Cardano is considered an exciting cryptocurrency because it is built on a unique blockchain platform that utilizes a proof-of-stake consensus algorithm called Ouroboros. This algorithm is more energy efficient than the proof-of-work algorithm used by other cryptocurrencies like Bitcoin. You could call this a sustainable consensus algorithm. Additionally, Cardano strongly focuses on security and regulatory compliance, and its creators have emphasized the importance of using the technology for social impact and financial inclusion. The development team behind Cardano, IOHK, is also working on a number of exciting developments, such as smart contracts and a decentralized virtual machine, that has the potential to expand the capabilities of the Cardano blockchain significantly.
Many potential real-world use cases for blockchain technology has the potential to have a positive social impact.
Some examples include:
- Microfinance: Blockchain technology could be used to create decentralized platforms for microfinance, allowing individuals in developing countries to access credit and financial services without needing a traditional bank. An example of this on Cardano is Thrift Finance and Flac finance.
- Supply chain management: Blockchain-based systems can be used to create transparent and tamper-proof records of transactions in supply chains, which can help to improve efficiency and reduce the risk of fraud. An example of this on Cardano is Scantrust's usage of Cardano metadata for Wine anti-counterfeiting and supply chain management.
- Identity verification: Blockchain-based digital identity systems could be used to provide secure and verifiable identities for individuals, especially for those who lack proper identification documents. An example is the framework Atala Prism made for identity solutions on Cardano.
- Remittances: Blockchain-based platforms could be used to facilitate low-cost, near-instant cross-border money transfers, making it easier for individuals and businesses to send money to family and friends abroad. An example of this on Cardano would be Coti’s solutions for remittance.
- Land registry: Blockchain technology could be used to create tamper-proof land registry systems, which can help to prevent fraud and increase transparency in property ownership. While no current product exists for this on Cardano, there are projects proposing ideas to tackle this, such as Landano.
- Voting system: Blockchain-based voting systems could be used to create tamper-proof and transparent voting systems, which can help to improve the integrity of elections and increase voter turnout. On Cardano, there are multiple such voting systems, one very prominent one is Catalyst.
- Charity/donations: Blockchain technology can provide transparency and traceability to donations, allowing for better tracking of where funds are going and how they are being used. An example is Veritree on Cardano and the numerous staking pools having charitable missions and donations.
- Decentralized storage: Blockchain technology can be used to create decentralized storage networks where individuals can rent out their unused storage space to others in exchange for cryptocurrency. This can provide an alternative to traditional centralized storage providers and can also help to increase the security and resilience of data storage. An example is Iagon.
- Decentralized AI marketplaces: SingularityNET is a decentralized platform for AI services, which allows developers to share and monetize their AI models. It is currently integrating with the Cardano blockchain.
- Non-Fungible Tokens (NFTs) on the Cardano blockchain can be used in various ways for gaming, for example, as in-game assets. NFTs can be used to represent assets in virtual worlds, such as land. NFTs can be used to represent unique game collectibles, and NFTs can be used to represent game tournament entries. An example of a game on Cardano using NFTs is the trade card game Wolves of Rome.
- Digital central bank currencies: Blockchain technology can be used to increase the level of privacy and security for banks' potential issuance of digital currency. An example is PEreDI: Privacy-Enhanced, regulated and distributed central bank digital currencies.
- Digital rights for artists: Using blockchain to have direct control over rights from artist to consumer can help cut intermediaries and ensure more interaction between the artist and fans. An example of this for Cardano is a platform where artists and fans have shared ownership called Newm. With books, book.io is trying to do some of the same.
These are just a few examples of how blockchain technology and cryptocurrency could be used to create real-world financial solutions with a positive social impact
Apart from that, in 2023, we will from Cardano see the age of sidechains. A sidechain is a separate blockchain attached to a main blockchain (the "parent" chain) using a two-way peg. This allows for the transfer of assets between the sidechain and the parent chain and enables the sidechain to have its own unique features and use cases while still being secured by the network of the parent chain. World Mobile token will likely launch a sidechain in 2023 for its data layer. Hydra heads will offer L2 payment channels, and Midnight could potentially become a data privacy-centric sidechain of Cardano.
2023-2024 could be an exciting time period for the Cardano blockchain when it comes to developments.
This text is intended to inform and is not an investment recommendation.
