Everyone knows that Bitcoin is powered by the blockchain. Without that technology, it would be impossible for a digital currency to work. There's no better way to prevent fraud than by spreading a record of the transactions across thousands of servers and making sure that each ledger remains up to date.

And everyone knows that companies are using the blockchain to launch ICOs to raise funds.

But it's possible that neither of those ventures turns out to be the best example of blockchain usage.

At the moment, thousands of companies are exploring other ways to make use of the blockchain. Some of those uses might just turn out to be more powerful than even a digital currency used around the world.

The sharing economy, for example, sees the blockchain as an easy way to keep track of the goods its customers are sharing. Lazooz uses a token to enable ride-sharing. Chasyr sees itself as competing with Uber. Origin Protocol offers an entire blockchain-based platform to allow anyone to create their own property-sharing business.

Users of those services might not even know that the blockchain is powering their activities. They'd just be able to borrow someone's car easily or rent out their power tools, and always know who had it last. The mechanics that safeguard their property would be invisible.

You can compare it to the way that banking works now. Pass a credit card in a store and you don't see all the communications that take place between the credit card company, the store's bank, and your bank. Within seconds the transaction is confirmed and you're leaving with your purchase.

It's that simplicity at the point of user that banks themselves are now experimenting with themselves. While Bitcoin has stolen much of the blockchain's glory, companies as large as IBM are testing versions of the blockchain that can help banks issue loans and settle trades. The use of digital tokens tied to fiat currencies, for example, should help to speed up international transfers.

These aren't blockchains like the one used to support Bitcoin or ICOs. Banks will control the ledgers, so they won't be decentralized. If the token is pegged to a fiat currency, like Tether, their value will always be at the mercy of central banks.

But the result should be improved front-end services for customers, and faster and more reliable back-end services for institutions.

The blockchain is usually described as a distributed ledger but it's not even that. A ledger is something that you can see and leaf through. The ledger that makes up a blockchain is a series of numbers and letters stored as bits on a server. No one has ever seen that ledger though they can pull up parts of it to follow a transaction.

As Bitcoin bounces around and tries to find a value and ICO-based companies fall away after launch, there's a risk that the blockchain could be stained with Bitcoin's current unreliability and some companies' weaknesses. But while speculators lose their shirts, plenty of businesses are continuing to experiment quietly with the blockchain and churn out valuable new uses. We might not always see the blockchain but we will feel it.

Published on: Dec 12, 2018
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