where to use blockchain technology outside of the financial sector?

The co-founder of Ethereum (ETH), Vitalik Buterinhas been vocal about non-financial applications of blockchain technology recently and released a paper on June 12 listing some use cases.

Vitalik Buterin. Source: Bankless/YouTube

In a document entitled “Where to use a blockchain in non-financial applications“, the architect of Ethereum said that one of the biggest challenges in a crypto account system is the issue of private key changes.

He said one use case for blockchain can be in “user account key changes and recovery.”

In the document “Decentralized Society(DeSoc) co-authored by Buterin, which explores the idea of ​​non-transferable tokens Soulbound Tokens (SBT), he suggests the use of profiles “that can solve this problem” to preserve inaccessibility, social recovery (or “community recovery”).

A second use case for blockchain can be in “modifying and revoking attestations.” Buterin claims that issuing digital registration off-chain or on-chain using non-fungible tokens (NFTs) would make it difficult to modify and revoke when the need arises.

“So instead, we can opt for a hybrid solution: perform the first certification by a signed message off-chain, and do the revocations on-chain,” he said.

He noted that this is the approach used by OpenCertsa blockchain platform that generates crypto protections for diplomas.

Another example of the value of blockchains in the non-financial sector is the “commitment to scarcity”. Simply put, blockchains can be used to identify whether an attestation has a proven limited quantity or not, which can then affect the effectiveness of that attestation – i.e. the more limited it is, the more it has value.

Blockchains are also powerful because they create “common knowledge”, meaning they can allow participants to access data on the chain and who else can access it. This facilitates coordination between many parties.

Another potential use case Buterin discussed is open-source metrics, a concept still in its infancy that would measure diversity and decentralization.

“An ideal voting mechanism would somehow keep diversity in mind, giving more weight to projects that are not just supported by the most tokens or even humans, but by the most people. really distinct perspectives,” Buterin said.

Buterin also noted that a “controversial” use case for blockchains is data storage. He said that since there are other data storage tools that can better respect user privacy, blockchains are not really necessary. However, in some cases, blockchains can be useful for storing data:

“Blockchains as data centers for short-text records can be marginal or significant, but I expect at least some of this type of use to continue to occur. Blockchains are incredibly convenient for cheap and reliable data recovery, where the data continues to be recoverable whether the application has two users or two million.”

This article appeared after Buterin earlier this year explored the idea of ​​“soulbound tokens” which are tokens that cannot be sold or separated from their owners. In mid-May, he co-authored the aforementioned research paper explaining how these non-transferable tokens can create a richer and pluralistic ecosystem within Ethereum, called the “Decentralized Society” (DeSoc).

Buterin argued that tokens can be used to encode social relationships of trust. However, this has not been without controversy.

“Identity and reputation are complex and subjective variables that can never be adequately characterized by numbers on a blockchain,” said declared Polynya, a pseudonymous Ethereum researcher, in early June.

Buterin also discussed SBTs on the recent podcast Bankless :

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