The blockchain revolution began with decentralised networks such as Bitcoin around 2008. In the last 11 years, a lot has changed where blockchain platforms moved from currencies to more advanced applications known as smart contracts and Dapps (decentralised applications). Particularly with the advent of Ethereum in 2015, it had a big impact. Now developers could write Turing-complete applications in Solidity programming language, something which was not possible with Bitcoin. But, why do we even need public blockchains in the first place, one may ask particularly when other large companies like IBM, Amazon, Oracle and many others have their own set of solutions?
According to experts, the answer is decentralisation and immutability/transparency of data on a network which is available to anyone to use and contribute. Also, no single entity has control over the network, making the network secure and free from centralised manipulation. This is the very reason that we have witnessed financial organisations like Microsoft, JP Morgan, Santander, Google and more recognise the value of Ethereum and even used it for enterprise use cases.
With so much happening on a single public blockchain like Ethereum, no wonder it has the largest community of developers. It is estimated that Ethereum has about more 4x developers compared to any other ecosystem of open source public blockchain. Also, the demand for Solidity programming language is double compared to other programming languages used in blockchain applications as late as mid of 2019. Moreover, Ethereum may soon be moving to Vyper – a Pythonic language to write smart contracts, which will make it easier for developers to write and deploy decentralised applications compared to Solidity.
Banks Beware: After Fintech You Have More Competition From Blockchains Like Ethereum
In 2019, one of the major events that cemented the value of Ethereum as a public blockchain was when Santander settled a $20 million bond with a client, without needing to rely on a single traditional bank for the transaction. Consequently, we also saw this year that many financial institutions showed interest in using Ethereum to issue securities. If you are surprised to know that a $20 million bond was issued on a public blockchain controlled by no bank, it may come as shocking to you that another $110 million (₹770 crore) was issued by a French financial company known as Societe General to clients as its first issuance on a public blockchain.
While 2018 was the year of crazy crowdfunding via Initial Coin Offerings (ICOs) on Ethereum, 2019 saw more meaningful financial deployments using public blockchains. Security Issuance via public blockchains gained incredible prominence in 2019, particularly in Europe. For instance, Latin America’s largest investment bank, Brazil’s Banco BTG Pactual announced plans to launch Security Token Offerings (STOs) on the Tezos blockchain in July 2019 worth over $1 billion or ₹7,000 crore (yes you can verify here). Here, the security issuance would need developers working on the Tezos platform to write smart contracts in a completely novel programming language developed by Tezos Foundation- called Michelson.
Gaming & Non Fungible Assets Are Also Taking Up For Ethereum
Let’s move onto yet another meaningful (and fun part) when it comes to public blockchains which are gaming and non-fungible assets. One big thing that happened was when global tech giant Microsoft deployed Non-Fungible Assets (NFAs) to reward developers on its loud platform for a program known as Azure Heroes.
Here again, the noteworthy thing is that NFAs were deployed on Ethereum public blockchain. The tokens rewarded to developers for their contributions could be exchanged with other assets like Ethereum or Bitcoin so for better incentives. Microsoft in May 2019 had already released its app development kit for Ethereum applications on Azure cloud. The reward program has been supported by Intel as well, which along with Microsoft are part of Enterprise Ethereum Alliance– a consortium of global companies working to advance the use cases of Ethereum public blockchain in the enterprise space.
To give another use case of a public blockchain for gaming and NFAs, Microsoft, game developer Eidos and Fabled Lands announced in December 2019 that they are jointly developing card games based on a 1980s best-selling gamebook using a VeChain– another popular public blockchain from Asia. Here again, game cards would be converted into non-fungible assets for trading and exchanging.
Non-fungible tokens represent individual ownership for each unique non-fungible asset- be it land, property, game cards/avatars, or in fact shoes based on Ethereum ERC 721 standard. In December 2019, shoemaker Nike just acquired a patent to tokenise footwear on Ethereum. In a document published on the U.S. Patent and Trademark Office and on December 10 2019, Nike revealed that it wants to have unique IDs and create ERC 721 tokens for some shoes. People can unlock these tokens known as “CryptoKick” by buying physical shoes and these tokens can then be connected with unique owner IDs to signify ownership.
Also in the gaming context, in late 2019 AMD- the chip maker joined the Blockchain Game Alliance, an industry group devoted to promoting and standardising the technologies for online gaming. As the first major hardware provider to join the alliance, AMD’s goal is to supply the CPU and GPU chips needed to help gaming-related developers efficiently run games to be developed on Ethereum.
While we do see the adoption of public blockchains like Ethereum and Tezos and many more, the majority of use cases have been tied to things like decentralised finance, gaming, and cryptocurrency trade- leveraging their trustless nature. Of course, decentralisation and absolute data immutability comes at a cost, meaning once a piece of transactional data is validated across the network, it is impossible to roll it back. The use case for public blockchains in the enterprise has therefore been limited to applications which either require openness such as gaming or asset tokenisation, or a use case where information is required to be exchanged without needing to trust any party.
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