August 13, 2022

Blockchain: One of the legitimate criticisms is that there’s a centralized answer for all the things already, so why do we’d like blockchain options? Kurt Ivy explains why blockchain tech will all the time be superior.

Many clever, well-intentioned people settle for the truth that crypto and blockchain work as meant – however there’s only one downside:

For each blockchain answer, isn’t there a centralized answer that does it higher? This appears to be the basic query. Tear away all the hype, beliefs, and particulars, and also you’re left with this. Do we actually want it?

I’ve to confess, this stumped me throughout a number of conversations. However that’s solely as a result of I wasn’t ready to present the apparent reply now we have defined 1000’s of instances in a thousand alternative ways. 

TL;DR: The blockchain solves the issue of digital possession.

Plain and easy. Right here’s a little bit extra: the blockchain addresses the difficulty of centralized management. Who has custody over data/the circulation of data? Do they deal with the accountability appropriately? Do they make a large revenue just because they’re in command of one thing uncomplicated that anybody else may do exactly as simply? 

With blockchain know-how, NOBODY controls data. Entry to data turns into a public utility, and entry to data defines how the web works on a elementary degree. It’s all the things. 

Let’s make this clear:

The web and the programs constructed inside it have change into what roads, powerlines, and plumbing are in actual life. 

Fee options, banking, and commerce  – these are PUBLIC UTILITIES. They’re a necessity, not a luxurious. 

So that you see… It doesn’t matter if centralized entities are extra environment friendly options in sure facets. That’s as a result of these centralized entities are abusing their place and milking the programs that society requires to perform correctly. If we may belief people to do what’s finest for the nation once they have completely zero incentive and accountability to take action, then corporations like Amazon and Uber can be nice. Clearly, our belief was misplaced, and we’re buying and selling a number of comforts for wealth and autonomy. That is proving to be disastrous to the way forward for our society.

These centralized options aren’t simpler. They seem to supply one thing nice on the floor. Beneath the floor, they’re slowly sucking nations dry. 

NFTs

Let’s dig into some particulars. The NFT web page on the Ethereum web site has a extremely nice, easy infographic to clarify the advantages of NFTs:

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The second level right here is one other fast abstract of my rationalization. Possession of digital information  –  accounts, memberships, inventories  –  are saved on servers managed by establishments. We have now to belief them with this data. For instance, Amazon has huge management over e-commerce just because they maintain custody of the digital objects   – inventories   – and management how they’re displayed. They take a minimize of the earnings on either side of a transaction to reward themselves handsomely for being the intermediary. 

Shiv Sakhuja posted an awesome article in regards to the utility of NFTs. I need to deal with a few of his factors by means of the lens of centralized vs decentralized custody of data. 

However First, E-Commerce

This isn’t certainly one of his examples, however the position of blockchain know-how in retail and e-commerce can’t be overstated. First, let’s look at probably the most fundamental constructing blocks of e-commerce:

  • Vendor uploads information to web site
  • Purchaser views information

Now, who’s going to carry and handle all of that information? If we permit a central establishment to handle the information, they’ll actually abuse their place of energy and put a pressure on e-commerce actions.

As a substitute, we are able to use the blockchain to facilitate information storage and financial transactions. Nobody owns the blockchain, and but it’s cost-effective and safe. An e-commerce platform constructed on the blockchain would offer any utilities {that a} centralized establishment may present, however there can be no charges and no censorship. No stealing of merchandise. 

eNFTs — A Answer With a Recognized Downside

So that you see, all we’d like is somebody, or one thing, to entrust our information to. The blockchain presents this answer. As a substitute of importing product information to an internet site, it may be uploaded as an NFT, or a SHOPX e-commerce NFT (eNFT) to be actual. With this, centralized entities will not management product information, and, in consequence, won’t management e-commerce.

The blockchain doesn’t ask for earnings. It doesn’t ask for charges (apart from small alms to maintain the system on-line). Functions constructed on the blockchain are accessible to anybody at any time. That is the inspiration of a real free market. A digital area the place folks can purchase and promote, similar to they’d in actual life, with no third-party meddling of their enterprise and taking a minimize.

