The Making of Blockchain’s Killer App

We were all promised a bitcoin revolution. That said many of us have wondered when this will actually take place. After all, a quick look at the blockchain press will show us that we are still in the making of blockchain’s killer app. Over the last couple of years, Bitcoin has experienced quite the volatility resulting in some of the lowest lows. We can expect this will likely continue after the recent halvening. This means crypto might just need one “killer app” to keep it in the green. 

There are a couple of contenders for blockchain’s killer app. Let’s start with the basics, which apps have the crypto community already claimed as the killer app. Some argue that it is a very specific use case for blockchain that will set it apart, others suggest it might even be the beloved bitcoin which offers us something as simple as a digital currency. Perhaps, we’ll leave it for you to make the decision.

Killer App Defined

For those who haven’t heard the term killer app before, this is likely the best place to start. A killer app is an application of new technology that is superior to all other rivals that currently exist in the market. The app in question must drive mainstream adoption. This drive for adoption must be so great that people are willing to learn new skills just to use it. New users see the value of this application and want to participate. Especially to avoid appearing as a straggler on the adoption curve. Some examples of killer apps throughout history might include Facebook which sparked the social networks frenzy to interact with people who don’t live close to you or Instagram for sharing photos at scale.  

This means when we say that blockchain needs a killer app, we are searching for the be-all and end-all for blockchain apps that solve real-world problems plaguing the industry today. This application would further prove to make blockchain indispensable to consumers.

Killer Apps for Blockchain 

Many consider blockchain as a technology that is in search of a need and in search of greater adoption. However, we also believe that blockchain is just on the cusp of making it mainstream. So as soon as we determine what exactly that killer app is, blockchain will integrate itself into our lives. 

This is easier said than done. After all, blockchain has many use cases. So which application of it will take it from a cool trend to a must-have technology? This is still up for debate. That’s why we put together some of the applications that are currently in the making of blockchain’s killer app.

Income Share Agreements

After referring to one podcast, it became evident that income share agreements might just be one of the biggest break out use cases for the blockchain industry. Especially with its potential to solve student debt. It is currently no secret that the relationship between students and investors lacks credibility and can be expensive. Before we get ahead of ourselves let’s break it down a little bit. You might hear this same solution referred to as a tokenized income share agreement (ISA) especially as the buzz continues to increase. 

This would essentially eliminate debt by allowing you to securitize part of your future income stream by exchanging it for cash upfront. Instead of providing all of this classified information to the bank while agreeing to their set payments, you would slowly pay down your debt by allowing a certain percentage of your income to go towards your previous loan. Let’s go back to the example of the student paying off their loans. Once a student gets a job post-graduation, a portion of their income will automatically be returned to the investor. If their wage changes, the percentage would be adjusted accordingly.

This isn’t where it stops. By trading in value for tokens, there is believed to also be a drive to a more efficient market. This is because tokens could lower the default rates through autonomous reinforcement of policies. With these new financial products, items would now be priced close to perfection.

While we can’t say this would work for certain, new celebrity ISA’s in the NBA are believed to give this concept the jumpstart it needs to become mainstream.

image of warehouse as example of supply chain as blockchain's killer app

Supply Chain Management

The supply chain is a complicated network that is confusing no matter the size. This means for all enterprises it can be hard to manage suppliers, manufacturers, distributors, retailers, and of course their customers. So what if we told you many businesses that we already know and love including Walmart, IBM, and Maersk already use blockchain in their supply chain. This is because using blockchain to track their supply chain gives them instant access to the information in it down to the most intricate details. It also greatly improves the inefficiencies we see today and provides more visibility for the end-user.

For example, fresh produce could be tracked all the way through and we could better detect the freshness and reduce spoilage of certain products. These savings could further be passed on to the retailer. Additionally, in the event of an outbreak, all affected food items could be tracked immediately empowering the user and keeping people from getting sick. Now, it might take us a little bit longer to determine exactly what food has been impacted. This will also help consumers to build trust with certain brands as they can see exactly where their food has come from before hitting their tables.

The last point about consumer knowledge is just another trend that blockchain can capitalize on. After all, the majority of millennial consumers have since decided that they would rather pay more to purchase from a company that shares their same values including environmental stewardship. It is hard to say whether businesses are walking the walk. But, with blockchain this might have just gotten a little bit easier.

Immunity Passports

The CEO of Overstock, Jonathan Johnson claims that the killer app might actually be immunity passports. This term might be fresh in our minds as we emerge from the Covid-19 pandemic. As a quick refresh, this is a document that contains the health information of an individual. It even includes the individual’s immunity to certain diseases. This might sound like a new concept for blockchain. However, if we remember correctly there are several blockchain-based apps already in play that consumers can use to control their health records.

While this might still have some hurdles to make it mainstream, the concept itself might require a buy-in from the government. Currently, users trust the government with this sort of sensitive information and may be apprehensive to release this data on an app they don’t understand and don’t trust. 

