Bitcoin Pizza Day, celebrated every May 22, commemorates the first-ever real-world crypto transaction, which took place on that date back in 2010. Two large pizzas were exchanged for 10,000 bitcoins, then worth just $80 and now valued at over $60 million.
Enabling the purchase of an Italian cheese-and-tomato-based food staple is probably not what Satoshi Nakamoto – the masked creator (or creators) of bitcoin, the original cryptocurrency – had in mind when he published his white paper in October 2008, before mining the genesis block and launching the network the following January.
However, bitcoin has spawned 1,500 other cryptoassets, and in turn a multitude of blockchain-backed cryptoassets. The variety and span of their use cases is becoming increasingly surprising and, well, useful. Indeed, in the eight years since Lazlo Hanyecz’s two-pizza purchase, the value of cryptos – both financially, and in terms of benefitting society – has exponentially expanded.
A decade on from bitcoin’s launch, the applications of blockchain – the distributed digital ledger technology underpinning bitcoin – range from verifying the providence of diamonds, or tracking pork (so recalling contaminated food would be easier to do), or even paying your dentist. This is made possible by cryptosassets being transparent and digitally accessible to all.
“I believe they will replace stock markets, most currencies and power everything from machine-to-machine payments and the Internet of Things (IoT) through to streaming media, prediction markets, governance systems, voting systems, and even potentially the internet.”
He adds: “That being said, there is a long way to go; we are in the very early stages for most of these areas.”
These are exciting times, and the potential for transformational innovations generated by cryptoassets is almost limitless. But what is possible right now, and which industries in particular are embracing cryptos?
Here follows seven industries where the most interesting uses of cryptoassets – to date – can be demonstrated.
The original, and most obvious, use case of blockchain technology was cryptocurrency, in the form of bitcoin. Without question cryptocurrency has become an increasingly appealing alternative to traditional financial systems, especially in the aftermath of the crash triggered by the fall of Lehman Brothers in 2008, then the fourth-largest investment bank in the world.
With an inbuilt safeguard against fraud and false identity, greater transparency, plus lower fees for cross-country transactions, and free from government interference, cryptos have begun transforming payment systems.
Banks serve as the critical storehouses and transfer hubs of value. This is why the likes of UBS and Barclays are developing blockchain-based solutions to upgrade back-office functionality and settlement. The Financial Times noted recently that cutting out middleman costs could save the industry $20 billion.
Further, cryptos are catalysing the movement towards a cashless society, and are proving particularly revolutionary in emerging markets. It is estimated that there are approximately 2.2 billion individuals with internet access, via smartphones and similar devices, but without access to a traditional financial exchange, making them prime targets for the cryptoasset market.
“Cryptocurrency will achieve greater financial inclusion for people in developing countries,” says Jimmy Nguyen, Chief Executive of London-headquartered blockchain developers nChain. “They have large unbanked populations with limited access to financial services, because they cannot easily save, store or send money. But with a digital wallet on their mobile phone, ‘the unbankables’ can participate in the digital financial world.”
He continues: “They can electronically save and send cryptos anywhere in the world for mere pennies – rather than paying money remittance fees that can cost up to 8 per cent of the transaction amount – as well as buy goods and services in digital commerce.”
Blockchain-powered cryptoassets lend themselves particularly well to healthcare, and in an industry not normally famed for embracing technology, many developers are beginning to introduce disruptively innovative applications at an impressive rate.
London-based MedicalChain claims to be the first healthcare organisation to employ blockchain technology to facilitate the storage and utilisation of electronic health records in order to deliver a complete telemedicine experience.
In early October 2018, MedicalChain announced that for the first time a cryptoasset – called MedTokens – would be used to access video consultations with a general practitioner (GP). This is made possible through a blockchain-based telemedicine application called MyClinic.com, which is being piloted at The Groves Medical Centre in the capital. The organisation has ambitions to create borderless healthcare, empowering patients to access flexible, safe healthcare and have greater control over their health records.
“Following a successful pilot with The Groves Medical Group … the service will then expand to offer full wrap-around health services across the UK, Europe and then the world,” enthuses Dr Abdullah Albeyatti, Co-Founder and CEO of Medicalchain.
