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What is blockchain?

Blockchain Use Cases

At its core, blockchain is a technology that innovates how we transfer value. If your application exchanges value in any way, blockchain may be a candidate technology to bring it to the next level.

Besides value transfer, Blockchain can improve different aspects of a system design. Some of them are decentralization, ownership, data persistency, or even modifying the middleman design in some systems.

This section describes how to identify a proper use case for implementing Blockchain into an application through practical examples and a list of use cases where Blockchain can be used

How to identify a good blockchain use case?

Before implementing Blockchain in a process, use case or application, it is important to understand how blockchain might benefit your application so that you can design a system that targets those benefits and doesn’t add unnecessary complexity to other parts of your application. This usually involves considering if the selected use case or process is suitable for adding blockchain and if it will benefit from it.

Below are some of the characteristics of blockchain that make it an attractive technology:

  • Security
  • Trust
  • Immutability
  • Transparency
  • Low Cost
  • Efficiency
  • Composability

Not all of these may be important to your application or use case. Maybe some are more important than others, so a good first question to ask is:

“Which of these characteristics is important for my use case?”

If you choose at least one, then ask:

“Is that property lacking or insufficient in my current application design?”

If the answer to the second question is “yes” to any or all of the properties you chose, then you’re in the right place. You have selected a correct use case for implementing blockchain.

Analyzing a use case

This proposed exercise can be applied to any industry, use case, process, or application idea. Let’s start by applying the analysis to a real estate use case, specifically collective investments.

For this example, we’ll consider creating a new mobile application that allows people to invest collectively in different real estate projects. This application will receive the investment requests and store them in a private database. It will also be able to receive money and process payments from different sources. However, since this is a traditional real estate investment, some extra steps and legal considerations will be needed to provide a collective investment in an asset.

Let’s answer our two proposed questions:

“Which of these characteristics is important for my use case?”

  • Based on the described use case and flow, the most important characteristics for it would be Transparency, Efficiency, and Composability

“Is that property lacking or insufficient in my current application design?”

  • In the proposed application design, we couldn’t offer a transparent way for users to verify their request for investment-related transactions or data deeply since we provide a private database.
  • Also, creating an application for traditional collective real estate investment is not the most efficient solution, considering every extra step needed to enroll new investors.

Based on those answers, this use case can be a perfect candidate for implementing blockchain into the application design.

A good solution with Blockchain would be an application where every building is split into hundreds of pieces stored in the Blockchain. A user can invest in the real estate project through these pieces (also known as Assets), providing transparency and efficiency.

List of Use Cases

Below are described some use cases where Blockchain can be efficiently applied by providing decentralized, transparent, and secure data storage and sharing, along with the characteristics previously shown in this article:

  • Financial Services

    • Peer-to-Peer Transactions: Reduces costs and settlement times.
    • Cross-Border Payments: Enables faster and cheaper international transactions.
    • Decentralized Finance (DeFi): Provides financial services without traditional banks and/or middlemen.

  • Supply Chain Management

    • Traceability: Persistently records each step of a product’s journey for transparency.
    • Fraud Reduction: Enhances accountability and trust among stakeholders.

  • Healthcare

    • Secure Data Sharing: Allows patients to control and share their health data.
    • Improved Collaboration: Facilitates seamless information exchange between providers.

  • Real Estate

    • Automated Transactions: Uses smart contracts for payments and disbursements.
    • Asset Tokenization: As described previously in this article, Blockchain can create pieces of assets and store their representations on chain.
    • Fraud Prevention: Offers a transparent record of property ownership.
    • Cost Efficiency: Reduces closing times and costs for buyers and sellers.

  • Voting Systems

    • Integrity of Elections: Provides a secure and tamper-proof method for recording votes.
    • Increased Transparency: Boosts public trust and encourages voter participation.

Also, within the Algorand ecosystem, there are many companies in different industries already implementing blockchain, improving processes, and generating game-changing solutions.

Usage example

When creating a voting application, the total number of votes for candidate A and candidate B could be stored in the Global Storage since these values are the total number of votes and are only related to the application, allowing any user or client access.

Here are some companies building in Algorand:

  • Exa Market - Digital Assets (NFTs) Marketplace
  • FAME - Financial Inclusion and Food Transparency.
  • Allo - Blockchain Data Explorer

A list of companies that applied Blockchain to real-world use cases can be found in the following link: https://algorand.co/ecosystem/overview