Blockchain technology is the most powerful innovation since the internet and is seeing similar disruption and adoption. Comparable only to something so revolutionary as the internet, blockchain’s potential impact in the future is immeasurable.

Blockchain brings three key factors – decentralization, public ledgers and true asset ownership. This means many things, but centralization and secrecy have shrouded the corporate world from retail investors for too long.  

Finance 

Traditional finance has a few big problems, solvable by blockchain. First is the security of networks, followed by the lack of global inclusion in the financial system. On top of these is the biggest issue of centralization, control and true ownership. In Canada recently during the “trucker rally” protests, the government actually elected to block, freeze and restrict the bank accounts of anyone participating in the peaceful demonstration. Businesses taking part saw their corporate funds frozen while families at home watched their own accounts become locked for sending money to protesting loved ones. Countries like Russia and China are also known for seizing control of bank accounts. 

The government and the banks have complete control of our money from the total money supply to account access to the physical money we deposit into our accounts. Banks work by taking your money, as if you are loaning it to them, and investing it. They then kick back less than 0.1% of the interest earned to you, while making anywhere from 3-25% themselves. After understanding how banks work, why not hold and invest your own money and keep all the profits instead of receiving less than 0.1%?

Plenty of underdeveloped countries are severely lacking financial inclusion. Take El Salvador for example. They made the decision to legalize Bitcoin as tender throughout the country, and this was largely due to about 70% of the population not having bank access. It is hard to imagine from a first-world country but without credit scores, loans and mortgages, debit cards, and general financial access, any country’s economy will be years behind the more developed world. Before adopting the bitcoin ecosystem, El Salvadoreans were unable to send money digitally or even take a loan to buy a house or start a business. 

Other countries, like Venezuela and Turkey, have seen their currencies devalued at incredibly fast rates due to printing money and poor monetary policy. Videos of citizens burning money and turning cash into fashion designs have gone viral, showing what little value the actual currency has. Centralized entities around the world control the currency supply and policies surrounding it as well as have the ability to freeze and cancel bank accounts.  

With blockchain, and especially Bitcoin, decentralization and the transparency of a public ledger are indisputably better options than the current global financial system. Bitcoin works with a predetermined, set supply and a programmed monetary policy. This means nobody in the world can change the bitcoin monetary policy, and the supply will continue to be halved every four years until all 21 million Bitcoin are released. Nobody can inflate Bitcoin and release more into the ecosystem, devaluing its value. Utilizing a private cold wallet, nobody can gain access to your assets without your seed phrase. Bitcoin and blockchain are accessible around the planet and can bring banking systems to unbanked communities.

The Ethereum, layer one, blockchain is heavily involved in the Defi (Decentralized Finance) space. One common dApp (decentralized app) running on the Ethereum blockchain is Aave. Aave allows users to borrow and lend crypto nearly instantly, without intermediaries and bank approvals. Hold 10 ETH on the Aave platform and in less than two minutes you will have a loan of 2-5 ETH. This offers the benefit of utilizing the spending power of your assets without actually selling the asset, and is a lot quicker and more convenient than a physical bank. Defi solutions are around for exchanges or buying and selling assets, with decentralized exchanges as well. These DEXs allow you to purchase crypto without any centralized middlemen like Robinhood or Coinbase.

Gaming 

Nearly three billion people around the world play video games every year, making it one of the largest and fastest-growing industries today. The problem is that in-game assets are not owned, although they will cost either money or time to receive. Call of Duty, one of the popular first-person shooting games, allows you to purchase additional maps/areas to unlock, you can purchase or unlock advanced weapons through gameplay and even utilize certain perks, or character traits, to help you in the game. 

The business model used by Call of Duty, or COD, is used throughout the entire video game industry, by every development team. What blockchain is doing with gaming is creating an environment based on ownership. In P2E, Play-to-Earn, games, players can earn crypto tokens for in-game activities, participation, advancing through the game, or completing different tasks. This introduces the ability to make money while playing video games.

This web3 gaming ecosystem, built around ownership, gives opportunities to players who spend time or money on their games. Imagine being able to work hard all weekend to unlock a specific map or weapon, and then being able to sell that earned item in an open marketplace to make real money. 

Microsoft has partnered with a cryptocurrency, blockchain-based company called Enjin. Enjin is working to bring NFT-based marketplaces to video game makers and launched an NFT, browser-based, Minecraft game alongside Microsoft in 2021. Microsoft had said, “The new initiative demonstrates a viable interoperability between multiple platforms, applications and games.” Microsoft is a major player in the video game space, and purchasing Activision Blizzard earlier this year only added to its already large portfolio in the gaming space. Microsoft is responsible for the Xbox gaming console, Forza, Minecraft, Fallout, Halo and many more games.

What Microsoft and Enjin are ultimately trying to do, is bring this innovation to everyone around the world. Enjin started with a mission of linking video game studios and games to NFT marketplaces, turning in-game assets into real assets, potentially worth real money. If you purchase a map or a weapon in a video game, shouldn’t you also be able to sell that item to a friend? Shouldn’t you be able to do what you want with it, since you are the one who purchased it?

Branding 

Web3 and blockchain technology present great opportunities for branding, never before seen. NFTs and smart contracts offer a wide variety of choices for expanding a brand’s reach, increasing revenue and driving customer loyalty. Smart contracts are specifically designed programs to execute a certain set of commands automatically, once certain prerequisites are hit. Typically between two parties, a smart contract eliminates the need for an intermediary and removes the required trust to interact and transact anonymously online. 

These smart contracts are being used mainly to mint NFTs, or “mine” a new one, not already on the market. NFTs are the big innovation for branding while smart contracts currently have more of a use case inside supply chain management and business management. 

