Hype overshadowed adoption, but important projects continued.
Commentary by Ankur Rakhi Sinha
Hype cycles dominate the news, driven by a variety of factors including elections, market sentiment, regulatory changes, technological advances, and the broader economy. The cycles also affect venture investment in crypto. In technology (perhaps with the exception of artificial intelligence), venture capital funding has focused businesses on profitability and direct use cases.
We need proven use cases to drive sustainable growth for the industry. Proven use cases should demonstrate growing adoption and sustainable unit economics, even if profitability is pushed down the road due to current capital investments and marketing costs.
Blockchain record keeping
One of the most promising and largely unfulfilled use cases for blockchain is replacing legacy databases. Ten years later, blockchain databases are caught between the transparent, stable nature of blockchain and the need to protect a person's or business's private information.
Latest: Application-oriented blockchain oracle can help Web3 projects connect with the world.
Governments and non-governmental organizations (NGOs) can use OnChain Records to increase transparency around the use of funds without disclosing personal information about the individuals or communities they support. Citizens and journalists can use the onchain registry to track the progress of complaints to public authorities without revealing the details of the complainant. Even records of charitable donations can be chain-tracked, as a tree-planting NGO has shown.
It's not just the chain moving that records – alternative properties are also growing.
A fraction of the real world property
Tokenization of real-world assets (RWAs) is another ripe use case for blockchain. Tokens enable fractional ownership of high-value assets, increasing liquidity. Protocols are tokenizing millions of dollars in real estate and equipment, while tokenized real estate has seen strong growth.
Beyond physical real estate, the $30 trillion air rights market is also being named. Air rights are legal property rights to land or space above a building, allowing airspace to be developed or leased.
Property ownership and transaction records can be stored securely on-chain, increasing transparency and removing middlemen from processes such as proof of provenance – whether you're trading fractional works of art or wrought iron. Tokenized personal credit has quickly grown to more than $9 billion, as it addresses critical investor concerns of liquidity, efficiency and transparency.
Invest in useful tests to build trust in Web3 data
Crypto has a trust problem. More broadly, many regulators and the general public still view the Web3 industry as speculative, although this is changing. The experiments and pilots discussed here are important to demonstrate the tangible value necessary to build trust in Web3 projects. Today's data-driven economy requires companies and individuals to trust their data on-chain to feed these Web3 business models.
Fortunately, modular encryption has improved. The combination of zero-knowledge authentications and fully homogenous encryption (FHE) means that Web3 data no longer needs to be secure or confidential. ZkFHE is a cryptographic technique that allows the computation of encrypted data while ensuring the correctness of the results without revealing the accuracy of the results or the computation steps.
Globally, we are at a significant inflection point for RWA tokenization, onchain record-king and the growing movement to adopt AI onchain. This combination allows for trusted calculations with encrypted data that still provide for verified calculations. Such applications enable the training of AI models with onsen data.
Exploiting issues like these with clear and immediate benefits are essential for the crypto industry to attract growth capital from serious investors. Validated use cases should be requirements for consideration by professional investors, developers, and users. Solving fundamental problems is a way for the Web3 industry to mature into a force that the wider community can invite to build a better version of the Web2 world.
Now is the time to explore new use cases.
Ankur Rakhi Sinha is the founder and CEO of AirChains. Prior to founding ErChain, he worked as an engineer designing institutional use cases in India at the consulting firm Retcons Technologies with Matic and Polygon Edge. Sinha was previously a radio host who studied mining engineering at the Government Engineering College in Jagdalar while mining for ether in his spare time.
This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.
Commentary by Ankur Rakhi Sinha
What do trees, air rights and personal loans have in common? All of them are effective chain reactions that oppose the stimulus.
Hype cycles dominate the news, driven by a variety of factors including elections, market sentiment, regulatory changes, technological advances and the broader economy. The cycles also affect venture investment in crypto. In technology (with the possible exception of artificial intelligence), strict venture funding has focused businesses on profitability and direct use cases.
