Categories of Blockchain Applications

Categorical different types of blockchain applications

There are two categorically different types of blockchain applications ¹. They can be distinguished based on the following questions:

1. Does the blockchain hold the default source of truth?
2. Does it hold a (possibly incorrect) view of reality?

Cryptocurrency is an application of blockchain that falls into the first category. Specifically, because cryptocurrency is a concept spawned and controlled by blockchains, they hold the default source of truth.

Other kinds of applications fall into the second category. In this category, we can further distinguish between:

• Things whose existence and ownership rely solely on database entries, such as land ownership rights, companies, patents. These data could be ported to a blockchain application of the first type.
• Physical assets and their states (location, quality, temperature, etc.), where the view of the asset stored on blockchain could be outdated, incorrectly measured, or wrong in some other ways.

Blockchain in enterprise and industry

Classification comes from ¹

1. Supply Chain
2. Internet of Things Storage, Compute, and Management
3. Metered Access to Resources and Services
4. Digital Rights and IP Management
5. Data Management
6. Attestation and Proof of Existence: a blockchain can be used to record evidence of existence of data or documents by creating timestamped record of a cryptographic hash of the contents of those documents.
7. Interdivisional Accounting
8. Corporate Affairs (Board and Shareholders Voting and Registration): The voting authorities of board members or shareholders in companies can be recorded and proxied on a blockchain. Smart contracts on blockchains can use that record to adjudicate votes conducted on the blockchain for specific motions.

Blockchain in financial services

Classification comes from ¹

1. Digital Currency: New forms of money can be implemented on blockchains, but these can also serve as a foundation for incentive models that support integrity for many blockchain systems.
2. International payments
3. Reconciliation for correspondent banking: reciprocal nostro/vostro accounts can be replaced by a single shared ledger. This helps creating a single shared view of truth between two banks, which can be maintained in real time.
4. Securities settlement
5. Markets
6. Trade finance: the blockchain can be used to evidence trade-related documents in order to reduce lending risk and improve access to finance for industry.

Blockchain in Government Services

Classification comes from ¹

1. Registries and identity: including the identities and attributes of persons, companies, or devices, licensing, qualitifcations, and certifications
2. Grants and social security: smart contracts could automate the process coordination to apply for, decide on, and distribute payments for grants and social security.
3. Quota management
4. Taxation