Are there any substantial examples of blockchain solving a real problem?

Many people solved their lack of money problems through launching blockchain-related companies. The actual systems they launched can't be considered substantial, functional, or often even real, but the (actual) money that poured into their own bank accounts was substantial enough. Does that count?

41 comments when I write this.

There is a ton of ‘will’, ‘could’, ‘might’, but no ‘is’. The concrete examples pointed to are sales pitches, announcements, protocols, consortia being organized.

It looks a lot like the answer is no.

That may change I suppose, but it really seems like no one is doing anything practically useful with it.

I don't consider myself an expert here, but I believe there are few or no problems that only blockchain technology can solve. Rather, it's about how it solves problems.

If you solve a problem with non-blockchain technology, you will get a centralized entity of some kind. Be it a bank, a SaaS service, a social network, a database, or whatever. Sure, it can be open source, but it's still centralized in one way or another, and decisions must be made be someone. If you are the owner or have privilidged access, you may do bad things (alter data, abuse user data, increase prices, etc).

With blockchain technology, you can get around having a centralized entity. Instead, you are developing an incentive schema that allows distributed ownership and decision making, so that all participants have power and are incentivized to behave in the best interest of all.

Besides money, there are many other cases where this make sense, but is the downside of having a centralized entity really large enough to justify the downsides of blockchain (hard to develop, slow, hard to use and manage, etc)? Probably not right now, and maybe it will never get to the point.

IMO, a well-run, transparent, centralized entity can be more trustworthy than a complex technology that is potentially exploitable, buggy, you don't fully understand, and is difficult to change once to initial incentive schema is in place.

In a sense, git is “blockchain technology” that predates the buzzword: every commit is cryptographically hashed, including the hash(es) of its parent(s). This lets anyone verify all the involved commits back to the beginning of the chain, and is what enables the 3-way merge algorithm without a centralized server.

What it doesn’t include is any kind of proof-of-work or proof-of-identity, which some people might consider necessary for something to be “blockchain technology”.

Edit, to the downvoters. In order for me to produce better commentary on this topic in the future, I would like to know: Do you view these statements as incorrect, misleading, or simply unhelpful?

The strongest use case right now in the blockchain space is Bitcoin as a sovereign money. It's an asset with substantial liquidity that has incredible protections against asset seizure and strong independence against capital controls.

It's the type of thing that you go 30 years without needing it, but then when you do need it you really badly need it. Bitcoin does this well today and there are plenty of people who proactively plan for financial contingencies by holding some percentage of their portfolio in self-custodied Bitcoin.

We also have several examples (Greece a few years ago, Venezuela recently) of this playing out in favor of the prepared in the real world. When your country's financial system melts down, your Bitcoin holdings can give you liquidity and options despite everything else around you being completely disfunctional.

I still like it as "proof of existence", proofing that you where in possession of a certain information at some point in time. (by publishing the hash on the blockchain).

I think this is already relevant for court cases.

Paying bribes to government officials.

Large transactions for illegal goods such as drugs.

Transferring money out of controlled currencies.

This isn’t meant to be a joke. I’m illustrating that the price of cryptocurrency is indeed backed by some of its utility and not 100% a money making scheme.

For blockchain to be useful, your use-case has to:

1) Involve coordination between parties who don't trust each other; if they trust each other, a regular database will do fine and be much more efficient.

2) Exist completely within the ledger; once something is in the ledger it's tamper-proof, but bad information can still enter the ledger from the outside world. This is the reason it doesn't serve much purpose for anything physical, like delivery confirmation. If someone wanted to fake a delivery they could just... enter fake information.

That makes for a very narrow set of legitimate use-cases, most of which are crypto-currency, whose status as a "solution to a problem" is dubious at best.

As a blockchain skeptic the replies to this post have so far further cemented my skepticism.

Providing an example of blockchains solving real problems aside from cryptocurrency should be trivially easy at this point: well funded companies have had /years/ to do this now.

It's not just startups either - IBM and other big consultancies have been pushing blockchain solutions really hard.

How much longer do we have to wait for someone to build something that's actually useful, and that genuinely couldn't have been built cheaper and faster without a blockchain?

Self-sovereign identity is probably the most viable use case at the moment. No third party needed to manage your identity, replace keys, and broadcast updates to the world. Additionally adding the dimension of time, where you can differentiate between something signed while a key was active vs something signed after the key was retired.

