Cryptoassets have become increasingly mainstream in recent years, as exemplified by the growing popularity of bitcoin, ethereum, XRP and others.
Despite this rapid rise, many experts expect it to be blockchain – the secure, decentralized and distributed digital public register that supports cryptoassets – which will become even more significant than the cryptoassets it supports.
Such use cases are already creating a wider range of cryptoassets that are interestingly different from the original bitcoin.
Before going further, it is worth taking a step back and reminding ourselves that it is blockchain, as it refers to the criptoasset and why the experts are enthusiastic about its larger use cases.
Blockchain has emerged as the backbone of bitcoin when cryptocurrency was launched in 2009. The relationship between blockchain and bitcoin has often been compared to the relationship between the internet and e-mail. Just as e-mail is an internet-enabled service, bitcoin is only a service enabled by blockchain technology.
Indeed, the blockchain has often been described as "the Internet of value".
Using a distributed ledger, all transactions involving cryptographs on the blockchain are verified separately and protected by a confirmation process, and are then published publicly and permanently recorded in the ledger. Fundamentally, this solves the problem of "double spending" that had plagued the first attempts at cryptocurrency.
Blockchain's ability to allow anyone to send value to anyone else around the world in a safe, efficient, and cost-effective manner promises to have the same disruptive impact that the internet has had on our world over the past 25 years.
Those in the blockchain space suggest that we are now around 1994 in the development of the Internet in comparison. That year, the world's first Internet café – Cafe Cyberia on Whitfield Street, London – opened and technology was at the forefront of large-scale adoption.
For a mainstream public, cryptocurrencies are still the most visible cryptoassets to use with the blockchain, thanks to the bitcoin that reaches mainstream news. But a number of other variants are beginning to emerge, two of which are token of utility and security.
Utility tokens, for example, are a new financing tool that allows companies to raise funds by selling future access to their services. For example, a pet-sitting start-up could raise funds by selling a certain number of utility tokens, each of which grants a certain amount of dog-sitting time to the holders.
Security tokens are another method of raising funds, which acts as traditional securities such as stocks and bonds. Just as bonds and shareholders have an interest in the success or failure of a company, security token holders have an effective interest in the company that issues them.
Such tokens are susceptible to more stringent regulatory control, with authorities around the world developing guidelines on how such emissions are managed.
These cryptoassets – and others like them, including platform tokens and branded tokens – have been the main use of the blockchain to date. But just as the Internet has generated a vast number of other uses besides email, so does the blockchain technology, according to expert forecasts.
Over time – and sooner than you think – blockchain will be widely used in healthcare, finance, travel, insurance and a range of other industries. In just 10 years of existence, blockchain is at the level that the Internet was after about 35 years. It is a technology that is worth watching.
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