One other nice utility that eNFTs carry to e-commerce that centralized options can’t (or won’t) is interoperability. At the moment, every e-commerce platform has its personal infrastructure to keep up and distribute retail information. This information is just not transferable from one platform to a different. To switch stock, each bit of data should be re-entered, little by little. 

eNFTs provide an answer to this downside. As soon as the product information is uploaded as an eNFT, it may be used on any appropriate e-commerce platform. Information entry turns into a one-time occasion. This additionally standardizes information throughout all platforms.

Tickets, Music, and Video Video games

These are the low-hanging fruits of what NFT know-how has entry to. To handle all three within the context of digital possession, it’s clear what the issue is: centralized establishments act as middlemen for all three. 

What are the core ideas right here? Tickets are one thing that venues promote to contributors. Music is one thing that artists promote to followers. Video games are one thing that creators promote to players (this one is a bit more difficult, hold tight). If we may minimize out the intermediary on all three (ticket distributors, labels, and studios), then we may focus the earnings and a focus on what actually issues. The content material.

Blockchain: One of the most valid criticisms is that there is a centralized solution for everything already, so why do we need blockchain solutions?

Blockchain and Tickets

Ticketing isn’t a very run business, however there are nonetheless huge earnings to be made by standing in the way in which of artists/venues and followers. There are different advantages of utilizing NFTs that centralized entities can’t present. Secondary market management is a giant perk right here. You might assume that that is in reality a foul factor. Why would we wish elevated management as an alternative of extra freedom? Effectively, ticketing is a really particular case. 

Regarding the secondary market, neither venues nor consumers need overpriced tickets, faux tickets, transferring tickets with out cost/cost with out getting the ticket, or overly difficult transfers. NFT tickets may be transferred safely and securely with out worrying if the opposite aspect pays or if they’re providing you with a faux ticket. And the worth may be locked in, unable to extend.

Blockchain and Music

There are countless issues with labels having full management over artists. Artists change into the instruments of the label slightly than a software the artist makes use of to distribute their music. This degrades the standard of the music as properly. Not too long ago there was a narrative about an artist whose label wouldn’t produce her music except she created a viral Tik Tok video. The identical artist’s abilities have been used to assist a unique artist produce higher high quality songs. 

What occurs is a money-making machine is created. This machine has one objective: to pump out money-making songs. The artists and the artwork change into secondary to the gross sales. Music NFTs like Yellowheart put management of the rights to the music within the palms of the artist. If and when music NFTs take off, artists will not have to depend on labels to safeguard and distribute their data. The data storage system – the NFT  –  isn’t owned by any particular person or establishment. So long as the artist is ready to promote themselves, they’ll be capable of preserve all of their earnings. 

Blockchain and Video Video games

Studios technically aren’t the middlemen between the creators and the players. Studios are the creators. However in recent times, studios have change into profit-seeking entities, and the creators throughout the studios change into their instruments. When smartphones made apps extremely accessible and iPhone video games took off, many studios turned their consideration to pay-to-play video games with microtransactions as a result of that’s what’s the most worthwhile mannequin proper now. Small, low cost video games that will usually price a greenback can slowly rack up tens or typically tons of of {dollars}.

This, mixed with different in-game purchases like skins and objects, are pure revenue for studios. Some studios launch free video games, which rely upon in-game purchases from these prepared to spend the cash. Why not give these gamers possession of their purchases and the flexibility to resell them? This may incentivize the creation of high-quality collectibles as an alternative of low cost boosts that may’t be resold. The studio will make a revenue from royalties on resales, and the gamers will make a revenue for his or her exhausting work.

Blockchain: One of the most valid criticisms is that there is a centralized solution for everything already, so why do we need blockchain solutions?

No, The Blockchain Isn’t a Answer Trying For a Downside

To summarize, the blockchain is the one know-how that may securely and successfully retailer proof of digital possession. The flexibility to put declare over digital data was unattainable earlier than except you owned the infrastructure that saved the knowledge. The blockchain supplies an infrastructure to retailer data that nobody owns and anybody can entry. This utility is totally essential for society and can have an unlimited, rippling impact on many various industries, and in consequence, our total society. 

In regards to the writer

Kurt Ivy is a content material author for SHOPX and Gamerse, advertising advisor for Altar, head of content material at Crypto PR Labs, and CEO of Espresso Nova. Ivy is a thinker, futurist, author, and entrepreneur.

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