8 World Use Cases of Ethereum
Ethereum is the second generation blockchain platform that enables developers to create and run decentralised applications on it. The platform came into operation in 2015, started by Vitalik Buterin, and continues to make waves in the tech industry.
Unlike the first generation blockchain, Bitcoin, which is limited, Ethereum has advanced scripting abilities like turning completeness and smart contracts. Ethereum smart contracts are increasingly gaining popularity since they are known to be trustless and virtually impossible to tamper with. That said, it comes as no surprise that there are many use cases of Ethereum today.
In this article, we take a look at some of the applications and world use cases of Ethereum.
1. Banking and Financial Services
The conventional finance sector is synonymous with archaic operational process. Not to mention security vulnerabilities, slow payment settlements, and limited transparency.
Ethereum blockchain offers automation and trustless smart contracts useful in the banking and financial sector for speeding up and simplifying operations.
Smart contracts can promote the accurate transfer of information, eliminate errors in financial transactions, and enhance transparency. Transparency builds trust.
Ethereum smart contracts are utilisable in various areas of the finance sector, including mortgages, insurance claims, payments, national bonds, and settlements.
Already, apps like ICONOMI and Branche are providing users with easy access to various financial services hosted on the Ethereum blockchain.
2. Digital Identity Management
Identity theft seems to be increasing over the years. In the US alone, over 9,600 data breaches were reported between 2008 and 2019; and about 10 billion records stolen during that time frame. The case is not any different, in the rest of the world.
The Ethereum blockchain offers an interoperable and tamper-proof infrastructure. By incorporating Ethereum smart contracts, people have safer and more secure ways to handle and manage digital identity.
Smart contracts can enable people to take control of their own identity. Users can store their vital information like medical records and financial records and decide who can access the information. They can also choose which information from their entire data store can be accessed.
3. Prediction Markets
Prediction markets have been around for decades. They are markets that reward users for making predictions about specific events. Events can range from football matches to presidential elections. The user(s) who predicts the right winner gets the reward.
Ethereum smart contracts can be used in prediction markets to provide incentives when making predictions. Users who participate in specific events can get compensation for participation, with users making the correct predictions getting extra rewards.
4. Replacing Escrow
Escrow services are usually financial services that include third parties. The inclusion of third parties not only makes the system more expensive due to fees but also time-consuming.
Ethereum blockchain offers trustless transactions that eliminate the need for intermediaries. Without intermediaries, transactions get faster, more efficient, and cheaper. The reliance on blockchain also ensures services are always transparent and secure.
Ethereum smart contracts can be coded with the terms of an agreement between two parties, ensuring the contract is only executed once the conditions have been met.
Crowdfunding is the process of raising funding online; by raising a small amount of money from a large number of people. Crowdfunding platforms like IndieGoGo and Kickstarter, already in existence, charge high fees; about 5 per cent of the total money raised through their platform. This is a lot of money!
Ethereum blockchain offers a reliable platform that can be used to create a smart contract for crowdfunding without any fees. The smart contract can be coded with crowdfunding terms of agreement ensuring all parties to the transaction are in safe hands.
For example, a smart contract can be set such that if a specific goal has not been reached within a specified time, funds can be returned back to the donors.
Webhosting is a lucrative business operated by very few individuals and corporations. Again this is a service that relies on third parties. Website owners have to pay specific fees to sever owners to be operational. Reliance on intermediaries means in case a server is compromised, your site suffers.
Ethereum blockchain offers a platform where web hosting can be done more securely and reliably. The use of blockchain eliminates any possibility of a compromise, and since it's an open platform, upgrades get to be done efficiently and faster.
7. Online Gambling
Online gambling is one of the most lucrative industries on the internet. In 2018 the US online gambling market landed revenue of $ 306.5 billion. However, as profitable as the industry is, it is one of the shadiest and most fraudulent industries. A report by ThreatMetrix Gaming and Gambling Cybercrime reveals that for roughly every 20 new accounts created with an online gaming site, one is connected to a fraudster.
Ethereum technology offers an efficient, secure, and more reliable way to conduct online gambling. The use of smart contracts and reliance on blockchain technology ensure fraudsters are kept at bay, and users enjoy more transparency.
8. ICOs or DAICOs
ICO or Initial Coin Offering is a type of funding using cryptocurrencies. Ethereum smart contracts can be integrated into the Initial Coin Offering process to make it more transparent, fair, and effective.
Vitalik Buterin, the founder of Ethereum, not long ago presented a hybrid model of DAO and ICO, called DAICO, which is supposed to be more efficient and reliable.
In a DAICO, there is a DAICO smart contract executed on Ethereum blockchain and a DAICO variable known as Tap. The Tap is what determines how much a developer can withdraw from a contract per second. The Tap limit is monitored and governed by DAICO contributors.
By monitoring and governing the Tap limits, DAICO contributors can check on the developers as they can't withdraw the whole contributed amount at once.
The truth is Ethereum still has a lot to offer the market. The technology is still young, and there is much to discover from it. The above use cases are just some of the things Ethereum can do for various industries. With time much is to be expected from this revolutionary technology.
Over to you. What are the other use cases of Etheruem technology? Which other industry will Ethereum smart contracts transform?
About the author:
Jay Jackson is a blockchain enthusiast and a freelance writer at topcryptowriter.com. He works closely with brands (people, businesses and startups) in the crypto sphere. He currently writes Blog posts, Guides, Press releases, ICO reviews, eBooks & Whitepapers. You can find him on LinkedIn.
The above references an opinion and is for informational purposes only. Do not take this as personalised financial advice or investment advice. The views expressed by the author do not necessarily represent the opinion of BitPrime.
Last updated: 05/02/2020