We do always see the blockchain technology and the cryptocurrency as one. But this is a misperception.
While one can life without the other, it is very hard to imagine that the other could life without the one.
I want to see, if you all believe in blockchains without a cryptocurrency! I do, but they will probably exist as a brother of the blockchains with a cryptocurrency.
I do not want to undermine the cryptos, but when investing and believing in something we sometimes need to think outside the box, to get an idea how strong our believe is.
Why do blockchains have a native currency?
Well there are several reasons for this.
- To keep the blockchain running
This is the so called mining. A blockchain is only blockchain is there are enough nodes available. Each node has a complete copy of the blockchain and do intensive tasks to keep the blockchain alive. In proof-of-work and proof-of- stake, there are rewarded for creating new blocks, and validating transaction. In the first case they will receive some fresh mined coins and in the second case they are rewarded with a transaction fee. - It is part of the business model
This one is really easy, people are apps have to pay the blockchain to make use of it. This could be done in the own cryptocurrency of in the cryptocurrency of the blockchain it is running on. Take for instance Zeepin, which is running on the NEO blockchain.
Another example is that the purpose of the blockchain is, so that people could money around. Person X could pay person Y via the blockchain. - To reward the creators of the blockchain
Most of the time, not all coins are handed out to the market. The founders of the blockchain will have a fait share of the coins, which they could sell. How more important the blockchain becomes, the more value these coins will have.
There are probably more reasons, but these ones spring to my mind!
A blockchain without cryptocurrency
A blockchain can easily exists without a native or other cryptocurrency. No doubt about it!
The only reason which has to be fulfilled is that all parties involved have enough benefits from the blockchain to be there. The benefit is big enough so that they don't need to be paid to run/host a masternode. Probably by using the blockchain for information means a steep decrease is operational costs, so that it is worth the effort!
These blockchain will mostly be connected to a particular industry or country based!
One can argue that a blockchain without cryptocurrency is just an enhanced decentralize database, but what's wrong with that. It is a major improvement then!
Let's take the people administration within a country as example.
At the moment it is just a centralized database to which some parties are having reading rights on. These parties do have access to it, but can not validate the data, this can only by done by the government. To be able to use this data, these companies probably copy huge chunks of data to their own databases. This costs time and money!
Now let's suppose that a blockchain solution comes into place. This will have the following benefits.
- the government has improved the security of the data. Suddenly if one want to hack the data, it has to hack enough masternodes of the blockchain to get consensus.
- the company using this blockchain will probably haven been granted access to the blockchain via smart contracts, also based on the smart contracts they will only have read access to the data and only access the person data were they are entitled to. They don't have to extract a fresh batch of data each time from the countries people administration anymore, cause it is at their premises in the blockchain. Via trigger they are automatically warned about a change in the life of the person, which is valid for their system (think about becoming registering a marriage or divorce, the birth of a child and so on).
You even could think of examples where a private blockchain is setup to which some parties gets access to via a smart contract. Even if these parties need to pay for accessing the blockchain, this could be done is regular fiat money without using the blockchain.
As long as all parties involved do have enough benefit of the blockchain, their is no use to be rewarded to keep the blockchain alive!
What do you think?
I can imagine that in the end their will be at least as many blockchain without a cryptocurrency then with a cryptocurrency.
What are you ideas about this topic. I would like to read them! Let’s discuss!
Keep the faith,
Peter