NFTs are non-fungible tokens, typically accompanied by an image. The image aspect is why they got so big, so quickly. Many people have difficulty understanding blockchain and cryptocurrency, while it is much easier to understand something that you can physically see. 

Brands can issue NFTs to their loyal customers, offering perks ranging from discounts to exclusive access to certain products and even more. This is a great way for a business to reward its most loyal customers. NFTs can also be used to provide authenticity for an item whose legitimacy is questioned, driving brand trust from all customers. 

Using NFTs would largely be a marketing strategy right now, driving traffic and expanding the customer base through brand awareness, innovation and the physical branding of the image of the NFT. Brands can earn royalties each time their NFT is traded, providing that additional income source. The best part is that these branding strategies offered by NFTs, come with extremely low overhead and are affordable for a business of any size. 

Supply Chain and Business Management

We have all been dealing with the supply chain issues, seen around the world ever since the COVID lockdowns. Businesses are having a harder and harder time managing supply chains at the scale required, causing shortages, empty shelves, unhappy customers, and a loss of profit. One reason this happens is because of the time it takes to manually update inventories and accounts, as the process is simply tedious and time-consuming. Another reason this happens occasionally is because of an imbalance in supply and demand. When demand continues rising for an item that production has been closed or slowed down on, the supply chains get crunched. 

Smart contracts can be utilized to make those immediate, seamless transactions and automate the process of updating inventories. Placing products on the blockchain is one of the smartest things a company can do behind the scenes. Attaching NFTs and other blockchain-based assets to physical, real-world products creates a simplified way to track, analyze and manage inventories from anywhere around the world. 

Bank Settlements and Remittances 

Many early adopters of Bitcoin, adopted the digital asset because of the severe problem with remittances in the late 2000s and early 2010s. Remittances are payments typically sent between individuals, for goods or services. Many immigrants came to find out that sending money home to their families costs a lot of time and money through their banks and other traditional methods. Often being charged 15-20%+ of the transaction amount, people quickly sought alternative options.

Early Bitcoin adopters fell in love with the decentralized technology due to its low fees and quick transaction times. Even in 2022, crypto continues to solve remittance problems of common payment applications including trust, security, financial limitation and cost. 

Bank settlements are fairly similar to remittances but involve bank and financial institution money transfers, typically at a global, and often multi-currency level. These transactions are a problem for banks because they tie up capital on their balance sheets and can take over a week to finalize. Money transfers taking that long heavily impact the amount of invested capital in the market and consequently the banks’ overall returns.

One example of a cryptocurrency solving bank settlements and remittances is XRP. The token originating from Ripple Labs can facilitate billion-dollar transactions in seconds while costing a small fraction of the typical price. Transactions often execute at less than 0.01% of the transaction amount, solving major problems for large financial institutions. 

Data 

Although most of us may not know much about data storage, we do know that most of the world’s data is stored by a minute amount of globally powerful and large corporations. Google, Facebook and Apple are among the tech giants harboring individual data and selling that data profitably. 

The blockchain has introduced decentralized data, from decentralized query layers to real-time decentralized data feeds, blockchain has changed the world of data forever. Companies like Chainlink, Storj and The Graph are most notable for revolutionizing the data industry.

Chainlink is an oracle, allowing blockchains and dApps to receive real-time data, aggregated from different sources deemed credible, and remain fully decentralized while doing so. Essentially if you wanted to know “Did the Red Sox win last night?”, Chainlink would take the answers from the top trustworthy sites and relay that information to you nearly immediately. 

Storj is built as a decentralized storage cabinet. It offers a way to save files in a fully decentralized manner. On the Storj protocol, files are broken off into “shards” and distributed to different nodes around the network anonymously. These nodes then come together to piece your file back together when you come to collect it.

The Graph is an index and querying layer, very similar to Google. It is almost like a search engine, but one that does not collect any data or have any advertisements. Developers participate in the network by indexing blockchains and users can query search blockchain data, saving a large amount of time. 

These services and protocols offer decentralized versions of the same tools we use today and are only getting better every day. 

Art

NFTs have offered a very unique opportunity to artists of all styles around the world. NFTs help artists build a brand around themselves and a community that enjoys what they do. NFTs also offer royalties to the artist every time a piece of their work is resold. Counterfeits are nearly impossible on the blockchain and this would save artists from dealing with fraud. 

The traditional art industry does not offer much to the artist in terms of opportunities surrounding a growing brand or alternative revenue sources. NFTs offer an artist both, as well as a genuine way to get close to their collectors and really build a community around what they love. 

Blockchain is helping innovate within so many large, mainstream industries, that it’s hard not to pay attention. Blockchain could theoretically grow to a hundred billion dollars, and a trillion-dollar asset class given time. Technology this innovative, this disruptive and this powerful should not be ignored and does not come around often. 

Adoption & Usage

Blockchain usage and adoption are only comparable to the early internet days, and even those are hardly comparable. Adoption over the past few years has been stronger than ever with 21% of the 1000 people polled in 2021 saying they had some form of experience with cryptocurrency and 42% of all people aged 18 to 34 agreeing with that. Adoption continues to rise, even while prices fall down, especially amongst the younger crowd. 

The usage of blockchain networks, applications and protocols has risen immensely fast and also shows no signs of stopping. The Ethereum and Bitcoin networks both crossed one million active wallets. Coinbase, arguably the largest US-based exchange, has over 40 million users worldwide, with three million users actively investing every month.

Blockchain may be poised to disrupt the world, are you watching closely?

Interested in marketing your blockchain/Web3 project? Please contact Off-Chain Communications for a free consultation and quote.

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