What are the important areas of blockchain project mapping? It seems that blockchain technology is the rage right now and its influence and use is not confined simply to cryptocurrencies or token sales.
In fact, blockchain technology has made its emphatic presence felt across several different sectors of businesses today.
It is used across several industries and segments and therefore has created a prospective blockchain project ecosystem.
It is considered to be one of the fastest ones in the area of technology by and large to take off when it comes to new projects or company formation.
It was not very long ago that most of the companies, especially the Venture Capitals, were primarily focused on the centralized exchanges and enterprises.
And, when it came to private blockchain solutions, there were several popular blockchain startups, especially wallets that dominated the market.
That was from 2012 to sometime around 2016.
Things changed dramatically after that and now you will find a lot of other areas of businesses that utilize the blockchain technology, including creating digital maps.
With all such features and benefits of blockchain technology, it is not surprising that you see a lot of excitement surrounding it and a lot of exciting projects coming to the market.
In fact, given the rapid pace at which these new blockchain projects are coming up, it is quite difficult for any average person to keep a track of each of these projects and to determine where in the ecosystem each of them fits into.
If you are unaware of those areas, here in this article you will find them all categorized and explained briefly for you.
Contents
What are the Important Areas of Blockchain Project Mapping?
Over the years, there has been a significant rise in the blockchain technology and its use especially after the upgrading of the Ethereum blockchain with the new Turing-complete scripting language.
Developers have been inclined to use this innovative technology in different areas of the industry, finding it much easier and safer to add new blocks to the chain with some info and a statement in it.
This has opened a new avenue in smart contract development.
All these developments surrounding blockchain technology has resulted in a huge influx of developers focused more on creating decentralized projects since it has enabled them to make the best out of the incredibly valuable properties and huge potential of the blockchain technology.
The developers have found a new way to reach out and distribute information to share it among a lot of other people who either agree on it or reject it.
This information is added to the chain as a new block when agreed upon by all the participants and discarded if it is rejected at any one of the nodes.
However, the entire process does not need any involvement of an intermediary or a centralized authority.
Of late, there have been a lot of new blockchain projects that have hit the market.
These projects cover different areas and also help in improving the functionality of the existing blockchain.
At the same time it also provides a much better experience to the consumers.
Now, while blockchain project mapping, you will come across several financial as well as non-financial areas that use this innovative technology and therefore can be considered to be a part of this exciting ecosystem.
Right from the fintech industry to shared data, you will find the influence of blockchain technology in different areas.
It helps in maintaining authenticity, sovereignty, value exchange and more.
Here are some of the decentralized projects based on blockchain that you will find in the ecosystem while mapping.
The value of each project along with the main purpose of each are also included to make it easier for you should you need to categorize them.
Now, remember, this list is not an exhaustive one. There are surely a lot of others doing rounds in the market and are doing well at it as well.
Some of these blockchain based projects may even fit into various categories.
The most difficult ones to categorize are however the ones that come with ‘fat protocols’ because they can function effectively in more than one area of this ecosystem.
Currencies
The main idea of creating these blockchain projects for the most part was to build a better and more effective currency that will have several use cases.
It was intended to be much more than just a simple unit of account but also a medium of exchange with a greater store of value.
In this particular area of the blockchain ecosystem, Bitcoin was the first project that was also the most prominent one.
There were a lot of other different projects developed and set out after it being inspired by the protocol of Bitcoin with only some improvements made in a few aspects of it.
Ideally, these new projects were tailored to have a definite use case.
In the category of currencies, there is a Privacy subcategory.
This specific type of currencies may fall into the Base Layer Protocols or Payments Protocols categories.
These Privacy coins are very important because they allow making anonymous and untraceable transactions.
It is especially useful for those individual crypto users who want to hide their transactions because they do not want to broadcast them for one reason or another.
It is also useful for those enterprises that do not want to reveal their trade secrets.
Developer Tools
This specific category of blockchain project, just as the name suggests, are mainly used by the developers.
They use it as the building blocks while creating decentralized apps.
However, the design of most of these projects that are not the financial ones needs to be proven out at scale in order to allow the users to interact directly with the protocols by using the interfaces of the apps.
Such developments in the design of the protocols will influence its interoperability and scaling that are the active areas and play an important role when it comes to the Web3 development stack.