We need proven use cases to drive sustainable growth for the industry. Proven use cases should demonstrate growing adoption and sustainable unit economics, even if profitability is pushed down the road due to current capital investments and marketing costs.
Cryptocurrency can only bear fruit if we channel our energies into real-world use cases, even for testing. It's the only thing that encourages Web2 companies to buy Web3 solutions and developers to build the decentralized applications needed to grow the ecosystem.
Blockchain record keeping – an unfulfilled promise
One of the most promising and largely unfulfilled use cases for blockchain is replacing legacy databases. Ten years later, blockchain databases are caught between the transparent, stable nature of blockchain and the need to protect a person's or business's private information. A medical patient, for example, may want all relevant information from their medical records to be readily available to all treating doctors, but not at the expense of having all their medical information publicly available.
Latest: Application-oriented blockchain oracle can help Web3 projects connect with the world.
Governments and non-governmental organizations (NGOs) can use OnChain Records to increase transparency around the use of funds without disclosing personal information about the individuals or communities they support. Citizens and journalists can use the onchain registry to track the progress of complaints to public authorities without revealing the details of the complainant. Even records of charitable donations can be chain-tracked, as a tree-planting NGO has shown.
It's not just the chain moving that records – alternative properties are also growing.
An era where real world property is not fragmented
RWAs are experiencing a renaissance of sorts.
Tokenization of real-world assets (RWAs) is another ripe use case for blockchain. An asset token represents the ownership of RWAs such as real estate, equipment, art or commodities as crypto tokens on the blockchain. Tokens enable fractional ownership of high-value assets, increasing liquidity. Protocols are tokenizing millions of dollars in real estate and equipment, with tokenized real estate showing strong growth.
Beyond physical real estate, the $30 trillion air rights market is also being named. Air rights are legal property rights to land or space above a building, allowing airspace to be developed or leased.
The RWA token opens up these asset classes to smaller investors but reduces transaction friction. It also promotes programmability, enabling community management models that are not possible with traditional assets, such as revenue sharing.
Asset ownership and transaction records can be stored securely on-chain, increasing transparency and eliminating intermediaries from processes such as proof of provenance. They remove – whether you're dealing in fractional works of art or wrought iron. Tokenized personal credit has quickly grown to more than $9 billion, as it addresses critical investor concerns about liquidity, efficiency and transparency.
Invest in useful tests to build trust in Web3 data
Crypto has a trust problem. More broadly, many regulators and the general public still view the Web3 industry as speculative, although this is changing. The experiments and pilots discussed here are important to demonstrate the tangible value necessary to build trust in Web3 projects. However, today's data-driven economy requires companies and individuals to trust their data on-chain to feed these Web3 business models.
Fortunately, modular encryption has improved. The combination of zero-knowledge authentications and fully homogenous encryption (FHE) means that Web3 data no longer needs to be secure or confidential. ZkFHE is a cryptographic technique that allows you to perform calculations on encrypted data without revealing the original data or calculation steps, while ensuring the accuracy of the results.
Globally, we are at a significant inflection point for RWA tokenization, onchain record-keeping and the growing movement to adopt AI onchain. This combination allows for trusted calculations with encrypted data that still provide for verified calculations. Such applications enable training of AI models with onsight data.
Exploiting issues like these with clear and immediate benefits are essential for the crypto industry to attract growth capital from serious investors. Establishing value through real applications based on critical functions such as record keeping demonstrates blockchain's ability to modernize critical infrastructure while prioritizing user privacy and data security.
The web3 magic loop has changed. Validated use cases should be requirements for consideration by professional investors, developers, and users. Solving fundamental problems is a way for the Web3 industry to mature into a force that the wider community can invite to build a better version of the Web2 world.
Now is the time to explore new use cases.
Ankur Rakhi Sinha is the founder and CEO of AirChains. Prior to founding ErChain, he worked as an engineer designing institutional use cases in India at the consulting firm Retcons Technology with Matic and Polygon Edge. Sinha was previously a radio host who studied mining engineering at the Government Engineering College in Jagdalar while mining for ether in his spare time.
This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.
