lending or Tokenization of assets.
The raw materials for today’s products are mined all over the world and are sometimes extracted from poor regions where they are mined by children. The end products are then assembled from these raw materials and it is difficult for the buyer to determine whether a product has been produced sustainably.
The transparency and interoperability of a blockchain can be used to verify the quality and origin of products. The exchange of manufacturing, storage and transportation information between multiple companies in the supply chain can help to ensure that a medicine is properly cooled during transportation. Another advantage is the prevention of blood diamonds or counterfeit products.
At the moment, most energy is generated centrally, traded on exchanges and then sold to consumers via large energy concerns. Decentralized energy is also sold to large companies. Another problem is that electricity grids are overloaded and it is becoming more and more difficult to transport environmentally-friendly electricity from A to B. The electricity is produced locally and then sold to large companies.
The combination of IoT, Blockchain and Smart Contract can help to build so-called Smart Grids. This intelligent power grid Electricity promotes the local generation of electricity. This electricity could then be traded directly on a peer-to-peer platform, which could reduce unnecessary intermediaries and make the electricity price cheaper.
There are more domains
In addition to the industries mentioned, there are other applications such as in the insurance industry, in the prediction market, medical industry or in the gaming industry. I plan to go into more detail in further blog posts and to look more closely at these application areas.