Decentralized Trust – E24

Web 3. Cryptography is called a bustling bubble with no real uses. The arguments come from a privileged position, if you ask me.

What can encryption actually use?

In this column, we discuss some of the practical applications of the technology that more and more established companies are using and investing in.

When you think of encryption, the first word that strikes you should be: decentralization.

Don’t be alarmed.

Decentralization may sound like squashing power. In fact, decentralization is related to methodology and democratization.

Within the crypto world, decentralization refers to the transfer of control from a central entity (an individual, organization, or group) to a more distributed network.

What will facilitate this decentralized trust?

Blockchain technology.

At its core, blockchain technology is a decentralized trust infrastructure. When decentralizing systems, it should be done in a secure and transparent manner.

Money is an example. With decentralized finance, the ability to send and receive payments becomes decentralized.

But why is decentralization necessary?

Try sending an international bank transfer on Sunday and you will quickly realize how difficult traditional money payments can be.

Transfer fees for international transactions also seem redundant – in the blockchain, one transaction equals another, regardless of geographical location. Thus, the transfer fee does not increase based on the beneficiary country.

Transferring money from migrants living in rich countries to their relatives in poor countries makes more money than aid.

According to the report, about one in three non-Western immigrants in Norway regularly send money to his family in the country of origin. SSB. In 2016, this amount was about 4,700 billion NOK worldwide.

Alternatively, fees charged for these transfers can be used for education and health. In the Sustainable Development Goals, the United Nations has focused on reducing global remittance fees for this reason.

Another area of ​​application is the loan market.

Cryptocurrency lending markets are global and equally accessible to anyone with an internet connection. Conventional financing doesn’t give everyone equal access, but it does make room for “extraordinarily large loans” to be approved through the way Ellar Lee got it in 2021.

Speaking of equal access: Not everyone in the world has access to stocks, derivatives, insurance, and index funds. Buying Amazon shares in India is much more difficult than buying Amazon shares in the US.

But blockchain technology is based on the Internet. It does not discriminate and everyone has equal opportunities.

MasterCard CEO, Michael Maybach, subscriber This week, they made it possible for people to use cryptocurrency for their daily purchases. They will allow people to use the payment method at all stores that accept MasterCard.

The company is launching this business in Argentina and will expand from there. This makes it easy to actually use your own cipher – something that will become more common in the future.

Currency exchange is also a valuable application that is unlocked through cryptography.

It is not easy to access foreign currency in many parts of the world, preferably where it is needed most.

In countries with high inflation such as Venezuela and Iran, black currency exchanges exist because the authorities for political reasons do not offer the same valuations of the US dollar.

Enough about the money. Decentralized trust opens many doors.

For example, decentralization of management or control. Or to ensure confidence in the logistics chains of large companies through transparent verification.

One of the most exciting coding applications is NFT-he is. This is precisely because it is key to many areas of use.

The NFT cannot be forged like a driver’s license. NFT makes it possible to have a reliable digital identity. Or more likely, multiple trusted digital identities.

This can include things like membership in organizations, but also provides increased confidence in important processes such as voting.

Many forms of documents that can easily be forged today can be replaced by NFTs, such as medical records.

These NFTs are likely to be non-transferable or “Soulbound” tokens, SBTs. Soulbound tokens are NFTs that cannot be resold in the secondary market.

This applies to ID cards, diplomas, university degrees, legal documents and invoices. Any proof or certificate can be secured with NFT.

In countries where there is a lot of corruption, this can be of added value.

Tradable NFTs can also be used for things like concert tickets that should be easily verifiable, hard to counterfeit, and have a secondary market for trading.

With NFT, it is primarily about proving that you own something. It can be art, collectibles, or intellectual property. And one day also material possessions.

A final word of warning: as of today, Ponzi/pyramid schemes are one of the most popular uses of cryptography. So be careful.