Some argue this is the only data necessary on-chain — all other application data can remain in normal data stores while the identities interacting with that data are immutable and auditable.

Laying the groundwork for a lot of neat stuff https://identity.foundation/working-groups/identifiers-names...

The Telecom Regulatory Authority of India (TRAI) has used blockchain based solution to curb spam calls and messages. (Slightly old link here: https://www.livemint.com/Industry/RRuPzidooMxh8pspZhTlrI/Tra...)

India has a huge problem with spam calls and messages (not so much in times of Corona, work from home, and lockdown) and how the phone numbers of users are obtained. There are lists of emails and phone numbers that is bought and sold in an informal market too. There is no first hand record of consent about whether or not any registered entity can call or message me. Almost everyone receives messages and calls from unsolicited numbers asking to buy insurance, loan, or a credit card. Its a huge problem so much that an average customer would get 2-3 calls a day. TRAI tried to curb it earlier with a DND mechanism, but that did not work given it is very easy to register a new handle, and no easy way report a caller/message sender.

What they are proposing is to have consent in a blockchain is that there would always be one final state. I dont know much but it means only registered telemarketers would be allowed to call and to only those where consent is explicit and recorded in the blockchain. No mining but seems like an effective solution on paper.

More links: https://m.economictimes.com/industry/telecom/telecom-news/bl...

This is a presentation on the same: https://www.itu.int/en/ITU-D/Regional-Presence/AsiaPacific/S... (cant verify the date, apologies)

It solves the alarming number of people without yet another buzzword on their cv/resume.

There is something like a blockchain called XRPL. It is currently used to make cross border payments cheaper and faster for corridors where the traditional way (nostro/vostro accounts) is rather expensive mostly due to low liquidity between the 2 assets and high counter party risk or the foreign currency. For example USD to MXN. Lots or people send money to this way. AFAIK only a few millions a week are transferred this way by now but doubling every few month. Probably still in the single digit percentage of all the money send to Mexico but due to covid19 we all know that doubling is a freaking fast growth rate so this could soon make up a significant portion for that corridor and obviously there are other popular but not efficient corridors. Apparently it's up to 40% cheaper and if it's used more the liquidity will grow which may make it even cheaper.

I would like to point out that any blockchain like thing with some kind of coin/token with value could be used for this. Like in theory this could be done with Bitcoin it's just very very slow and due to the rather high transaction fees its probably not really interesting.

After years of being interested in blockchain tech and hundred of hours research this is the only real world use case that is deployed, used and most importantly generally makes sense, that I know of. There are a bunch of other projects like Brave that are technically deployed and working but IMO do not solve a problem just recreate the existing problem with a fancy token.

"dark web payments for illegal stuff" seems to have been a fairly good match for cryptocurrency, a pretty specific case of wanting a system not relying on a single authority.

Certificate transparency (http://www.certificate-transparency.org/) solves the real problem of allowing website owners to check that no one issues illegitimate certificates for their domains. I believe it is technically a blockchain although it doesn't have most attributes traditionally associated with blockchains (decentralized, PoW).

https://originstamp.org/

I understand it can make for hard to tamper with historical data. For things such as temperature records of transported food and medical goods this can be very valuable. As you can have mobile record taking and storage. While having confidence that the data has not been altered.

Blockchain solves one fundamental problem: trust. If you have a solution that fundamentally relies on trust and you want to get rid of that, Blockchain is the answer. If you're OK with trusting someone/thing, then Blockchain wont add any value.

The obvious and biggest application of this is money. The original Bitcoin use case. Today the banks handle all our monetary transactions and we trust that they don't act maliciously (we also do a lot of auditing/regulation/manual verification, but ultimately that is imperfect so it really boils down to trust). If you want to have a truly trust-less monetary system the only solution I can imagine is blockchain.

Another potential solution I can see for blockchains: Certificate Authorities. Today CAs ultimately roll up to one of a handful of root CAs. In other words, there are a handful of entities that we just implicitly trust. They get audited, regulated, etc, but ultimately we just trust them. If you want to move to a truly trust-less CA model it has to be on blockchain.

There is also a third, kind of cheat answer: automation. You obviously don't need blockchain here, but if you want to automate something and you need to get funding from a VC, or a boss, or anyone else, blockchain is a good buzzword to throw in there to get some extra $$$. This is less true since the crypto crash, but still provides some value.