However, in spite of that, when it comes to the investment as well as the intellectual curiosity standpoint, this is perhaps one of the most interesting categories as of now.
This is because several of these projects are aimed to grow and mature to come to fruition.
Developments are being made to allow the users to have more control over data as well as to make the infrastructure more scalable and foundational.
However, these projects still have a lot to do in order to fall into the ‘winner take all’ category in terms of store of value much like the cryptocurrencies.
In order to build and function properly in a decentralized data marketplace a lot of subcategories in the Developer Tools are required such as:
- Ethereum – for smart contracts
- ZeppelinOS – for security
- Mattereum – for execution of legal contracts to ensure protection if there is any dispute
- Truebit – for faster computation and
- NuCypher – for proxy re-encryption.
All these are not centralized data silos but are just protocols and for that reason these can interact with one another.
This offers interoperability which results in new use cases due to distribution of functionality and data in a single app from several protocols.
Fintech
This happens to be a much simpler category. When you typically need to interact with a number of different apps and protocols, there may be many of these that may have their own native cryptocurrency.
Therefore, there are a lot of new economies that surface.
When one economy functions with several different currencies, it will need a tool to exchange one specific unit of currency into another for several reasons such as accepting payments or lending and more.
For that matter, it is needed to have DEX or Decentralized Exchanges.
These exchanges fall under the subcategory of fintech and can be possibly classified as Developer Tools.
There are several blockchain projects that have already started to combine the 0x protocol and such a trend is expected by the experts to continue in the years to follow.
Since the world has now gone digital and there is a high possibility of a large number of digital tokens to emerge in the near future adding to the already humongous list of tokens, it is needed to do away with the complexities in the apps.
This will result in a widespread adoption of these apps while people use several tokens.
This is a significant benefit that is provided by the decentralized exchanges.
If you consider the insurance and lending subcategories of the economy, they benefit a lot from scaling of the economy through risk aggregation.
When these markets open up now and when the people are allowed to be priced either on an individual and differentiated basis or in larger pools based on their risk profile, it will reduce the cost significantly.
This will put the people in a winning position.
Since blockchain networks store all previous interaction on the chain and these are both immutable and stateful, it raises the confidence of the users knowing that the data contained in it comprising their individual history is not tampered with.
Sovereignty
Over time, especially over the past decade, people have shifted from using the desktop apps to the cloud-based apps that do not run locally and store all data of the users on remote servers.
These servers are typically centralized services and that is the most significant reason that these servers are the primary soft targets of the hackers.
There have been lots of instances and times when these servers were hacked before and these are frequently hacked now as well.
In such a situation, sovereignty is one important concern which can be resolved to a considerable extent by using blockchain technology in spite of its performance and scalability issues.
It is all due to the trustless architecture of blockchain technology that provides the necessary value which also resolves the performance issues inherent in it to some extent while handling a large number of sensitive data of the users.
This eliminates the need to rely on an external third party to safely keep the data.
Ideally, according to crypto-economics, the users do not need to trust any organization or individual but rather on the node operators on the blockchain who validate the transactions made on the chain.
They are rewarded for their honest contribution to the safety and security of the chain based on the natural behavior and theory of human behavior.
It says that people will behave more rationally and perform better when they are properly incentivized.
All the blockchain projects in this particular category ensure proper functionality and transparency through crypto-economics and cryptography.
Value Exchange
One of the key factors in the design of the Bitcoin protocol is its ability to build trust and confidence among all the different parties involved in a transaction.
This is in spite of the fact that there is no element of trust or relationship between them out of the blockchain.
Ideally, the data of each transaction is shared among the different participants on the network in an immutable manner which does not allow anyone to make any changes in the records or tamper with it.
In theory, people tend to work more like an organized firm or organize into one when the cost of coordinating is greater in the market as compared to the cost within the firm.
In blockchain, all the node operators work in tandem though are separated by geo locations just like a proverbial firm and still they do not need to trust each other.
It is due to the principles of blockchain and crypto economics that the complexities, time factors, and most importantly the need to develop trust among the participants are abstracted away.
This allows a large number of people to work together and share the rewards for their combined contributions towards the blockchain security.
And, the best part of it is that for that they do not need to have a hierarchical structure as you see in a traditional firm.
