where to use blockchain technology outside the financial sector?

The co-founder of Ethereum (ETH), Vitalik Buterinrecently spoke about the non-financial applications of blockchain technology 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 cryptographic account system is the question of changes to the private key.

He said a use case for blockchain may be in “changing and restoring user account keys”.

In the document “Decentralized company(DeSoc) co-author of Buterin, who explores the idea of ​​non-transferable tokens Soul Tokens (SBT), suggests the use of profiles “that can solve this problem” to preserve inaccessibility, social recovery (or “community recovery”).

A second use case for blockchain may be to “modify and revoke certificates”. Buterin says issuing the off-chain or on-chain digital registration using non-fungible tokens (NFTs) would make it difficult to change and revoke if the need arises.

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

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

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 or not limited quantity, 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 the data on the chain and who else can access it. This facilitates coordination between many parties.

Another potential use case discussed by Buterin 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 only supported by most tokens or even humans, but by most people. Truly distinct perspectives,” said Buterin .

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

“Blockchains as a data center for short text records may 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 retrieval, where data continues. to be recoverable if the application has two users or two million. “

This article appeared after Buterin earlier this year explored the idea of ​​”soul-bound 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 more pluralistic ecosystem within Ethereum, called a “Decentralized Society” (DeSoc).

Buterin said the tokens can be used to encode trusting social relationships. 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,” he said. declared Polynya, a pseudonymous Ethereum researcher, in early June.

Buterin also discussed SBT in the recent podcast Without bank :

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