Ethereum is a fantastic technology that tries to address several difficulties that have proven to be difficult to solve. But, the key is to understand where Ethereum excels and where it might not be the best option.
So, in this tutorial, we will illustrate some of the best Ethereum use cases. Additionally, we will cover the following list of topics
- Ethereum Use Cases
- Ethereum Use Cases in Financial Sector
- Ethereum Use Cases in Governance
- Ethereum Use Cases in Different Industries
- Using Ethereum for Identity Management
Ethereum Use Cases
When we think of Ethereum, the first thing that springs to mind is certainly cryptocurrency. Undoubtedly, Ethereum can help to accomplish this, but it can also help to accomplish much more.
For example, various personal and corporate encounters involve exchanging dollars, products, and services. Now, brokers are separate entities that handle these exchanges and provide a level of mutual trust.
However, Ethereum aims can solve a variety of issues with exchanges that entail some sort of transfer or exchange between untrustworthy parties. And it also eliminates the need for a broker or intermediary.
The above broker example exemplifies only one of the many ways Ethereum can assist with issue solving.
However, Ethereum, being a blockchain-based platform has certain key aspects that can address major issues with any sort of exchange. These key aspects are given below.
- Removes Middleman: It enables different parties to engage directly without the use of middlemen or brokers. Moreover, this one-on-one connection has the potential to dramatically improve efficiency and reduce transaction processing times.
- Low transaction cost: By eliminating additional processing steps and intermediaries, Ethereum can also help to reduce transaction costs. And instead of paying high broker fees, a user can pay a minor processing fee to the technology.
- Transparent: In the case of public Ethereum, all transactions are visible to anybody who has access to the network. Although we won’t be able to see the contents of each encrypted transaction, we will be able to see the address and the fact that one exists.
Ethereum Use Cases in Financial Sector
From the previous section, we understood how some basic features of Ethereum help improve transaction processing.
Now, in this section, we will start discussing different Ethereum use cases. And we will start with the use case in the financial sector.
1. Banking
Traditionally, conducting a transaction requires the use of banks or other financial institutions. For instance, we want to buy groceries at the supermarket. And that time, we can pay either with cash, cheque, or credit card.
Now, out of these 4 options, a bank is involved in 3 options. Whereas individuals can also exchange fiat currency. But, this procedure becomes more difficult as the number of players increases.
One of the most important services that banks provide is performing as a neutral, trustworthy third party in transaction brokerage.
In banking, Ethereum can help speed up transactions and simplify a variety of banking activities using the implementation of smart contracts. Moreover, it will aid in the accurate transmission of data and the fulfillment of all parties’ duties.
To streamline the process, Ethereum can be utilized not even in payments but also in national bonds, and insurance claims.
With the help of a smart contract, the funds will be transferred to the bearer’s account without the need for a third party. As a result, the procedure becomes more transparent and efficient.
2. Cryptocurrency
Cryptocurrency is a type of digital currency that is only maintained on a blockchain. Users can use their crypto accounts to access their funds and even send and receive cryptocurrency units.
Ethereum also supports cryptocurrency and also have its native currency, Ether (ETH). But, the platform also accepts a wide range of other tokens.
Just like a fiat currency, we may use Ethers to buy goods and services from any vendor who accepts them. Moreover, an Ether transaction does not work with a bank at all. And the transacting parties does not require to build any trust in each other.
This whole notion eliminates the need for processing intermediaries such as banks and various card companies.
Moreover, the crypto is sent in real-time, where we pay a modest transaction cost, which is significantly less than the fees charged by traditional processors.
Read Ethereum Wallets & How Ethereum Wallet Works?
3. Real estate
Real estate is another impressive market for Ethereum in the financial sector domain. Smart contracts on Ethereum play an important role in verifying all components of a transaction.
Moreover, steps that would ordinarily necessitate the assistance of an attorney can be automated.
Ethereum may help in a lot more than just real estate deals. For example, property maintenance frequently necessitates a large number of paperwork and records. It also assists in maintaining property history that could help in resolving insurance claims.
4. Initial Coin Offering
In the digital domain, Bitcoin was the first usable alternative currency. And over the period of time, it has grown in popularity and is now more than just a substitute for fiat money.
With the growing popularity of cryptocurrencies, many new businesses have sprung up that are totally financed by cryptocurrencies. And here comes the role of Initial Coin Offerings commonly known as ICOs.
An initial coin offering (ICO) enables various investors to acquire tokens particular to a project to fund such ventures. Although ICOs aren’t exclusive to Ethereum, they are a popular way for new Ethereum-based businesses to raise funds.
In Ethereum, ERC-20 is one popular Ethereum token standard that provides various coin functionalities.
Read What is Mining in Ethereum and How does Ethereum Mining Works
Ethereum Use Cases in Governance
Another potential area of beneficial Ethereum use cases could be governance. And multiple governing bodies need to be accountable and responsible to the general public.
And in such cases, various characteristics of Ethereum can assist in providing numerous benefits.
1. Voting
Voting is a traditional method of conveying one person’s preference or approval to another. And with the help of Ethereum, the whole voting process easier.
For example, it can help in identifying authorized voters with the help of the unique Ethereum addresses. With Ethereum, every vote will get recorded on the blockchain and becomes part of the voting records.