Today especially in the P2P marketplaces the most significant evil is the rent seekers and middlemen when it comes to maintaining safety and order and to enforce rules.
However, it is the different areas in the crypto economic system and the principles of blockchain that replaces trust from these marketplaces by eliminating the need of middlemen.
It therefore eliminates the fees one needs to pay to them for their service rendered.
This means that the users can now exchange products and services at a cost that is significantly lower.
Such type of blockchain projects that upholds the exchange value also comes with subcategories. The two main ones are fungible and non-fungible markets.
Just as the name suggests, the fungible markets allow the users to exchange fungible products and services.
This can be commoditized as storage, bandwidth, computation, energy, internet connectivity, and more.
All those businesses that sell these products have to compete today on economies of scale. This can only be replaced by better ones.
This is not a very difficult task now and at the same time it can also collapse margins to zero by creating latent supply and letting everyone join the network.
On the other hand, the non-fungible markets typically do not offer the same benefits.
However, these markets offer a good opportunity to the users to earn much more than what the NFT assets actually worth.
This is because there is no middleman, once again, to determine its value after taking their commission on sales.
The Global Distribution System or GDS is commonly used in the airline industry. This is actually more of a shared data layer.
This model resembles a data storage that is centralized wherein all of the airlines store their inventory data.
This helps the airline to coordinate the information in the best possible way which includes fares and routes.
This helps the aggregators to replace the middlemen or traditional travel agents and builds a front end for the users to make their transactions on top of the systems.
Traditionally, the markets that function mainly relying on the intermediary aggregators offer a considerably high barrier to entry.
No one can compete with them directly. However, with the technological developments, now a substitute for an intermediary can be created in order to aggregate allied metadata, incumbents, and user preferences.
The blockchain based projects provide one single and powerful technological catalyst with financial incentives which have the potential to open new avenues and several markets.
In these cases, the value will not accrue to the intermediaries any longer. Instead, it will be given to the companies and individuals that provide the relevant data.
When you use the shared data blockchain protocols, you can use these specific types of datasets with the other apps when they hook into the shared data protocols.
This will eliminate the barriers to entry and at the same time increase the competition among them. As a result, it will eventually expedite the pace of innovation.
Companies that use machine learning for extracting insights and then selling the datasets to a wide range of customers will be benefited a lot while using the shared data blockchain protocols.
They will now not have to hire or look for people to provide them with the desired datasets.
Instead, the protocol itself will share and annotate the data to construct different models that will help them to extract the necessary insights based on the data.
The contributors of these datasets may be rewarded by the companies with tokens for purchasing datasets and insights.
This will increase the value of the companies. Also, this will result in more contributors joining the project and providing datasets of higher quality.
With a large number of datasets now available to the companies, they can now function according to the rate and conditions set by the market.
This will ensure smoother and proper functioning of the company and a better service to the users will be provided.
Lots of similar possibilities are also offered by the open data platforms which have been a very popular and productive startup idea.
Several companies have found a lot of success by following this model. However, the challenge could be in the areas of business and sales development.
A lot of such companies typically sell their dataset and information to larger businesses that use these for their business benefits.
However, these larger corporations do not sell their datasets to anyone.
Therefore, it will be quite interesting to see how exactly they distribute their data among others now that they have started using the decentralized projects.
On the other side, if you look at those standalone private companies that were deprived of the possibility to pursue the same model and make some profits previously can now make use of these model blockchain projects as well.
This will make the economics work for them as well which failed to do before.
Authenticity
Finally, there are few blockchain projects that use digital assets to prove their authenticity.
These digital assets are however native to a particular type of blockchain and projects and either represent data or real world goods.
The immutability factor of the public blockchain network allows the participants on it to be confident about the authenticity and reality of the data.
They also believe that this data and information will be available to them at any point of time and will be easily accessible in the near and distant future when they need them.
It is for this particular reason blockchain technology should be used while dealing with sensitive user data and information in a market that has been rife with fraud and scams.
This will give the users the desired assurance about the integrity and authenticity of the market.
Conclusion
As you can see after reading this article, blockchain technology can help in several different areas over and above making financial speculations. However, infrastructure development in terms of cost and privacy will capture more value.
I have special interest in crypto and intend to help common people to gain knowledge about the digital asset as well as its potential. Follow Me at Linkedin.
