The word “bitcoin” was a top search on Google this year, as everyone who didn’t understand the cryptocurrency (which was most of us) rushed to learn how it works and how they could make money off of it. Some people did make money, at least on paper. The price of one coin surged from less than $1,000 on January 1, 2017 to more than $18,000 by mid-December (as we write this).
But bitcoin’s value jump was probably not the most important event in crypto this year. It was the decentralized ledger technology that tracks bitcoin transactions–known as a blockchain–that really promised to shake up the world. This year, developers came up with hundreds of new use-cases for blockchains, and 2018 is likely to see a lot more exciting activity.
“As [blockchain] has joined the mainstream, it’s piqued the interest of millions of new people,” says Ben Siegel, impact policy manager at ConsenSys, an Ethereum development studio in Brooklyn. “We’re going to see a massive new influx of talent and brains into the space and that’s going to blow the roof off. We’ll see new ideas popping up all over the place.”
Here are a few ways blockchains could revolutionize 2018:
Investing: Initial coin offerings, or ICOs, raised more than $4 billion this year. The market–which sees entrepreneurs issue their own specific coins or tokens direct to the public–already surpasses the value of early-stage venture financing. Regulators from the U.S. to Hong Kong have warned investors about fraudulent sales and even terrorist involvement. But many also looked to steer issuers from falling foul of securities laws, rather than seeking to ban ICOs entirely.
“I think we’re going to see a lot of traditional companies that aren’t blockchain-focused using ICOs as a mechanism to raise capital because it’s so much more efficient,” says Tiana Laurence, cofounder of blockchain developer Factom and author of the book Blockchain For Dummies.
ICOs allow startups to raise money from their future customers (who are rewarded with tokens they can use to buy goods and services from the company when it launches). They also offer a way to bypass venture capital firms and banks who want equity or high-interest payments in return for their money and who often serve only certain types of startups.
Media: Tokens have a dual purpose. Startups can sell them to raise capital, and they also use them to incentivize participation in their networks. Take PROPS by YouNow, a blockchain-based competitor to YouTube that’s launching a new currency in January. It rewards people for uploading content, adding in new friends, developing new business models on the platform, and other activity. YouTube celebrities like Casey Neistat and Phil DeFranco are investors.
“Digital media today is controlled by two or three large players who amass hundreds of millions of dollars in enterprise value. Little of it goes to the people who constitute the network,” CEO Adi Sideman tells Fast Company. “Through blockchain, we can actually reward those people who are building the network alongside us.” Other tokenized media ideas include Everipedia, an alternative to Wikipedia, and Civil, a blockchain journalism platform.
Public records: Blockchains create permanent records of transactions as they happen. They’re thought to be inviolable because the record is spread across multiple computers making up a network, so hackers would have to hack every single computer to make a change. Because of this level of safety, several governments have started exploring putting public records on digital ledgers, believing they’re less corruptible than centralized databases overseen by a few officials. Estonia, already an e-government pioneer, has one project allowing citizens to access their medical records. And it’s piloted e-voting for shareholders to express themselves at annual general meetings.
The Republic of Georgia is putting land titles on a distributed ledger. Such systems could be bad news for the land title insurance industry, which covers new homeowners from unresolved claims on their land. Blockchain titling shows everyone exactly who owns what. “As soon as you put titling on a blockchain, you don’t have to pay anyone to insure something that you know to be a fact,” says Lou Kerner, an investor in blockchain startups.
Hardware convergence: Laurence expects blockchain increasingly to merge with other emerging technologies including machine learning and the internet of things (the idea that machines, like cars and wind turbines, become part of the same network as your PC or phone). Factom is working with a Department of Homeland Security grant to authenticate data derived from IoT devices like surveillance cameras (to prevent the data being altered or spoofed). And its technology can help validate official documents like passports. Another example are these coffee bean kiosks that use machine learning and blockchain to grade beans and get better prices for smallholder farmers.
Aid and international development: This year, several aid agencies, including the United Nations’ World Food Programme, started exploring blockchains for aid payments. Sending money across borders using cryptocurrencies potentially reduces fraud–because the blockchain records every step of the transaction–and lowers transaction fees. “Smart contracts” allow aid to be delivered with conditions: for example, payments are released only if recipients can confirm they’re the correct beneficiary. Unicef and the World Bank are both set to launch blockchain projects next year.
These examples are just the tip of the iceberg. In 2018, blockchain could be adopted for a slew of other uses, including health insurance, medical data, cleaning up the advertising industry, voting, improving food safety, renewable energy, enabling refugees to own their digital identity, helping the homeless, and even orchestrating a universal basic income (not to mention a whole load of important applications in the financial services industry).
In other words, blockchain is much more than bitcoin. It has potential to help humanity in all sorts of ways, spreading wealth and opportunity more widely. “It’s cool that bitcoin is skyrocketing but we need to be talking about [issues like] self-sovereign identity, the 2 billion unbanked people in the world, and how we can open up new markets to include people in the economy,” says Siegel, at ConsenSys.
“Social impact has to be the dialogue driver or potentially we’re going to lose public trust. The most damaging thing as a space is if we’re simply [developing] a tool for making the rich richer.”