2023 was a challenging year for the cryptocurrency industry. Skeptics quickly pointed out that there are no real-world applications for the nascent industry other than facilitating crime or fraud. However, the rapid technological progress in blockchain technology often gets overlooked. By marrying decentralized networks with assets like money, cryptocurrencies enable unique solutions to otherwise intractable problems. Here are five cryptocurrency use cases I anticipate gaining traction in 2024.
1. Digital Identity: Ensuring Online Privacy and Personalized Experience
Problem: Users often lose control over their personal information when it is aggregated into a single database, creating a “honeypot” for hackers.
Solution: Blockchains can enable a new form of digital identity document for the web. For example, zPass allows users to upload encrypted versions of their credentials (like a passport) to the blockchain. This allows users to authenticate for services without divulging a lot of personal information.
2. Efficient Global Payments: Reducing Costs and Increasing Speed
Problem: Traditional payment systems are slow, costly and inaccessible to many.
Solution: Stablecoins backed by real-world currencies provide an efficient alternative for global transactions. They are fast, cheap and accessible worldwide. In 2023, stablecoins accounted for $4.5 trillion of crypto transaction volume on blockchain networks. Even digital payments giant PayPal announced the launch of its own stablecoin earlier this year.
3. Decentralized Trust for the Internet: A New Approach to Security
Problem: Current internet security relies heavily on centralized models, which are prone to attacks and transparency issues.
Solution: Applying blockchain to internet security creates a more robust system that doesn’t rely exclusively on centralized PKI. This reduces potential vulnerabilities and increases transparency, allowing a “web of trust” to be built.
4. Transparent Humanitarian Aid: Ensuring Effective Delivery
Problem: Traditional humanitarian aid often suffers from inefficiency, lack of transparency and corruption, undermining its effectiveness.
Solution: Blockchain offers a transparent, traceable and secure system for humanitarian aid. This ensures that donations are used effectively and reach their intended recipients, as in a recent UN pilot to provide aid directly to families affected by the war between Russia and Ukraine.
5. Empowering Digital Economies: Fairness for Creators
Problem: In digital economies, the centralization of control and profits often limits opportunities and rewards for creators and small cooperatives.
Solution: Blockchain technology enables more democratic digital economies through NFT marketplaces and DAOs. This allows creators and artists to take advantage of online marketplaces and earn fair compensation for their contributions.
Despite its immense potential, blockchain technology is still in its early stages. Challenges such as scalability, user privacy and user interface complexity are preventing this technology from going mainstream. However, progress is being made on these fronts, and the transformative potential of blockchain technology is being realized through the use cases mentioned above. 2024 will certainly bring further challenges to the cryptocurrency industry, but it will also bring forward necessary progress towards making this technology relevant and useful.
