Vitalik Buterin reveals non-finance uses for blockchain

What

Vitalik Buterin has released a paper called “Where to use a blockchain in non-financial applications?”. He discusses how blockchain technology can be used for managing data, reputations and accountability

Why

In the intro to the paper, Buterin says he supports non-financial use cases of blockchain, such as soul-bound NFTs, as well as blockchain voting but that “It’s worth zooming out and asking a broader question: where does it make sense, in general, to use a blockchain in non-financial applications?”

What next

Buterin outlines a number of uses for blockchain, such as common knowledge pools, modifying and awarding certifications (such as a degree), “negative reputation” and open-source metrics

The story

When discussing solving real-world problems on-chain, critics tend to ask what the point is, and it’s an important point to raise. If you have a private database for a small business, taking it on-chain would likely be expensive and a waste of time as it’s data that does not need to be distributed across the world.

As Buterin outlined in his paper, bringing blockchain and finance together makes sense, since finance is a global entity. However, Buterin believes there are still non-financial uses cases for blockchain, especially in the areas of data and reputation:

Common knowledge — “Important for collaboration” this would allow a group to share their views on a topic to find like-minded collaborators. The Ethereum Founder envisions people starting “commitment pools” on a statement and then having others gradually join. This would could then allow people to speak out on an issue in numbers once they know they have support.

Modifying Certifications — The example Buterin gives here is a college that issues NFT degrees to students; one day a student is found to have cheated on their exams but continues to use their NFT degree despite the college revoking their qualification. To get around this, Buterin argues that since issuance is common and revocation in a case like this is rare, certifications could be awarded off-chain, but revoked on-chain. This on-chain record could then be checked by employers and interested parties.

“Negative Reputation” — Although this one may sound a bit like that Black Mirror episode, it does pose some food for thought. The proposal here would allow people to assign a negative note to someone’s wallet. Similar to the modifying certifications above, you could make a note on the cheating student’s CV to outline that they once cheated on an exam. In theory, this could help to discourage bad behaviour. While Buterin does acknowledge the potential for negative reputations being modern-day dystopian “scarlet letters”, he argues that having too little accountability for bad behaviour is not good either. 

Open-Source Metrics — Diversity of opinion can be difficult to gauge in polling data but arguably provides more considered outcomes when more views are taken into account. This is partially solved on platforms such as Reddit, where the reputation of a poster is a metric considered by other users when reading their posts. However, Buterin believes there is a more elegant solution where the algorithm used to determine reputation is open source and uses “inter-subjectivity”. This means reputation is not based on one universal score but is more subjective depending on the person and the reader. Buterin concludes this section with a warning: “If we don’t create good large-scale aggregates of social data, then we risk ceding market share to opaque and centralized social credit scores instead.”

Want to learn more about blockchain technology? Check out our learning resources.