Before we examine how blockchain is used, it is important to understand why is blockchain so useful — what important features make it so?

It is useful to keep in mind these key characteristics of blockchain when exploring the various uses of blockchain technology, because they are recurring themes when examining why blockchain is used for each of these applications. Blockchain is:

Decentralized: No single user has control over the blockchain — instead, all users of the blockchain collectively retain control. Why?

Immutable: once data is entered into blockchain, it is “immutable” or “irreversible” — i.e. it is prohibitively difficult or almost impossible to amend the data. Why?

Transparency: Each node has its own copy of the blockchain — i.e the full record of all the data stored on the blockchain since the blockchain’s inception. Additionally, as new blocks are constantly added to the blockchain, this copy/record gets updated. Thus, anyone on the blockchain can see any transaction that has been recorded and that any transaction that gets recorded onto the blockchain.

Privacy/anonymity: While anyone on the blockchain can see any transaction made on the network, the identities of users are protected. Although each node/user has the entire transaction history of the blockchain, you would not be able to match it to an actual individual/person. This is because transaction parties are represented only by their addresses (derived from their public keys using a hash function), which does not reveal users’ identities or personal information. What you will see is only a long string of letters and numbers (i.e. the addresses/hashes). A downside may be that this anonymity may encourage hacking and fraud— since you can only track the address where the funds are transferred to, but not identify who is the exact person responsible for the hacking or fraud.

How has blockchain been used, and what other possible ways can it be used?

(1) EXCHANGING DIGITAL ASSETS: Blockchain technology can be used to transfer ownership of digital assets, e.g. cryptocurrency without central authorities/intermediaries like banks, stock exchanges, payment processors.

(2) STORING DIGITAL RECORDS/LEDGERS: This could be applied in various ways/industries.

(3) SMART CONTRACTS: A smart contract is an agreement between 2 parties in the form of computer code — completely digital. The terms and conditions of the contract are written into the lines of code, which exists on the blockchain. This code controls the execution of the contract.

Smart contracts are only carried out when its conditions are satisfied, i.e. the occurrence or non-occurrence of an action or event. For example, when item A is transferred to Party 1, then the smart contract releases Party 1’s money to Party 2. If Party 2 fails to transfer item A to Party 1, then the smart contract returns the money back to Party 1. Or when event B occurs, then the smart contract releases Party 1’s money to Party 2. If event B fails to happen, then the smart contract returns the money back to Party 1.

If this condition (e.g. occurrence of a certain event or action) is dependent on external information or data outside of the blockchain network, then what or who determines whether this condition is satisfied?

Such transactions can be carried out without a central authority or third-party intermediary because they are processed by the blockchain itself once the requisite requirements are met (i.e. “self-executing”). If the requirements are not met by either party (e.g. failing to transfer the purchase price), they will not receive whatever they were promised by the other party. Hence, transacting parties can be assured they will not give something up without getting what was promised in return.

Usually, for many transactions, a third party is often required to facilitate the transaction and create trust between the two transacting parties. However, due to their self-executing nature, smart contracts on a blockchain do not require such a central intermediary. Transacting parties are not required to trust or even know each other for the transaction to be facilitated. This creates a trustless system, and allows blockchain to essentially function like an “escrow”, just without the third-party entity.

Additionally, because smart contracts are stored on the blockchain, they possess all the important traits of blockchain. Transactions are trackable (can be seen by all blockchain users — transparent) and irreversible (once smart contract is created, its terms and conditions cannot be changed or tampered by someone who wishes to change them — immutable). Smart contracts are also decentralized — meaning that once the smart contract is validated by users on the network, it makes it difficult for somebody to tamper with the smart contract.

Simplified examples of smart contracts include:

Fun fact: one of the biggest blockchain systems which supports smart contracts is the Ethereum blockchain network.

We have examined what features makes blockchain technology so useful and revolutionary, as well as several ways of how blockchain can be applied in the real world. Of course, there are just so many other potential applications of blockchain waiting to be discovered — and the sky’s not even the limit!

***For a quick refresher on what is blockchain and how it works, read more here.

Mysitko.Network is created as the base layer of web3. Mystiko.Network believes that personal data privacy, especially personal financial data privacy, is deeply rooted in everyone’s blood of freedom. While every transaction is public and visible to all on blockchain, one often feels awkward when his/her account balances, assets holdings, investment records, etc. are exposed to a public glass box.

At this moment, Mystiko.Network is integrating with Celer inter-chain message framework to provide cross chain private transaction features. Here is a brief workflow of such integration. Mystiko.Network will also explore and utilize other inter-chain communication protocols, such as Cosmos IBC, to enable cross-chain private transactions across all EVM-compatible and non-EVM chains.

