Most cryptocurrencies are designed to gradually decrease the production of that currency, placing a cap on the total amount of that currency that will ever be in circulation. Compared with ordinary currencies held by financial institutions or kept as cash on hand, cryptocurrencies can be more difficult for seizure by law enforcement. Each block typically contains a
hash pointer as a link to a previous block, By design, blockchains are inherently resistant to modification of the data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way". In the context of cryptocurrencies, the blockchain serves as a public ledger for all transactions. Cryptocurrencies use various
timestamping schemes to "prove the validity of transactions added to the blockchain ledger without the need for a trusted third party".
Smart contracts Blockchain-based
smart contracts are contracts that can be partially or fully executed or enforced without human interaction. One of the main objectives of a smart contract is
automated escrow. A key feature of smart contracts is that they do not need a trusted third party (such as a trustee) to act as an intermediary between contracting entities — the blockchain network executes the contract on its own. This may reduce friction between entities when transferring value and could subsequently open the door to a higher level of transaction automation. An
IMF staff discussion from 2018 reported that smart contracts based on blockchain technology might reduce
moral hazards and optimize the use of contracts in general, but "no viable smart contract systems have yet emerged." Due to the lack of widespread use, their legal status was unclear.
Financial services According to
Reason in 2016, many banks have expressed interest in implementing
distributed ledgers for use in
banking and are cooperating with companies creating private blockchains. According to a September 2016
IBM study, this implementation was occurring faster than expected. Blockchain technology has been proposed as a way to speed up
back office settlement systems. In 2017,
UBS opened a lab dedicated to researching how blockchain technology could be used in financial services. In 2017, the German bank
Berenberg described blockchain as an "overhyped technology" that has had a large number of "proofs of concept", but still has major challenges, and very few success stories. Blockchain technology has allowed for new forms of fundraising such as
initial coin offerings (ICOs) and security token offerings (STOs), also sometimes referred to as digital security offerings (DSOs). STO/DSOs may be conducted privately or on public, regulated stock exchange and are used to tokenize assets such as company shares, intellectual property, real estate, and others.
Games Blockchain technology, such as cryptocurrencies and
non-fungible tokens (NFTs), has been used in video games for
monetization. Many
live-service games offer in-game customization options, such as character skins or other in-game items, which the players can earn and trade with other players using in-game currency. Some games also allow for trading of virtual items using real-world currency, but this may be illegal in some countries where video games are seen as akin to gambling, and has led to
gray market issues such as
skin gambling, and thus publishers typically have shied away from allowing players to earn real-world funds from games. Blockchain games typically allow players to trade these in-game items for cryptocurrency, which can then be exchanged for money. The first known game to use blockchain technologies was
CryptoKitties, launched in November 2017, where the player would purchase NFTs with Ethereum cryptocurrency, each NFT consisting of a
virtual pet that the player could breed with others to create offspring with combined traits as new NFTs.
CryptoKitties also illustrated scalability problems for games on Ethereum when it created significant congestion on the Ethereum network in early 2018 with approximately 30% of all Ethereum transactions being for the game. By the early 2020s, there had not been a breakout success in video games using blockchain, as these games tend to focus on using blockchain for speculation instead of more traditional forms of gameplay, which offers limited appeal to most players. Such games also represent a high risk to investors as their revenues can be difficult to predict. Several major publishers, including
Ubisoft,
Electronic Arts, and
Take Two Interactive, have stated that blockchain and NFT-based games are under serious consideration for their companies in the future. In October 2021,
Valve Corporation banned blockchain games, including those using cryptocurrency and
NFTs, from being hosted on its
Steam digital storefront service, which is widely used for personal computer gaming, claiming that this was an extension of their policy banning games that offered in-game items with real-world value. Valve's prior history with
gambling, specifically
skin gambling, was speculated to be a factor in the decision to ban blockchain games. and
Epic Games, which runs the
Epic Games Store in competition to Steam, said that they would be open to accepted blockchain games in the wake of Valve's refusal.
