Forget Crypto Winter: Blockchain Applications in the Real World Are Still Incredible
The crypto winter is only temporary. Blockchain applications are rapidly expanding,
according to Johannes Schweifer, CEO and Co-Founder of CoreLedger.
With financial markets in disarray and sentiment gloomy, the hype and
speculation surrounding cryptocurrency and blockchain has come to a halt.
The days of NFTs fetching millions of dollars are long gone. Amid the fallout from the crypto
markets, digital images of cute animals or meme culture are increasingly being labelled as scams.
Every dark cloud, thankfully, has a silver lining. Bear markets signal the beginning of
the building season. A new generation of builders could emerge. Companies must buckle down and
continue to develop practical innovations that will result in greater utility and efficiency.
They are capable of overcoming some of the most difficult challenges we face today.
NFTs are only one type of tokenisation application. Aside from art, many other items can
be converted into digital tokens. This makes any asset available and tradeable on the blockchain.
So, where are these practical innovations being created? Here are some examples of
how blockchain for business is becoming an increasingly important part of our lives.
What is a Crypto Winter? Agriculture in Emerging Markets
As the world recovers from the pandemic, farmers in Argentina have been dealing with
a falling peso and financial uncertainty. Inflation has risen to more than 50%.
Argentina produces more than 40% of the world's soybean oil and soymeal.
Farmers are under pressure to liquefy their real, physical assets as a result of this.
It also exposes them to undercutting by middlemen.
This is a common problem in agriculture and livestock, particularly in developing countries.
Their fiat currency is continually devalued.
Farmers may be able to hedge against inflation by tokenising agricultural assets.
Blockchain technology also provides them with access to capital provided by national
and international investors. This is a solution that has been used on Bolivian cattle ranches.
A tokenised Revenue Participation model allows investors from all over the world to participate.
Each token represents a percentage of the revenue or a form of digital barter.
Winter of Crypto? Digital swapping is gaining momentum
So, how is this possible? To increase liquidity in a token economy by enabling
instantaneous value conversion, all that is required is digital swap technology.
This enables a peer-to-peer contract exchange that allows parties to trade tokens of varying values.
It connects any number of swaps and payments and chooses the best
path through thousands of available trades based on predefined criteria.
In essence, this allows anything to be traded for anything else. While this is an exciting
development, more needs to be done to raise awareness of the technology in order for it to
reach its full potential. The greater the number of possible trades, the more useful it becomes.
More collaboration between businesses, regulatory bodies,
and institutions is also required to facilitate this. To establish appropriate guidelines, the
perception of technology must shift from fear of the unknown to an understanding of its benefits.
While still in its early stages, the total tokenised asset market is estimated to be
worth less than $20 billion. The total size of the digital asset market is up to $350 billion,
demonstrating the enormous potential for growth.
Combating Climate Change with Crypto Winter
Another critical area where tokenisation is being used successfully is in the
fight against climate change. Carbon credits are quantifiable,
verifiable emission reductions resulting from certified climate action projects.
Companies can use them to reduce, eliminate, or avoid glasshouse gas (GHG) emissions.
They are transferrable instruments that have been certified by governments or
independent certification bodies to represent a reduction in CO2 emissions of one metric tonne,
or an equivalent amount of other GHGs.
A credit holder can thus use a credit to offset their own GHG reduction goals.
Tokenising carbon credits aims to address problems with credit quality,
operational transparency, and project measurement and evaluation. By tokenising credits,
blockchain enables greater market transparency and integrity. Data is stored in a way
that eliminates double counting while also making it tradable and globally accessible.
There are already up to 22 million retired credits on the blockchain.
The implementation of decentralised protocols that integrate with carbon credit markets has
sparked new ideas for increasing transparency and accountability. This is done while providing
avenues to meet rising demand, which will drive additional capital to climate-positive projects.
This is where regulatory bodies and businesses must collaborate to
eliminate opacity and achieve a nett positive impact on the environment.
Intellectual Property Protection (IPs)
To ensure confidentiality and immutability,
legal documents and other forms of agreements or contracts are frequently shared in print form.
Tokenisation makes any asset available and tradeable on the blockchain.
Documents and other forms of data, on the other hand,
enable businesses to use tokenisation for increased digital security and safe data transfer.
The blockchain records are unchangeable (they cannot be changed and only added on to).
This provides validatable proof without the need for an intermediary or notary,
whether in the form of digital claims, certificates, or proof of ownership.
This levelled the playing field for copyright and intellectual property management. In long-running
court cases, legal fees for establishing proof of ownership can be prohibitively expensive.
Singers who want to protect the originality of their work and scientists who want to
patent their technology now have another option in addition to traditional methods.
Since 2019, this has been experimented with. Different countries and regions have different
policies regarding the legality of digital records. This is gradually changing as the complex
underlying technology is transformed into simple apps that provide a unified user experience.
Even traditionally conservative jurisdictions, such as China, have begun to embrace blockchain
to assist legal courts in dealing with cases of piracy and copyright infringement.
Blockchain applications in business go beyond the mentioned agriculture in emerging
economies. The environment and IP protection are great examples of the benefits it can provide.
Blockchain companies must collaborate with governments and regulatory bodies
to develop the most effective and practical methods of implementing the technology.
This is done to dispel misinformation and provide appropriate guidelines. Only then will we have
a secure and long-term environment in which stakeholders can use the applications effectively.