The utilities of blockchain technology

Intro.

In the last 12 months, there has been a lot of talk about blockchain. Yet the applications of this technology have not yet reached the masses. The key to everything, according to industry experts, is to find its hidden utilities and make its use easier.

“Blockchain is a technology that answers many questions, some of which we have not yet asked.”

What is blockchain.

Blockchain is fundamentally a distributed ledger in the network where anyone can read and write data, which is secure because this ledger is decentralized.

To easily understand this concept, in my seminars, I use the example of a book. Consider the blockchain ledger as a book. A book in which all transactions that have taken place on the network since its inception are recorded. A book with numbered pages and distributed in equal copies to every participant in the network.

With this example, we can understand the three fundamental characteristics of blockchain:

Verifiability, in fact, all information is written inside this book and anyone can verify it; Protection from deletion, in fact, if we tore a page from this book, everyone would notice it since the pages are numbered; Protection from modifications, in fact, since the book is the same for everyone, we can easily verify if a person has even changed a single letter in their book.

These concepts can be transposed to the “ledger” in digital format.

All of this is made possible by the way “pages of this book” are saved, which happens through a chain of blocks. Each block contains a package of information that is saved and linked to the next block in a way that forms an unchangeable chain. The blockchain, precisely.

One of the first applications made possible by blockchain is the management of value and transactions. In other words, cryptocurrency.

Cryptocurrency as the first utility of blockchain.

Bitcoin was the first cryptocurrency born using blockchain. In 2009, an anonymous character known by the pseudonym Satoshi Nakamoto invented this currency, which is still alive and well today.

For some, Bitcoin is much more than a cryptocurrency; it is the only authentic and free cryptocurrency and is here to change the world. We must understand that currency systems have always shaped human history. By overcoming barter, humans have made the development of the economy possible. From first systems based on stones or shells, to gold and finally to coins.

These systems have always had a cardinal value that supported them: the scarcity of the currency in nature and the work to create new ones. There is a certain amount of gold in nature and extracting it involves work. So gold can maintain its value over time because it is scarce. It was the same for coins until the twentieth century when they were detached from the gold standard, allowing states to produce new money at their discretion.

Bitcoin wants to return to being a scarce and difficult-to-produce currency. In fact, to produce new bitcoins, one must use computers that are precisely the ones that maintain the Bitcoin blockchain network. In addition, the system is designed to reach a limit of 21,000,000 coined bitcoins. This makes Bitcoin look like “digital gold” to many.

But the advantage of cryptocurrencies is even greater than that of gold. They allow for fast online payments and are easily transportable. Just think that we could carry all our bitcoin reserves with us simply by remembering the access password to our wallet.

These applications have exploded Bitcoin and the other cryptocurrencies born subsequently all over the world, especially in those countries where the population was more oppressed and needed to escape the control of central banks.

From cryptocurrency to tokens.

There are thousands of cryptocurrencies today, but few of them maintain real value over time. Anyone can easily create a valid digital currency within their own ecosystem, and this is called a token.

A token often does not have a corresponding value in Euros or Dollars but is recognized as a chip within a reality or community. This has led to many uses by companies to engage and retain their audiences by donating or selling their tokens. This is a very interesting application that, in our opinion, will give rise to several business models in the coming years.

From fungible tokens to non-fungible tokens, the birth of NFTs.

Tokens, like cryptocurrencies, are fungible, meaning they can be exchanged with each other (one Bitcoin is the same as another Bitcoin). But someone once thought of changing this. NFTs (Non-Fungible Tokens) were born, tokens that are always different from each other. They are identified in the blockchain register by unique codes, each of which has a single owner. Only the owner can transfer this ownership to a subsequent owner. This has made it possible for another application of the blockchain with great usefulness: the unique identification of a digital asset and its ownership.

Thus, collections of NFTs with unique pieces such as CryptoPunks or the famous Bored Ape have emerged, which give access rights to a highly exclusive community. But NFTs are also widely used in the art world to sell works in the digital or real world to store and ensure information about a product. For example, Alfa Romeo has tied an NFT to each Tonale sold, in which information about the car’s maintenance and history will be stored, thus guaranteeing its value over time.

The future in the metaverse and web3.

In October 2021, Facebook changed its name to Meta and launched its vision for the Metaverse. A virtual reality where people meet, socialize, work, have fun, and own virtual objects.

From lands to build houses to clothing, in the virtual world called Metaverse, everything can be bought and owned in a unique and certified way. This is the latest application of the blockchain, which, thanks to NFTs, makes this certification of ownership possible.

For some, the metaverse is just a video game, but if we think that for the first time, we can uniquely identify a digital object and “own” it, we realize how much this world today can be similar to the real one.

In addition to this, current VR visor technologies such as Oculus or AR allow us to see virtual objects in our physical reality. Companies have started building their presence in the metaverse, and in our view, many realities could soon have a metaverse environment to present their products as a replacement for the classic website.

The transition from Web2 to Web3.

The web is changing, and we are witnessing the third online revolution. In the first version of the internet, Web1, we saw a one-way internet where few users created a website and many others could only read it. With Web2, the social media revolution allowed people to easily publish content on these platforms and reach thousands of users. However, over time, these platforms have become more powerful, and centralized power is no longer favored by many.

From this dissatisfaction arises Web3, which, thanks to blockchain technology, allows for greater decentralization and privacy. In fact, thanks to the digital identity guaranteed by our wallet, we can “bring our data with us” without having to give it to the platforms we are using. In Web3, the platforms may no longer be centralized on a company’s servers but run directly on the blockchain with the ownership of the users who use them and who make decisions through a DAO (decentralized autonomous organization).

Two our practical applications.

On the web, many talk about the metaverse and NFTs, but the reality is that very few are actually using these technologies to create practical business interests. With PerformanceW3B, we have organized a team of expert developers with whom we work on practical projects, and I think it is interesting to bring you two examples.

The first is in the Yachting sector. It is the realization of a Yacht in the metaverse with particular properties. People can enter and experience immersive experiences. Inside, they will find NFTs that connect objects in the metaverse to existing objects. The client is a Yacht sector producer, and the utility of this project is in being able to bring to the fair what cannot be brought today.

A second example is in the mindfulness sector. We have created environments for group meditation where participants will participate with 360-degree Oculus headsets. They will be immersed in a virtual reality that surrounds them like a sphere. The audio will also be extremely realistic, and participants can see and interact with each other. Again, the goal of the project is not just to “talk about it,” but to be able to do group meditations with people from the other side of the world, immersed in an inspiring environment that would be impossible in physical reality. Imagine meditating in front of a huge Buddha statue with waterfalls all around and a full moon overhead. In short, the only limit is imagination.

Conclusions, doing what we couldn’t do before.

In short, the utilities of the blockchain are already many and are destined to increase over time. We have understood on this journey that the limit today is no longer the technology or what we can do, but rather imagination and what we want to do. We should not consider cryptocurrencies or the metaverse as substitutes for their real counterparts but rather as a new technology that allows us to do things we couldn’t do before.

Who are Luca and Fabio Faccin, PerformanceW3B?

The author of the article is Luca Faccin, management engineer, business consultant, speaker, and author of books on management and online marketing (https://amzn.to/3cFzyuo).

Brothers Luca Faccin and Fabio Faccin, with their consulting companies PerformanceW3B and PerformancePPC, have helped hundreds of companies grow their business digitally. Experts in web marketing and digital innovation, they are now focusing their attention on blockchain technology, NFTs, and the metaverse to create innovative business models in what will be the future Web 3.0.