Blockchain usage right now is minimal, largely due to the fact that for most use cases it’s too expensive (the cost is high, confirmation time is long).

For most use cases, Ethereum is too expensive and the blocks are too full, the same is true for Bitcoin.

Once second layer solutions are more mature and layer 1 blockchains are substantially cheaper due to new consensus protocols, you will see more applications for blockchain.

Until then, blockchain is too expensive for the free world, and is largely only somewhat useful to those in failed states.

Assuming the only real use case is when all parties don't want to trust a central authority, the use cases do seem limited. Because once you have to trust anyone, you might as well use a simple ledger/database.

In the airline space, for example, all the airlines pay OAG to file schedules. OAG is a central authority they trust, and pay. Blockchain could replace that, and save them all some money. Hasn't happened though.

Disclaimer: I am affiliated with the project I am describing below.

You have a stab at one of the most important issues within the space here. You are right, most projects either do not have any utility or they are so far up their idea and tech that they think it will produce value by itself. Unfortunately, most things end here. For most, this value will never surpass the simple value of "exchanging value" or "storing value" (both are important I agree, but we are talking about tech, not money).

However, that is not how it should be. Projects should be building and solving issues, adding utility and providing solutions, otherwise, we are stuck in a system which produces the point zero problem. This can get us cemented in the past with no hope of any future.

Check out cyber. It is a decentralized google with a mission to open the semantics field and decentralize the service of the internet with the use of blockchain and economic incentives.

It's not an idea. Both, the chain and the initial app are working as planned. Yes, the project is still in testnets, but, it is 100% open-source and the idea is provably implemented.

Cyber managed to prove that it can change the current search mechanism and make it work. The main use of the network is to build an open, decentralized knowledge graph, by the users themselves to create a shared database of knowledge. All transactions in the network are made to target that purpose in one way or another.

Cyber utilizes the use of computation, bandwidth and storage and produces a useful computer with several use-cases, with the most obvious is the creation of an open and provable search in a trustless and censorship-free environment without the illnesses of web2 tech..

Some stores use it to store the production chain metadata of their products : when it was produced, by whom, etc, and make this information public. As anything stored in the blockchain can't easily be faked, it allows customers to check the authenticity of what they are buying (ie where has this product been farmed, cooked, by whom, etc).

I check out the websites of companies mentioned in blockchain press pretty regularly. I haven’t figured out what a lot of them do.

The few times I’ve dig into a blockchain company that had a $100MM theft, it’s hard to understand where those “assets” came from, and who the customers/users were that deposited those assets, how the businesses were built, etc.

I’m guessing some are smoke and mirrors, and others are stealthy and/or opportunistic.

If there’s a list of viable blockchain companies doing business that is documented and can be understood, would love to get a pointer to it.

Forbes - 30+ Examples of Blockchain in Practice https://www.forbes.com/sites/bernardmarr/2018/05/14/30-real-...

The biggest use "in the wild" right now is in multi-party smart contracts where no one party is an authority of trust.

Blockchain has one genius product: cryptocurrencies. They totally have a use, by technology enthusiasts, people with deep distrust of governments, and last but not least, criminals. You can’t have a trustless, decentralised currency using other technologies at present.

As for other applications, yeah they are all made up so far. And anticipating any other comments, the world could easily do without cryptocurrencies.

Blockchain might be a relevant tool for a group of strangers to maintain books (a database) which cannot be easily tampered with (or it is virtually impossible). Prime example is sound money. But it could go beyond that. Say you can run a land registry or domain name system this way.

government land ownership records

this is being tried already in parts of the world

here: the ledger is public, the government is a body made of many independent small entities with not necessarily aligned incentives

would help to avoid corruption and maintain a legitimate source of truth

Blockchain has existed as a widespread technology for what, a little over a decade now? And people are already proclaiming its fundamental uselessness?

Seems like a massive lack of patience and long term thinking. It took nearly a century for the first airplane to go anywhere and another half-century for it to be widespread and practical.

The author of this post seems to dislike “blockchain” as a concept https://news.ycombinator.com/item?id=22703081

Double Spending

Paid services that require billing in unreliable networks. If IOTA had a high quality implementation, it would be really useful I think. (Obviously it suffers severe problems, both on the spec and implementation side since years; and they are slow to fix them) On the other hand, I think "standard blockchain" isn't enough. I'm no expert but mainstream blockchain solutions have some not so nice properties: processing power/energy waste, vulnerability to 50% attacks, slow processing.