Moreover, the entire process of calculating election results would be substantially simplified. And the entire, irreversible record would decrease the possibility of fraud.
2. Tax Payment
Taxes play a crucial role for every government as it is a key source of funding. Every governmental activity relies on taxes, and every taxpayer is interested in them.
Governments and taxpayers can engage using blockchain technology like Ethereum to facilitate transparency and traceability needed to assess taxes equitably.
The use of Ethereum to manage tax payments could eliminate the need for precise records and receipts. With Ethereum, all the data can be stored and secured on a blockchain system.
Overall, Ethereum could help the process go more smoothly and also help auditing agencies might conduct more audits.
Read Ethereum Nodes and Clients
3. Policy Formulation
Identifying an issue, gathering community feedback, designing a policy to solve the problem. And finally putting the policies into action are all part of the policy formation.
For such processes, the Ethereum-based decentralized applications to govern public engagement can have several advantages.
For example, using decentralized technology to communicate with the public, providing complete process details to the public, and taking public feedback related to policies.
These all can help governance operations become more open and publicly available.
4. Verification
Typically, a notary is responsible to authenticate a signature on a document. Similarly, Ethereum certifies a document in such a way that the document is linked to the digital identity.
Moreover, anyone can validate the signature by comparing the decrypted hashes.
So, Ethereum can help in making the verification for notaries more efficient.
Ethereum Use Cases in Industry
Now various Ethereum use cases are general as well as useful in the coss-domains. Moreover, Ethereum applications can meet the needs of several vertical areas.
So, in this section, we will look at some of the industry-specific use cases of Ethereum.
1. Supply Chain
Regulating and managing the supply chain system is on the large scale Ethereum use case. Managing products & goods from the point of origin to the point of consumption is both costly and time-consuming.
Moreover, tracking of commodities makes it difficult for customers to learn anything about the products & goods they utilize.
Also, there are many products that do not properly include descriptive labeling that identifies the location and time of manufacture.
Now, there are numerous advantages to implementing supply chain management using Ethereum. And transparency is one of those advantages.
For example, producers, buyers, and anybody in between can track the journey of any product from the point of capture to the point of sale.
2. Healthcare
Healthcare is one of the most talked-about topics in the world where everyone wants to improve healthcare quality at a lower cost.
For this task, researchers use big data to test novel treatment strategies, improve the overall existing treatments.
However, this type of analysis is only viable if researchers have access to a large number of patient medical records. But, a patient’s electronic health record (EHR) is a fundamental issue in the healthcare system.
The maintenance of electronic health records is a good use case for Ethereum. Storing a patient’s EHR on the Ethereum blockchain eliminates the need to trust each institution that delivers or modifies the EHR.
Furthermore, this method also aids in the clarification of medical billing and payment.
Read Enterprise Ethereum Alliance
3. Energy Management
Energy management is another industry with promising Ethereum implications. Energy management is a must for smart city planners that want to use technology to improve the quality of life of their residents.
Ethereum apps make it simple to give each smart meter a unique identity and empower it to manage the energy it needs to run the devices in its house autonomously.
Also, Ethereum can help to maintain an up-to-date list of smart meters and how successfully each one regulates its energy use.
Read How to Setup Private Ethereum Blockchain on Windows
Using Ethereum for Identity Management
In the digital world, identity management is straightforward, but getting it right is always a challenge.
However, Ethereum offers a one-of-a-kind way to assist with identity management. On Ethereum, each user account has its address and key pair. These keys help the account’s owner to access all of the blockchain resources.
One of the resources connected with an individual is their distinctive identity and the address of the account is used to identify it.
1. Identify theft & fraud
Ethereum-based digital identity management solutions can significantly minimize fraud and identity theft. There are a few widely agreed identification standards in the real world.
The majority of people have a driver’s license, and many of them also have a passport. Unfortunately, there is no digital equivalent for these types of identification.
Ethereum can easily offer digital identification on demand, and it is far more secure due to blockchain. Moreover, to decrease data duplication, it will save data in an immutable block. As a result, using someone else’s identity is nearly difficult
2. Ethereum Identity Standard
ERC-725, an Ethereum identification standard, was proposed by Fabian Vogelsteller. Fabian Vogelsteller is the same person who created ERC-20 Ethereum token standard and Web3.js.
ERC-725 is an Ethereum smart contract interface for defining, configuring, and using identities. With ERC-725, instead of delegating control of identification to centralized institutions, users can govern their own identities.
So, ERC-725 allows handling digital identities on Ethereum, and hence it is adaptable to a variety of uses.
So, in this tutorial, we have covered some of the best Ethereum use cases. Additionally, we also discussed the following list of topics
- Ethereum Use Cases
- Ethereum Use Cases in Financial Sector
- Ethereum Use Cases in Governance
- Ethereum Use Cases in Different Industries
- Using Ethereum for Identity Management
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I am Bijay, a Microsoft MVP and founder of TSInfo Technologies, a SharePoint development company. Currently focusing on getting expertise on Ethereum, Solidity, Bitcoin, Cryptocurrency, Blockchain, etc. Sharing my expertise and tutorials on Bitcoin and Ethereum related technologies. Read More…