Blockchain technology has the potential to be transformational in supply chains, too, as it offers a transparency and incorruptible method of record-making that was previously unavailable. Supply chains are central to the food industry, and with consumers becoming ever-more concerned about the provenance of what they put in their mouths, applications on blockchain-based platforms – for example at OriginTrail – allow them to know where in the world their purchases came from and how they were produced. As such, on a blockchain, tampering with sell-by dates and adding secret ingredients is impossible.
Cryptoassets are paving the way for new business models in the charity sector, too. Blockchain, thanks to its ability to keep companies accountable, is able to eliminate many problems occurring with charities, such as fund leaks. Moreover, the smart contracts made possible by blockchain technology mean that now you can literally “‘follow the money’, from the point of paying it in to the wallet of a charity right through to the point when it’s paid out for its dedicated cause”.
That is according to Luke Chittock, CEO of Kent-based philanthropic organisation Lifelabs (which allocates 30 per cent of all transactions to charitable causes). “Smart contracts automatically ensure that your money can only be spent on pre-defined goods and receivers,” he explains. “This builds an enormous amount of additional trust for charities and their brands – something that is essential in the world of philanthropy.”
Notably, the World Food Programme (WFP) is using blockchain technology to distribute cash assistance to the hungry in a secure way.
Cryptoassets are great news for environmentalists, as well. On the Brooklyn Microgrid, for example, people who have solar panels are able to sell environmental credits through a smartphone application, to residents who do not have direct access to that renewable energy, thus using less carbon-based power.
Elsewhere, Poseidon, a non-profit that engages in forest conservation, uses a utility token called Ocean, and a smart contract system to manage the complete lifecycle of carbon credits. “Digital assets can be a real tool for good,” enthuses Laszlo Giricz, the organisation’s Founder and CEO. “The cryptocurrencies that enjoy media attention, like bitcoin, are more akin to commodities like gold than anything else. Conversely, utility tokens allow the access of specific services on their given platform and cannot typically be used for any other purpose.”
In May 2018, Poseidon joined forces with Ben & Jerry’s Scoop Store in London. For each ice cream scoop bought, Ben & Jerry’s pledged to more than rebalance the climate impact of the process. In just over four weeks, “we conserved an area of rainforest the size of over 100 tennis courts with these micro-donations, thereby protecting over 1,500 trees already”, added Mr Giricz.
Elections require authentication of the identity of those voting, in addition to secure record keeping, plus trustworthy tallies to identify the election winner. Blockchain tools can be used to ensure vote casting, tracking, and counting is correct and tamper-proof. Follow My Vote is one example of a blockchain voting startup.
Estonia, “the most advanced digital society in the world”, according to Wired, started innovating with blockchain technology as early as 2008. It is used to help with the country’s healthcare database, and its voting system – all of which can be accessed digitally by any resident. In these days of fake news and fears of election rigging, blockchain technology provides an appealing alternative for voters.
Football, with an estimated four billion fans, is by far the most popular sport in the world. So it is fitting that the round-ball game, always looking to further expand and innovate, has begun to harness cryptoassets. In early 2018 former England striker Michael Owen launched his own cryptocurrency, and Barcelona’s Lionel Messi – widely considered to be the best footballer ever – has endorsed a blockchain smartphone.
Smart contracts are starting to be used by fans to fund the early careers of young players, in various sports, as seen on GlobalTalent.com. And it’s feasible that before long blockchain technology could transform the football transfer market.
In August 2018, eToro agreed a landmark deal by establishing partnerships with seven Premier League clubs – including Tottenham Hotspur, Leicester City, and Crystal Palace – and paid for it using bitcoin.
“As a global multi-asset platform where you can purchase the world’s biggest cryptoassets alongside more traditional investments, we are excited to be partnering with so many Premier League clubs and make history by being the first company ever to pay for a Premier League partnership in bitcoin,” says Iqbal V. Gandham, UK Managing Director at eToro. These partnerships mark the first step in bringing the opportunity offered by bitcoin and cryptoassets to football.”
The potential for greater innovation and societal benefit is huge, in sport and a raft of other industries. Mr Gandham adds: “At eToro we believe that crypto, and the technology, namely blockchain that underpins it, can improve football and the world of sports. In the future, this could include addressing issues of ticket touting, problems with transparency, and providing a guarantee of authenticity for merchandise.”
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