That said, cryptographically signed GDPR conforming Event sourcing might be a good idea. I wonder if that would still count as blockchain though.

The main use case for blockchain is as a financial instrument to represent shares in a community's economy. A community economy is like a national economy except that the value of its currency does not rely on the coercive legal powers of a government. Aside from that, it functions exactly like any normal economy; if participants in this economy (token holders) export more services than they import, then their cryptocurrency's total value (market cap) will go up relative to other national currencies.

I think cryptocurrency is the best use case for blockchain technology. It is a very narrow use case but an extremely important one. It gives a group of people access to powerful financial tools that are otherwise completely out of reach for regular people.

The idea that communities can have their own micro-economies is going to be radical and completely change how we do business.

One specific use case which I've identified is the ability to use a cryptocurrency to represent shares in a business. It offers small businesses powerful financial tools which are not available to normal businesses of that size. For example, you can use business profits to do token buybacks (which are like share buyback which corporations use); with decentralized exchanges, it's even possible to do buybacks without relying on any intermediaries (e.g. no accountants or brokers). Token buybacks are a simpler alternative to distributing dividends to shareholders. Token buybacks (and subsequent burning of bought tokens) allow a company to pay shareholders through capital appreciation by diluting the cryptocurrency's total supply; this gives small businesses access to the same financial tools which big corporations use to reduce their shareholders' tax liability among other things (capital gains are typically taxed much lower than income and only paid when they are realized; I.e. when tokens are sold). Also, having a tradable cryptocurrency gives a business exposure to influential outsiders (e.g. journalists, wealthy investors, politicians) who have an incentive to participate in the underlying small business and then use their influence to help grow that business and its cryptocurrency. 'Airdrops' can also be carried out in highly targeted ways to create a favorable economic and political environment for the business.

With cryptocurrency it's also possible to pay contributors (employees) using the token instead of fiat. It also helps make sure that contributors' incentives are aligned with all other stakeholders. I'm currently part of a business which works like this. We have 7 contributors and everyone has only been paid using crypto for the past few months. We have a buyback-and-burn deflationary mechanism in place so everyone knows that each token is (on average) guaranteed to always go up in value. You can also pay for marketing and other services using the token - I was quite surprised by how many people were willing accept our cryptocurrency in exchange for services; it feels like the majority of people.

Git comes to mind.

problem #1 - protect freedom, liberties

problem #2 - adaptation to the needs of the complex system like modern society

those are kind of ‘significant’ problems, technologies like Internet, blockchain etc, provide sequential approximations to the solution of those problems.

> I think the same is true for cryptocurrencies but I would like to keep those out of the discussion, if possible.

A bit strange to exclude the one and only answer to your question.

I’d like to go back to 1988 and ask “Is anyone actually using the Internet?”

I’m sure the responses would be similar. Blockchain is still in its infancy, give it a decade or two and I think you’ll be surprised how it became “an overnight success”.

Git uses, in fact, a "blockchain". There's no mining involved (although, given how hard some code reviews can get I'd argue there is still "proof of work" lol) and anyone can create new blocks and is free to accept or reject them.

Like someone else already said I think it's less about the "blockchain" and more about finding ways to decentralize traditionally centralized services.

I'm an old man, so let me show you how to frame thinking about blockchain.

I experienced the 90's, so let me tell you why email will never take off, since we have a trustworthy postal service:

1. Almost nobody you know has an email address, but everyone has a real address.

2. People want to have something they can touch, a personal, perfumed handwritten letter. Not a cold virtual thing with printed letters.

3. You can enclose a polaroid picture in an envelope, this is impossible with email.

4. If you really want, you can send a VHS video tape with the post. This is impossible with email.

5. They say email is faster, but if you need someone urgently, you just call them.

So therefore, email will never become as popular as sending envelope mails. I rest my case.

In this whole thread, there's not one mention of the word "scarcity". Blockchain allows for digital scarcity. For me, the problems that blockchain solves, it solves through the creation and enforcement of real digital scarcity.

I find that it's not hard to imagine some problems that exist due to the lack of digital scarcity (pre-blockchain). I invite you to open your mind and imagine some for yourself.