That said, we don’t believe that we will come out of this pandemic completely unscathed. This means it is likely that in some countries we might require an immunity passport to enter or to participate in certain events. If this continues to be the case, it is likely that users will be quick to use this technology to get used to the old ways of doing things pre-COVID. This may even increase their appreciation for blockchain because of it. 

We know this concept is a little bit different than its payment abilities we have come to know and love. But who knows? Perhaps it is the medical industry that will really make the industry thrive.

Undercollateralized Loans on DeFi

Another area that is potentially game-changing to the blockchain is under-collateralized loans on DeFi. This might sound a little complicated so let’s backtrack just a little bit. Over-collateralized loans or secured loans are seen in businesses that back a loan with assets that amount to greater than the amount of the loan. Since you already need assets to back your loan, this limits who can take out a loan. This presents a problem. Consider that in order for businesses and the resulting industry to grow they will require unsecured debt at some points in their operations. Especially new start ups and students who are looking to expand their skill set.

One example of this is the zero collateral protocol which is an unsecured/under-collateralized lending market in the Ethereum blockchain. In this protocol borrowers must only maintain the collateral equivalent to that of the loan. Since loans are repaid frequently, the collateral required is driven down to (almost) zero. 

To determine who was eligible for loans, lenders would typically consider the age of the address, the ratio of amounts transferred to the address when compared to the amount transferred away from it as well as the number of addresses that transfer to a given address. These factors all show the history of the borrower. This creates a cryptocurrency credit score for the borrower without revealing personal details about the individual themselves.

The lender is also secured in that if the loan is never paid back, the wallet can be liquidated. However, using DeFi selected borrowers are also believed to be more likely to pay back a loan.

blockchain's killer app may be defi, this image demonstrates pros and cons

User Experience

Some of us believe that the crypto killer app is user experience. Let’s face it new users of blockchain might have a hard time finding out what blockchain even is. After all, some of the information is very complicated if not explained in layman’s terms. Not to mention there is a lot of hacking, the network can be slow, and not many people accept cryptocurrency as payment.

Additionally, people have a hard time understanding the concept of buying a whole bitcoin or a fraction of a bitcoin. After all, the investment in Bitcoin is viewed as stock and you buy a whole stock.

We’ll admit user experience is a hard killer app to go after. This is because user experience and a mobile-centric approach has been brought up to such a high standard in the fintech industry. Mobile banking and other consumer products think user-centered design first and the underlying technology second. This means that in order to compete in this industry, blockchain must do the same.

NFT Based Games

Next on the list is a non-fungible token (NFT) based game. Something that is non-fungible is simply a good or commodity that is not interchangeable. This would take digital gaming to the next level. It would also allow for online experiences to result in equally cool digital assets that are completely unique and could essentially become collector’s items. These collector’s items could in turn stimulate the economy by creating new forms of economic activity.

This is easier said than done. After all, the cool thing about things we do online is their replicability. This means crypto tech must find ways to enforce the uniqueness of these digital assets. The concept itself still needs some work. After all, why would people decide that digital assets suddenly mean more than the physical assets they have grown accustomed to having value?

Payments On The Black Market

The last area we wanted to consider might sound a little more ominous. That said, it is important to consider that cryptocurrencies like Bitcoin specialize in maintaining anonymity. This suggests users of the dark web or other black markets will be offered some sort of protection. For those less familiar with these terms, the dark web refers to a section of the Internet that can only be accessed by anonymous protocols. This is because its contents should be hidden from the eyes of most. 

These underground communities are often the source of a variety of illegal materials. That said this market accounts for billions of dollars of transactions every year. This makes it an interesting opportunity for blockchain.

Blockchain Is A Killer App

While technology typically requires a killer app to make it mainstream, we might not actually need a killer app. Blockchain itself might be the killer app. Bitcoin is trying to do something that other cryptocurrencies aren’t trying to do. But it is bigger than the currency itself. As the industry matures we will see we may be moving to a world where blockchain can solve many problems simultaneously. Perhaps they aren’t converging to a single thing at all.

Blockchain is too big to achieve one goal. 

Ethereum cofounder, Vitalik Buterin suggests that,

“There will be no “killer app” for blockchain technology. The reason for this is simple: the doctrine of low hanging fruit. If there existed some particular application for which blockchain technology is massively superior to anything else … then people would be loudly talking about it already … And so far, there has been no single application that anyone has seriously stood out to dominate everything else on the horizon.” 

To Be a Killer App or Not To Be

After evaluating these potential options you might come to a few different conclusions. First, you might agree with one of the use cases mentioned as making the most sense for a killer app for blockchain. Alternatively, you might agree with Vitalik. If this is the case, you probably believe blockchain is far too powerful to be summed up in one killer app. Regardless of your opinion, it is apparent that we are still in the process of discovering what blockchain’s killer app really is. 

What can we say? It would seem the hunt is still on.

Alright, we can admit blockchain has so many implications it can be difficult to know where to begin. For some guidance, joining our community on HedgeTrade is a great place to start. Don’t wait! The time to make predictions is now.