Three generations of cryptocurrencies. A Dao and potential applications of second-generation cryptocurrencies.
Cryptocurrency Dash is an example of a decentralized autonomous organization. On the Dash network, a percentage of new currency that the network creates goes into the development fund. This is one of the big differences between Dash and the Bitcoin network because on the Bitcoin network the miners get 100% of the coins that the network creates as a reward for creating blocks of the Bitcoin blockchain.
All members of the DASH network can see how much money is in the fund and where it came from. All members of the network also get to make proposals about improvements and changes to the network. All proposals are also visible to anyone. If the development fund has enough money in it to fund a proposal, members can vote which proposals get funded. You can see the proposals that the members are voting on as you are reading this article by visiting https://dashvotetracker.com/
Once a proposal gets enough votes, it gets implemented. People are hired specifically to do work on the project and everyone can see how much contractors get paid and what they are getting paid for.
Applications of second-generation cryptocurrencies
Features such as smart contracts make it possible for second-generation cryptocurrencies to enter financial and insurance markets on a scale that was not possible with first-generation cryptocurrencies.
For example, banks can use blockchain in capital markets and trade finance. They can create smart contracts to guarantee that sellers will be paid and the money will stay in escrow until buyers receive the goods. This approach could be extremely useful in industries with high prices of assets, such as real estate or car sales. In the United States, the average homeowner sells and buys real estate every five to seven years. Blockchain could improve all parts of the process, including the verification of funds, transfer of property rights and elimination of fraud.
Smart contracts can also play a role in trading, enabling users to buy and sell goods and services when price reaches a certain threshold, providing safety and confidence that no insider trading, error or manipulation will occur because a blockchain network is managing the contract.
Execution of documents such as letters of credit by big banks is usually a slow, lengthy process. This process can take hours on a blockchain network instead of days via a traditional letter confirmation and funds disbursement path.
Insurance via smart contracts is yet another tremendous opportunity. A smart contract can allow both buyers and sellers of insurance manage claims in a fully automated and transparent manner. For example, a farmer could buy crop insurance that makes a payment to the farmer if there is no rain for X number of days and the weather stays hotter than Y or colder than Z for N days. A blockchain network could manage the data and execute such a contract automatically. A blockchain network could also make it impossible to submit invalid claims. This way, the technology will save lot of money for insurers and optimize the process, which would mean more effective business, more competition and better rates and conditions for insurance customers.
Another obvious use for blockchain technology is the supply chain management. Because blockchains are temper-proof, they are great for tracking goods from the point of origin all the way to the final seller as the goods are moving through the chain and changing hands multiple times. Second-generation blockchain networks allow users not only to organize and track data, but also to use smart contracts to create sequences of events within a supply chain, for example, to assign shipping containers to different ships, trucks or trains automatically as the containers are entering a port, without having to employ any people to do the work.
Blockchain in healthcare
Healthcare is yet another great opportunity for blockchain technology. According to researchers from John Hopkins University (source: https://hub.jhu.edu/2016/05/03/medical-errors-third-leading-cause-of-death/), each year in the United States more than 250,000 death occur because of medical errors. This number means that deaths from medical errors are the third leading cause of deaths in the United States, right after heart disease and cancer. One of the issues that the scientists from John Hopkins University brought up was that current medical system is optimized for billing and not for collection of any other information, including vital health statistics. The researchers argued that only the issues on top of the list of causes of death get a lot of attention and funding. In the begging of the twenty-first century, these issues were cancer and heart diseases. Scientists from John Hopkins university suggest that the more accurate the data, the more attention the issues will get.
The study showed that the majority of error occur not because doctors do bad work, but because of the complexities in the coordination of care, record-keeping, fragmented insurance system, and other issues.
Healthcare blockchains could help the medical industry, reduce the number of errors, improve the coordination of care via smart contracts and collect vital information. Public healthcare blockchains could contain such information as age, gender and certain medical history facts without revealing the identities of particular patients. Then, any interested individual or organization could access the blockchain and get always get the same accurate information.
Private blockchains could store full medical records of patients and connect to specialized medical devices, providing them with necessary information and recording information they would get from a device.
One of the biggest issues in the medical industry today is disconnected data. Different doctors and different devices collect and store data that is extremely fragmented and can be lost or damaged. Blockchain networks could solve all of these issues.