I think this question is a bit like asking "Are there any substantial examples of real problems solved by incorporating companies and turning them into publicly-traded corporations?"

This question may also have been baffling to most people when corporations had just been legalized.

The answer is; it solves problems for participants and creates problems for non-participants. That's why it will definitely succeed as an economic instrument.

Blockchain for reliable car history:

- Garages log maintenace + mileage.

- Accidents are logged.

- Spare part replacements are logged.

- Government logs changes of owners (maybe privacy concern here?).

You sell or buy a second hand car? You verify the blockchain history if everything checks out.

This is a nice use case since multiple parties come into contact with a car, and so a central entity is hard to create.

And as an added bonus, the transaction of changing car ownership can be done with a smart contract to atomically transfer both money and ownership. Less shady things.

Bitcoin solves a real problem: It creates a permanent fix for monetary inflation, which allows people to save money without being taxed on their savings.

The rest of "cryptocurrency" is snake oil. Most of it attempts to reintroduce inflation and undermine the fix which Bitcoin introduced. While they may come up with a bunch of reasons for their decision to mint new tokens - the sole purpose of the new inflation is to enrich the creators, who intend to exchange their zero production cost tokens for some other tangible wealth before the naive buyers of the tokens realize they've been scammed.

Building on top of Bitcoin is the way to solve real problems because each development strengthens the permanent fix on inflation and enables Bitcoin to be more accessible.

A "blockchain" is just a linked list where each tail item is content addressed.

Here’s some examples of things that blockchains can/do help with:

- Currencies that cannot be manipulated/controlled by a government / external forces (plenty of examples why that’s a real problem in history, including runaway inflationary policies, payments restricted from certain individuals eg sex workers)

- Cheap accounting (see digital autonomous companies), you can run a company with lower costs by programmatically handling all transactions. eg running a justgiving type site should be cheaper on a blockchain, in theory

- Fully traceable payments (i.e. knowing who paid who how much throughout history, makes paying taxes, illegal transactions easier)

- A single place where a piece of data can be guaranteed to be accurate (eg you can publish data on a blockchain and prove it was published then at a later date, and there’s no way to manipulate this)

There’s more, I’m sure... Whether these justify the hype or are big enough problems are different questions

Asking "what is blockchain good for other than cryptocurrencies" is like asking "what is internet good for other than websites" pre-broadband

Blockchain TODAY is the backbone for a $200B financial system that lets you store or transfer billions of dollars worth of value within minutes for cents in transaction fees, completely peer-to-peer with no middle men

Scalable blockchains will generalize this same benefit to let developers add crypto into any kind of application (just like we had web-apps, we'll have crypto-apps):

– Instant global p2p payments

– Completely transparent, efficient marketplaces / clearinghouses with no switching costs

– Ability for users to own their own data and assets, removing liability for platform operators but also eliminating lock-in

– Open source, open state, serverless code that runs directly on-chain and thus can be built on with no platform risk (google "blockchain composability")

– Software that can be governed / controlled by the users that have stake in it

Yes. Decentralized finance is coming and it's maybe the most important technology of the 21st century. If you want anything resembling autonomy and liberty in the future, and if you want to avoid ending up in a world straight out of a Black Mirror episode, I recommend supporting open-source monetary blockchain systems like Bitcoin and Ethereum. There will be an attempt at some point by governments to centralize blockchain technology. China is already doing this. Western societies should embrace freedom and openness in finance. Besides being aligned with our core principles, it's incredibly powerful, and it can power the capital infrastructure in very innovative ways if we let it.

To your point, cryptocurrency enables reconstructing the entire financial infrastructure on blockchain. Everything from car loans (https://twitter.com/DMMDAO) to rental real estate (https://twitter.com/RealTPlatform) to interest-bearing savings accounts (https://compound.finance/) to derivatives and trading (https://www.synthetix.io/), to decentralized storage (https://sia.tech/), etc. There's hundreds of projects I follow regularly and I find new ones cropping up all the time. There's a Cambrian explosion of apps in blockchain right now.

I recommend reading https://bankless.substack.com/ and https://thedefiant.substack.com/ to stay on top of the topic. Watch some of the presentations from ETHDenver 2020 that was held 2 months ago (https://www.youtube.com/channel/UCgz9NU06t_FkT0Py1Vadczw)

Follow some of the thought leaders on Twitter, et al. Tons of promise in this space.