Six Blockchain application verticals, opportunities for your next project

We see six key verticals where blockchains are being applied. Each of these has many business opportunities. We’re still in the early days of blockchain and the broader decentralization movement, which means there is still plenty of opportunity in each vertical.

1. Intellectual Property (IP)

In the ascribe whitepaper, we said: "One long-standing drawback to the Internet is the hidden ‘artist penalty.’ The very strengths of the Internet make it difficult for creators of digital content to be fairly compensated for their work."

It’s hard to get paid for content you put on the web. Conversely, it’s hard to get legal rights to use much content that you find on the web. Checkout is hard. Licensing is hard. The problems aren’t just in images or video on the web. It generalizes.

How do you connect creators with audiences? What role do middlemen play? This is for all forms of intellectual property: copyright, trademarks, and patents; and all sub-verticals, from art to music to comics to software to logos.

Blockchain technology can help via easy & secure attribution and licensing, transparent audit trails regarding who owns what, and more. As one example, Resonate Coop is making it easy for musicians to register their work, distribute it, and license to their fans. Think of it as like Spotify, except decentralized and owned all the participants. Another example is Ownage for video game content.

2. Identity (ID)

On the internet, walled gardens lock up your personal data. It’s hard to share your Instagram photos to non-Instagram users. Furthermore, it’s siloed: it’s often next to impossible to take your data with you if you want to leave.

It’s not just the internet per se. It’s also personal medical data, where each hospital is its own data silo. Or in education credentials, it’s easy for you to lie or fake your degree, and a pain for HR folks to verify it. There’s a better way: sovereign personal data**,**where you control your data, and give access to small slices of that data to others as you see fit.

Blockchain technology enables sovereign personal data. With things like medical data and HR credentials, the original source can be signed. Of course, privacy must always be at the forefront of discussion. For example, Synereo is building a decentralized social network, where you maintain control over your social data. Or, Backfeed is building a decentralized reputation system.

There’s another identity-related challenge: identity assurance. Imagine if your government went corrupt in a military coup, you escaped your country, now you’re a refugee in another country and you have no papers. Yet you’re trained as a medical doctor. How can others verify that you are who you say you are?

This is the problem of identity assurance: for someone to know that you are who you say you are. It’s a prerequisite to a transfer of any significant value. Put another way: if you’re trying to do a blockchain application that involves assets of any real value, then you better have a good identity assurance scheme!

There are many identity-related blockchain projects. For example, Tradle is focusing on know-your-customer (KYC) for banks. Or, uport is using blockchain technology to do away with the password for web login.

3. Finance

My wife and I used to live in Vancouver. Now we live in Berlin. Sometimes we want to wire money from our Canadian bank account to our German account. It costs us $40. Why is it so expensive?

It’s because our local bank in Canada needs to connect to an international bank in Canada, to an international bank in Germany, to our local bank in Germany. Each of these connections needs to pay about $10 for trust, just in case some connector doesn’t fulfill the transfer. Ripple is using blockchain technology to make this cheaper. Rather than paying $10 for trust based on reputation, it uses trust based on computation —that is — blockchains.

It turns out there are a lotof possible applications in banking. Some say more than 100. How are the banks sorting it all out? One of the answers is R3, which is driving a consortium of 60+ banks for the banks to collectively explore these applications. One final example on banking is the absence of it! You need a bank account to save, transfer funds to family members, and more. Yet 4 billion people don’t have bank accounts. Stellar Foundation is using blockchain technology to make banking accessible to the unbanked.

4. Energy

Let’s discuss the vertical of energy. It’s a trillion-dollar vertical. Yet there’s a massive shift happening: deregulation. Traditionally, large electric utilities would connect the energy producers with the energy consumers. Deregulation changes that. Anyone can connect to anyone. But how do they connect, to exchange euros for electrons, without a big middleman? Blockchains can help.

The most prominent example in this space is RWE, Germany’s largest utility. Like all the incumbents, deregulation poses an existential threat. RWE is getting in front of that by exploring several blockchain projects, such as energy exchanges, electric car charging, and billing.

5. Supply Chain

Is that ring on your finger a blood diamond? Are you sure? It turns out that forgery and fake certification is a big problem in diamonds. To address this, Everledger is using blockchain technology.

This generalizes. Blockchain technology can add transparency and auditability to the global supply chain, which is traditionally highly opaque. Blockchain technology reduces leaks in the chain, which in turn reduces insurance costs.

For example, Chronicled is using blockchains to make the retail supply chain more trustworthy, starting with collector running shoes. And, Provenance is doing it for food. Think the vision of “fair trade” but with more trust and lower costs.

This is the vertical Internet-of-Things (IoT) plays the biggest role. For example, IoT sensors can automatically record sitings of objects onto a blockchain, which can reduce costs and improve data thoroughness.

6. Government

The final vertical I’ll discuss is government. Imagine if more of your tax dollars went directly to schools, parks, and health care and less to administration. Imagine if the flow of tax dollars was more transparent, where citizens could see how the money was spent specifically. This reduce costs and the opportunity for corruption.

Estonia has pioneered this over the last two decades. When they started, they weren’t using blockchain technology. Now, they are. Their administration costs are far lower than most other nations with similar population sizes. Transparency is even easier to implement if you use blockchain technology from the beginning.

Governments have registriesfor land, cars, bicycles, guns, patents, and more. They could move their registries to blockchains, to save money, increase transparency, and reduce opportunity for corruption. For example, BenBen is doing a land registry in Ghana where corruption is a real problem. Or, Recruit is doing blockchain-based education credentials.

Bonus Vertical: Infrastructure

When you build a webapp, you don’t build your own SQL database from scratch, you go and download PostgreSQL. You don’t build your own payment system, you use Stripe or something like it. You use something off the shelf.

Similarly, when implementing a blockchain-based project, most of the time you’d just use off-the-shelf infrastructure, such as Ethereum for decentralized processing, BigchainDB for a decentralized database, or Monax (nee Eris) for a blockchain platform.

But, it’s still pretty early days, so there are still many openings for new or better infrastructure. For example, the founders of the Golem project saw an opportunity for large-scale decentralized computation. Or, the founders of Zcash are not just building the Zcash network, they’re also helping others build zero-knowledge technology into other networks. Or, Azure and other big cloud providers are providing blockchain-specific infrastructure too.

Trent McConaghy is founder & CTO of BigchainDB, the scalable blockchain database. In the past, he designed AI algorithms to help drive Moore’s Law and explore man-machine creativity.