Celer Network is the leading inter-blockchain and cross-layer communication platform that facilitates fast, secure, and low-cost cross-chain composability and bridging. Celer’s core applications and middleware like the Inter-chain Message Framework, cBridge, and Layer2.Finance have attracted important blockchain contributors and massive end users in the DeFi, blockchain interoperability, and gaming spaces to build and use inter-chain native applications enabled by the Celer tech suite.

Follow Celer Network:

Website| Telegram | Twitter | Github | Discord |

Mystiko.Network is the base layer of web3 that provides both connectivity and confidentiality to all blockchain data, transactions and applications. Mystiko.Network offers users a single-click cross chain private transaction experience in an all-in-one wallet that supports multiple blockchains and cross chain bridges. Mystiko Protocol utilizes secure zero-knowledge proof technology together with advanced encryption and shield address designs to break the link between users’ deposit wallet address on source chains and withdrawal address on destination chains.

Learn more about Mystiko. Network:

Website| Twitter | Telegram | Discord | Medium |

According to Investopedia, “the network effect is a phenomenon whereby increased numbers of people or participants improve the value of a good or service.” To give you an example, think of the phone network. If you are the only one with a cell phone, it would be rather useless since you couldn’t call anyone. But, with each additional user joining the network, the value of your cell phone service goes up because you will be able to reach more people, causing exponential growth in the number of users and the network.

There was a three-year study done by NFX in which they looked at how the network effect impacted the digital world. They found that network effect accounted for 70% of the value creation in tech in the past twenty-three years. This study shows that if you have a system that takes advantage of the network effect, you have a good chance of making it a business. Look at all social media companies; they are some of the biggest in the world because they optimize the network effect. Each user added brings value to all other users in the network.

Robert Metcalfe, one of the inventors of the Ethernet, explained that the value of the network is proportional to the square of the number of users, which became known as “Metcalfe’s Law.” For example, if you have ten users, the network value is 100 (10 x 10 = 100). If five more users join, the network value increases to 225 ( 15 x 15 = 225). As more and more users get added, the network value rises. This kind of network is known as a direct network, meaning each user is connected to every user, and when a new user is added, a new connection with every other user is created.

David Reed, a computer scientist from MIT, elaborated further on Metcalfe’s Law, stating that Metcalfe’s Law understated the value of a network. He concluded that “the value of a network increases dramatically when people form subgroups for collaboration and sharing,” which became known as Reed’s Law. Reed’s Law concludes that the value of the network increases exponentially in proportion to the number of users (2^N). For example, if you have ten users, the network value is 1024 (2¹⁰), and if there were fifteen users, the network value would be 32,768 (2¹⁵).

As I’ve explained, most of the value created in tech in the past twenty-three years was because of the network effect. Why is that? It’s because humans have this innate desire to be a part of something and be included, whether it’s supporting/participating on a sports team, joining a Facebook group, a political party, or even a book club. If your product or service can appease that innate human desire, then that product or service has an exponentially greater chance of succeeding than others.

Drip’s network effect is probably the biggest reason, in my opinion, why it has had the success that it’s had. Each new user that joins the faucet brings value to every other user, and with Drip’s team function, each new user increases the network value exponentially. This network value creates this great defensibility against other crypto-assets and has value-creation advantages that most cryptos cannot compete with.

As Drip’s network value keeps growing exponentially, the number of new users will continue to grow. If you look at the graph below, you can see that the number of monthly new accounts is beginning to grow exponentially, which means in the next month, I can the number of users explode past 100,000.

Drip’s network effect is the most overlooked reason it’s succeeding. If you look at Tik Tok, Facebook, Instagram, Twitter, and even Medium, they all take advantage of the network effect and have all had success. They take advantage of the human desire to be a part of a community. And while the network effect isn’t a guarantee a good or service will last, it does give a good indication that it might last, and that’s why I’m so bullish on Drip’s success in the future. Drip gives people something to be a part of, and I like to think it gives people hope (as cheesy as that might sound). It provides hope that someday in a few years, you will change your financial situation and not have to worry about money.

If you do decide to join the Drip Network, please consider using my buddy link: 0x88C4c81c7411C45458f4E6ed6a5FA4fb166A2Dca. I do weekly airdrops and birthday airdrops and sign-up bonuses for using my link.

The content is for informational purposes only; you should not construe any such information or other material as financial advice. There are risks associated with investing in Cryptocurrencies, so do your research and never invest more than you can lose. The author does not take any responsibility or liability for any investments, profits, or losses you may incur due to this information.