Bitcoin Forum

Hey all, I've been reading a lot about blockchain tech recently and wanted to know what you all think are the best use cases for blockchain tech.

storing valuable data (including logic data) in a transactional database

• basic money system (check)
• distributed domain name system (check)
• register of property ownership
• identification tokens
• proof of authorship
• proof of existence
• contracts
• distributed crypto public key system

Probably dozens if not hundreds more ideas out there. Including ones people are working on but not telling us about yet (I'm fairly sure people are working on Bitcoin side chain ideas right now in anticipation of that extension scheme going online).

Money is the only strong use case right now

The blockchain can only make sure the data on its ledger is secure. How to interpret that data is up to each user. The most easy and widely accepted interpretation is using that data to represent money, thus make those data tradable on exchanges and commerce. The exchange rate represent people's acceptance of this interpretation (a price of 0 indicate that no one accept bitcoin as money)

If you want those data to represent something else like stocks, properties, contracts, then there are two difficulties:


1. The ownership problem

You can and only can have total ownership for the data on blockchain, nothing else. In order to have ownership for stocks and properties, you have to rely on some third party authorities that registers the ownership of those things, then it defeats the purpose of using blockchain



2. The interpretation problem

If you want to use blockchain data to represent something else, peopel must reach agreement on the meaning of those data, and the agreement can be breached when one of them refuse to interpret the data as planned. In one word, you have no way to enforce such a mapping between blockchain data and real world objects without the involvement of a trusted third party. Then it also defeats the purpose of using blockchain

This is not the case when data is used to present money, because even if some users refuse to accept it as money, there are others still accept it as money, people can sell it at market price, thus its value as money is decided by all the exchanges around the world and all the merchants accept it as payment medium

Of course you can also establish exchanges for blockchain based stock/property, thus reduce the trading risk. But still, no one can 100% guarantee that the piece of the data you get can get you some dividend or a house to live, there is no way to enforce it without an authority

It's the same for smart contract: If one side of the contract refuse to follow the contract because he presented a different interpretation of the same contract, then the dispute must be solved by an authority, which defeated the purpose of using blockchain: If you anyway have to rely on authority, why do you use blockchain at the first place?

To a large extent, I do not share your concerns:

1. Because the existence and type of data embedded into the blockchain can be independently verified, there is no problem by using a third party to register ownership rights, because if the ownership is not properly registered you are not obligated to pay for the (non-existent) ownership.

2. There is no significant problem with interpretation, if the guidelines to interpret certain types of data are widely published and relied on by a larger number of people. Imagine a stock exchange using the blockchain suddenly changing the data interpretation leading to changes in stock allocation for a large number of users: People would protest and demand enforcement of the original rules, probably launching lawsuits for fraud.
That said, the interpretation of certain data structures could also be stored in the blockchain as well.

Imho the problems you see boil down to the very general problem of contracts in the real world: You can't be 100% sure that a party fulfills its obligations. Blockchains obviously can't solve this problem, but they can eliminate fraud by forging ownership rights because they greatly increase transparency.

ya.ya.yo!

The key is to make sure the third party is not compromised, which is much easier to do than compromising the blockchain

So in real world, this third party must be backed by law enforcement to ensure its authority, typically a government organization under supervise/audit. If there is no consequence of violating the contract, then it is enough to have a group of rouge user to destroy the whole credibility of the blockchain contracts. Protests and lawsuits does not help since the law enforcement are not responsible for interpretation of the mapping: If the mapping is totally voluntarily established, then it holds no legal status

Of course you can built in this interpretation into the blockchain like Ethereum, but it still does not grant it legal status: In a traditional contract, the personal signature once signed have legal status. But so far no law give legal status for a digital signature on blockchain, since it can be stolen, forged, compromised in many ways. Only government issued digital signature have legal status

how about digital assests on the blockchain

Bitcoin itself is the digital asset on the blockchain

Multiple currencies on multiple blockchains is the best use case at the moment. Alternative currencies are what put the 'decentralized' into decentralized currency. Without them, all we would have is a centralized digital currency called Bitcoin.

One use is the smart contract which is hot topic recently. And it can be used to trade stock, option, future or forex etc

Contracts are a great way, surprised no one has made a solution for that better.
If I forged someones signature, and I presented it to someone, that contract would have been technically signed by them, and no way of proving if it was, or if it wasn't signed by the actual person.
So by presenting a technology that allows everyone to see and verify this contract, and that it was signed by the original user, then it was legit.
Right now the sign message function of bitcoin is similar.

How do you define STRONG?                   

that can be useful for the majority or something important

i would add gaming on the blockchain as another one, if extended for competitive game scene and integrated with a bitcoin pay system

Because this is not that easy. Smart contracts are something that everybody talk about at the moment, especially with the Ethereum release. This is essentialy a Bitcoin 2.0 and it will take time to properly develop.

Just until 7 years ago, we couldn't even find the right consensus for the stuff Bitcoin is doing at the moment. But we found it. I am sure smart contracts are the future and they will be properly developed in the future.

What I define by strong is: ability to effectively apply the blockchain to a particular use case. Either it saves the particular use case: money, time or helps with it's efficiency.

What about a bitcoin token system applied to high end consumer goods. With this token that the end user receives, he or she can verify that it comes from a particular manufacturer, thus guaranteeing its authenticity.

This is one I've been thinking about.

I agree that bitcoins should be kept on-chain... but this topic is more about other innovative things we could do with the blockchain.

Check my earlier comment: