Days are gone when businesses used to refer to blockchain as cryptocurrency. Yes, they have a connection but that does not mean both are the same concepts. In 1991, Stuat Haber and W Scott Srornetta described blockchain technology for the very first time. Without any doubt, this is one of the best inventions of this century that has given rise to many possibilities across sectors as well as industries.
Now it is evident that more and more digital marketers and entrepreneurs just like us are showing keen interest in understanding the basic algorithm of blockchain technology.
According to research, the market size of blockchain can grow from 3.0 billion to 39.7 billion (USD) by 2025. The growth rate is amazing, 67.3% (CAGR) during these five years.
But experts are saying that most of us are making here a great mistake. According to experts, we are trying to practice the best trends even without understanding the best as well as different ways to use the blockchain for business transformation.
In order to know the different ways of embracing it, we have to explore types of blockchain projects. I mean we have to explore the different roles of blockchain technology in various industries.
But before that, let’s recall one more time what is blockchain, its types and how they work actually-
Merriam Webster says that blockchain technology is actually an open as well as a distributed ledger with the capability of rightly recording transactions between parties efficiently in a variable and permanent way.
When we take the term ‘open’, you can understand that it is referring to the open-source nature of a codebase. Here this open-source code can build both private and public chains. The next term ‘ distributed ledger’ means that the ledger on which transactions will be recorded is shared by various participants in the blockchain. Or we can say that it will not be owned or even controlled by a single entity.
The blockchain aims to make the transactions more efficient as well as secure. Here no third-party will be involved. And as a result, the process will be able to reduce friction and transaction charges.
After agreeing on the transactions by the participants in the blockchain, it entered into the ledger, and later the transactions cannot be changed. Here cryptography makes these transactions verified as well as ensure the permanency of the records.
Now we know what blockchain technology is but we can understand it better if we explore the types of blockchain technology at the same time.
Generally, there are two types of blockchain such as public and private blockchain. Apart from this, there are other variations too such as consortium and hybrid blockchains. These are different types of blockchain technology but they also have some similarities too.
All types of blockchain have a cluster of nodes that functions on the P2P- peer-to-peer network system. In a network, every node comes with a copy of the shared ledger and that gets updated on a regular basis. Here each node is able to verify transactions, initiate and receive transactions. A node can also create blocks according to the requirements.
Now explore the mentioned four types of blockchain
Public blockchain- It is a non-restrictive as well as a permission-less ledger system. Anyone with the help of an internet connection can do a successful sign-in on a blockchain platform in order to be a part of a blockchain network. In this way, she/he also becomes an authorized node.
Once a person becomes a node or an active part of a blockchain, he/she can easily access the current and past records and do verification of the transactions. We can see the use of public blockchain in mining and exchanging cryptocurrencies. And that’s why the most common public blockchain examples are Litecoin blockchains, Ethereum, and Bitcoins. If you properly follow the security rules and methods, it is the safest blockchain option for you. If you do not follow the rules or security protocols properly, some risks can arise.
Private blockchain- It is just the opposite of public blockchain. I mean private blockchain is a restrictive or permission-based operative in a closed network. Generally, we can see the uses of private blockchain within an organization or enterprise. In an enterprise or organization, there will be selected participants of the blockchain network.
The authorization, security, accessibility, and permission depend on the organization or the enterprise. The use of private blockchain seems similar to the public blockchain uses but the private blockchain is restrictive as well as small network.
We can see the use of private blockchain in supply chain management, digital identity, voting, asset ownership, and so on. Private blockchain practice is present in Corda, Fabric, and Sawtooth as these are multichain and hyper ledger projects.
Consortium blockchain- It is known as a semi-decentralized type blockchain network. More than one organization or enterprise can manage a consortium blockchain. We can say that this is the complete opposite of a private blockchain system as private blockchain is managed by only one organization. In a consortium blockchain, more than one organization can play as a node to do mining and exchange information. Generally, banks and other government organizations use such blockchain such as R3, Energy web foundation, and so on.
Hybrid blockchain- we can say that the hybrid blockchain is a perfect blend of private and public blockchain technology. It uses the features of both blockchains and comes with the benefits of both. In this way, one will be able to get a private permission-based system as well as a permission-less system at the same time. It helps users to control data access. I mean an organization will be able to control the access of data in the blockchain and run without facing any security problem.
A lot of organizations use this hybrid blockchain technology to keep a limited part of data publicly accessible and store the rest of data confidentiality in the private network with full-on security.
According to users, this is one of the most flexible blockchain types as it lets users join a private blockchain along with multiple public blockchains.
Now we have basic knowledge of blockchain and blockchain types. But it is going to help a business in 2020 and in the coming years that we can easily know from the blockchain project ideas available today.
Generally, there are popular 5 types of blockchain projects based on their degree of centralization. If we explore those properly, we can easily choose the best type or category of blockchain projects for our business requirements.
This is one of the most demanded blockchain solutions. FOMO stands for Fear of Missing Out. From the term, we can understand that the solution will eliminate the chances to remain behind or not updated in the market. It is a complete centralized solution. Generally, a single company uses this way for the in-house requirements. Sometimes, a company can accept a very limited set of partners while using FOMO solutions.
Companies that do not hold meetings on a regular basis or somehow lacking the required pace in order to stay competitive in the market, can take the help of such a solution.
According to experts, this category of blockchain projects generally does not create a lot of value for a business. It seems just a marketing act of business. With the help of this solution, companies try to boost the chances of getting a second look or attention from their target audiences. Your competitors can also do the same thing in fear of missing out.
Along with a very limited number of benefits, the FOMO solution can also add some hassles. For example, we can say that improperly planed blockchain projects can overburden the existing ecosystem and increase the expense. And that’s why a lot of leaders doubt the future or benefits of this solution. But the actual problem is that they were focusing as well as investing in the wrong use cases of blockchain technology.
This is the second category where blockchain projects. The aim of this kind of solution is to define the known problems or opportunities related to record-keeping. Generally, these problems take place due to improper serving of data in the existing system.
These problems can be solved by opportunistic solutions. Another great benefit of such a solution is that even without being lead to a live operational platform, it can add value.
According to the CIO of the Middle astern bank, they might stop the blockchain initiative within the next six months yet they feel it was helpful to them. It helped them with a better understanding of the technology and even their staff started to gain new technology skills. The CIO also accepted that it was also a great PR for the bank.
Just like other categories, this one also comes with a problem. With this type of blockchain project, one may lose control over data and contacts after some time.
If you ask for an example of opportunistic blockchain projects, a solution created by Depository Trust and clearing corporation in order to properly regulate records from credit-default swaps is the best example that we can offer you in 2020.
Trojan Horse projects have also made a place into the list of blockchain project ideas in 2020. According to experts, this kind of project mainly adds a lot of value to the entire industry.
Without any doubt, these projects are attractive and powered by big brands to address the common as well as major problems in a specific industry. But here we may face a difficult as it asks the users to share their sensitive information as well as share some control. It can create market consolidation for the prime blockchain owner. So, you can understand that here you need to invite various groups of ecosystems in order to participate in its processing.
When it comes to the example of Trojan Horse projects, we can take the name of a food-tracking blockchain. Generally, this system is designed by blockchain instead of a traditional centralized one. It takes comparatively less time as well as effort to recognize the point where the items were replaced and the responsible person for and how to prevent it in near future at the same time.
This solution or category of blockchain projects helps users to access the records in real-time and it can also prevent lots of people from taking expiry products. When all the users will agree to share their personal information on the network only then getting this kind of benefit will be possible.
Experts say that this kind of project is effective and gives birth to a lot of new potentials in the industry. But here too we may have to face a risk. It may become reliant on the owner’s technology and get locked in the contract term. But we can expect that with time, it will help in getting more control over the market as it will be loaded with lots of user data.
Apart from this, we can also say that the business currencies that are associated with the system where Trojan Horse Blockchain projects are connected, generally trade at a higher risk.
The revolutionary blockchain project is the next blockchain project that has grabbed the attention of business leaders. Generally, these blockchain types mature with time. The sole aim of these projects is to improve the system with time and that’s why they employ tokens with proper decentralized governance.
When it comes to the example of such a blockchain application, we can take one from UEFA. UEFA is the central committee for European Football. It works with two Swiss technology companies such as SecuTix and TiXnGO. It takes the help of these companies to create an evolutionary blockchain platform. The platform will work like an equitable and safer market to sell the football tournament tickets.
This blockchain-powered platform encourages people to download TiXnGO and SecuTiX applications. Here tickets come in form of blockchain tokens so that keeping the real-time record of the ticket sales and connecting it to the ownership details become easy.
So, after buying a ticket, it will be easy to give it to a friend with the help of those applications. The transfer details will also be stored in that ecosystem. If you want to sell it in the open market, the applications will also help them. In this way, black marketing or overpricing can be avoided.
In comparison with Trojan Horse Projects, this solution trade at a lower risk for its participants.
Blockchain native solutions are also considered in the list of top blockchain project ideas in 2020. Generally, these solutions get developed by start-ups or an extended team of an existing organization.
The sole aim of such solutions is to develop a new market with amazing opportunities or to properly disrupt an already existed ecosystem.
According to experts, they can start with different perspectives but after a time, they all are supposed to move according to the direction of decentralized governance.
When it comes to the examples of blockchain project ideas that use blockchain native solutions, we will get two industries such as Sports and Education.
In the education sector, we can see these blockchain project ideas as a non-profit digital education society. These platforms or societies will help students as well as teachers to come together and learn new things without even worrying about payments or learning exchanges. Woolf University is a great example of such blockchain project ideas. It has created by some Cambridge and Oxford scholars.
In the gaming sector, with the help of these blockchain project ideas, creators will be able to let users create their own tokens in order to better support their players. A great example of this practice is Enjinn.
According to experts, the blockchain native solutions may add new business opportunities but they also come with major currency risks. So, it will be a great option only to those users who can manage their own data and eager to experiment with the emerging concept of decentralization.
We hope, this blog has helped you to understand blockchain technology, blockchain types, and approaches in 2020. So, now picking the best solution to satisfy the emerging needs of your business will not be a problem anymore.
If you have more doubts or want a detailed discussion to know how to exactly fir it with your business, you can write to us at email@example.com at any time. You can share your experience with this blog in the comment box. We will be happy to hear some words from you.
That’s all for today! We’ll be back with another exciting blog!