Put simply, the most promising use case of blockchain is the simplification of underlying mechanisms of our society - commonly k
31 Dec 2022, 22:11
Put simply, the most promising use case of blockchain is the simplification of underlying mechanisms of our society - commonly knows as tokenisation.
In other words, processes which currently require many steps - and the intervention of various entities - to reach an acceptable and trustable results could be accomplished in just a few steps by using a public blockchain.
A practical example of tokenisation would be the simplification of the emission, transmission and holding of physical securities, such as company shares.
At the moment, if a listed company wants to emit shares, they must undergo a very complex process, including the dematerialisation of the physical share certificates, so as to convert the certificates into an electronic form that can be held in online accounts that investors hold with depositories (banks etc). Many entities (Clearstream etc) are involved into that complex process, which must be deemed trustable, tamper-proof, and must comply with global standards & regulations.
When X in Japan holds shares of an American company and sells those shares to Y in Europe through his bank, the hidden machinery to make that transaction happens is just huge.
Now imagine that the same listed company mint their new shares into NTFs. The NFT would just need to transact on a trusted public blockchain such as MultiVAC, from their treasury digital wallet to the buyer’s digital wallet - optionally through an exchange.
Simplicity, trustability, traceability, verifiability, borderless… The list of advantages of tokenisation is impressively long, with almost no drawback.
Similar simplification principles can apply to many industries and government services - such as land department.
That’s why considering that crypto is about to replace fiat currencies is a lack of understanding of the technology. Money is only a very narrow use case of blockchain, and it is very unlikely governments will let any private currency replace their own. The printing of money is paramount for governments to control their economy.
Conversely, it is a given that governments will soon issue Central Bank Digital Currencies (CBDCs), a type of money that will use blockchain technology with a centralised ledger, controlled by central banks.
I hope this helps 😉
Happy New Year to the whole MultiVAC community! 🥳🥂🍾