Blocks, sporks, smart-contracts, forks and mining are all words that are associated with the blockchain, but why should we care?
Blockchain technology was developed by some very smart people who had a great handle on technology. One key aspect they failed on: speaking a language that matters to the general population.
Most people can say that they have heard of Bitcoin, but hardly anyone except for the select few insiders can tell you what it really is and why we should care.
Before we identify the value proposition of the blockchain, we need to acknowledge that there is many blockchains out there.
A blockchain is essentially a publically available database that can be managed from many locations, this database cannot be changed, only updated and makes is the perfect place for transparent financial transactions or tracking or products in a supply chain. Some of these blockchains are public, where anyone can see the information and some are private where the code is held within private walls.
Blockchains aren’t just about financial transactions like Bitcoin, there are many use cases, with many target audiences. So how can we put a value proposition on the entire industry?
Each blockchain generally has a unique design and is often targeted at a particular niche. For example, Bitcoin was designed with currency in mind, whereas Ethereum is designed for business applications.
Benefits of Blockchain
Saying all this, we still can’t pinpoint one single value proposition for Blockchain technology, since there are many benefits and use cases, let’s take a look at a few high-level benefits of the blockchain:
Low Cost – cutting the cost of doing businesses, powering processes and handling data.
Security – cryptography offers secure transaction channels, smart contracts and shared databases.
Privacy – most blockchains give users heightened privacy.
Speed – blockchains add speed to transactions, by cutting out the middle-man.
Open source – blockchains act like a virtual machine to run applications, making it unnecessary to buy or hire servers.
Use-cases for blockchain technology and its value proposition
Let’s look at what a value proposition is, a blog from Shopify states: “A value proposition is the value you promise to deliver to your customers post-purchase. It’s ultimately what makes your product attractive to customers.”
With so many benefits, uses and customer types for blockchain technology, there isn’t one value proposition for the blockchain. It all depends on the project, the business model and the end user.
Below I have compiled over 7 uses for the technology, and each use-case has its own value proposition.
The most logical use for blockchain is transferring funds from one party to another. Most transactions processed over a blockchain can be settled within a matter of seconds, vs banks which can take more than 24 hours in some instances.
Loyalty reward programs
With token-based systems, consumers can be incentivised to return to a certain retail store. Blockchain technology eliminates fraud and waste commonly associated with loyalty programs.
Blockchains can be used as a marketplace to share or sell unused data, most enterprise data goes unused and the technology acts as an intermediary to store and move this data for a number of industries.
Copyright and royalty protection
Blockchain technology provides real-time and transparent royalty distribution data to musicians and content creators. Artists or creators of digital content can make sure they are getting paid royalties for every item sold.
Supply chain monitoring
The technology comes in handy when monitoring supply chains, by removing paper-based trails, businesses can pinpoint inefficiencies within their supply chains quickly, and locate items in real time.
Blockchain gives users a way to control their digital identities. Allowing people in poor regions can get access to financial services or start their own business.
Blockchain technology people to vote digitally, it’s transparent and regulators can see if something was changed in the network. Combining the ease of digital voting with the immutability makes your vote truly count.
As you can see, there are many real-world uses for blockchain technology, and getting one value proposition is not a simple task. The best place to start is by looking at each use-case and finding the customers of each.