Supply chain There have been several different efforts to employ blockchains in
supply chain management. •
Precious commodities mining — Blockchain technology has been used for tracking the origins of gemstones and other precious commodities. In 2016,
The Wall Street Journal reported that the blockchain technology company Everledger was partnering with
IBM's blockchain-based tracking service to trace the origin of diamonds to ensure that they were ethically mined. As of 2019, the
Diamond Trading Company (DTC) has been involved in building a diamond trading supply chain product called Tracer. •
Food supply — As of 2018,
Walmart and
IBM were running a trial to use a blockchain-backed system for
supply chain monitoring for lettuce and spinach all nodes of the blockchain were administered by Walmart and located on the IBM
cloud. •
Fashion industry — There is an opaque relationship between brands, distributors, and customers in the fashion industry, which prevents the sustainable and stable development of the fashion industry. Blockchain could make this information transparent, assisting sustainable development of the industry. •
Motor vehicles —
Mercedes-Benz and partner
Icertis developed a blockchain prototype used to facilitate consistent documentation of contracts along the supply chain so that the
ethical standards and contractual obligations required of its direct suppliers can be passed on to second tier suppliers and beyond. In another project, the company uses blockchain technology to track the emissions of climate-relevant gases and the amount of secondary material along the supply chain for its
battery cell manufacturers.
Domain names There are several different efforts to offer
domain name services via the blockchain. These domain names can be controlled by the use of a private key, which purports to allow for uncensorable websites. This would also bypass a registrar's ability to suppress domains used for fraud, abuse, or illegal content.
Namecoin is a cryptocurrency that supports the ".bit"
top-level domain (TLD). Namecoin was forked from bitcoin in 2011. The .bit TLD is not sanctioned by
ICANN, instead requiring an
alternative DNS root. Namecoin was dropped by
OpenNIC in 2019, due to malware and potential other legal issues. Other blockchain alternatives to ICANN include
The Handshake Network,
Other uses Blockchain technology can be used to create a permanent, public, transparent ledger system for compiling data on sales, tracking digital use and payments to content creators, such as wireless users or musicians. The Gartner 2019 CIO Survey reported 2% of higher education respondents had launched blockchain projects and another 18% were planning academic projects in the next 24 months. In 2017,
IBM partnered with
ASCAP and
PRS for Music to adopt blockchain technology in music distribution.
Imogen Heap's Mycelia service has also been proposed as a blockchain-based alternative "that gives artists more control over how their songs and associated data circulate among fans and other musicians." New distribution methods are available for the
insurance industry such as
peer-to-peer insurance,
parametric insurance and
microinsurance following the adoption of blockchain. The
sharing economy and
IoT are also set to benefit from blockchains because they involve many collaborating peers. The use of blockchain in libraries is being studied with a grant from the U.S. Institute of Museum and Library Services. Other blockchain designs include
Hyperledger, a collaborative effort from the
Linux Foundation to support blockchain-based distributed ledgers, with projects under this initiative including Hyperledger Burrow (by Monax) and Hyperledger Fabric (spearheaded by IBM). Another is Quorum, a permissioned private blockchain by
JPMorgan Chase with private storage, used for contract applications.
Oracle introduced a blockchain table feature in its
Oracle 21c database.
Lightweight blockchains, or simplified blockchains, are more suitable for
internet of things (IoT) applications than conventional blockchains. One experiment suggested that a lightweight blockchain-based network could accommodate up to 1.34 million authentication processes every second, which could be sufficient for resource-constrained IoT networks. Blockchain could be used in detecting counterfeits by associating unique identifiers to products, documents and shipments, and storing records associated with transactions that cannot be forged or altered. It is however argued that blockchain technology needs to be supplemented with technologies that provide a strong binding between physical objects and blockchain systems, as well as provisions for content creator verification
ala KYC standards. The
EUIPO established an Anti-Counterfeiting Blockathon Forum, with the objective of "defining, piloting and implementing" an anti-counterfeiting infrastructure at the European level. The Dutch Standardisation organisation NEN uses blockchain together with
QR Codes to authenticate certificates. Beijing and Shanghai are among the cities designated by China to trial blockchain applications as January 30, 2022. In Chinese legal proceedings, blockchain technology was first accepted as a method for authenticating internet evidence by the
Hangzhou Internet Court in 2019 and has since been accepted by other Chinese courts. ==Blockchain interoperability==