I constantly see examples where you need a blockchain to achieve some completely new behavior and solve problems in interesting ways. I have noticed many on the outside are not aware of these as they only hear about crypto from the media. This causes confusion and creates a large disconnect between those who use the technology and those who don’t. I will attempt to catalog some of the examples where you NEED a blockchain and doing so lets you accomplish cool things.
Starting in reverse
Peer to peer cash
The picture below is from 2014. During the conflict in Ukraine, those fighting for Ukraine would find Western journalists’ TV cameras and hold up posters with QR codes. If you were watching CNN or Fox at that time, you could have (paused your TV, then) scanned the QR code and donated directly to those fighters. They would get the money in minutes with no middlemen interfering or taking a cut.
This is just the extreme version of Bitcoin’s primary innovation – a global monetary system where you can send money to anyone in the world in minutes with no middlemen or gatekeepers.
By default an account has one private key and anyone with the private key has access to the assets in the account. However you can create special accounts with 2, 3, or any number of signatures are required to spend the assets. This greatly simplifies complicated legal arrangements of multi-party custody without requiring third party custody at all. This type of account can be used to give flexible security schemes, governance over shared treasury within an organization, etc.
Digital Asset Dispenser
Imagine a digital vending machine loaded up with digital items that nobody could hack, counterfeit, or cheat. Any artist could sell their digital artwork to anyone in the world. You send money to the dispenser and you get the asset in return. No marketplace fees. No app store taking 30% …
Self-Amending Software Protocols
Blockchains can record voting on-chain as well as financial transactions. Some protocols are built to be “self-amending” meaning community members vote whether to pass technical upgrades to the protocol and the upgrade is automatically implemented if the resolution passes. The protocol will continue to update as long as someone contributes code and some people vote.
Smart contracts enable all sorts of interesting ways to define, trade, and financialize digital assets. These assets and tools are compatible in novel ways. For example, there exist peer to peer lending protocols (which by the way are much better product than you’ll see at the banks). You could deposit collateral and start earning interest immediately. That collateral earning interest is represented by a digital asset. You could trade that interest-bearing digital asset for other digital assets or put the asset to work earning additional yield in another protocol, allowing you to stack cashflows (not without risks).
This idea is inspired by “poverty finance” where extremely poor people come up with innovative solutions to save in environments where resources are scarce and they have no access financial services. This “lottery” works where everyone pools their money together, and the pooled money is lent out in a peer-to-peer lending protocol. At the end of the period, the “losers” get all their money back while the winner gets their money back plus the interest earned over the period.
To be continued, This brain dump is all the stuff I could think of invented by like 2016. I haven’t even gotten to the good stuff yet.