Opinion by: Ankur Rakhi Sinha
Hype cycles dominate the news, driven by various factors, including elections, market sentiment, regulatory changes, technological developments and the broader economy. The cycles also affect venture investment in crypto. Across tech (perhaps except for artificial intelligence), tighter venture funding has refocused businesses on profitability and live use cases.
We need proven use cases to drive sustainable growth for the industry. Proven use cases need to 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 earliest promised and least-fulfilled use cases for blockchain was replacing legacy databases. More than a decade later, blockchain databases are caught between blockchain’s transparent, stable nature and the need to protect a person or business’ private information.
Recent: Application-specific blockchain oracles can help Web3 projects connect to the world
Governments and non-governmental organizations (NGOs) can also use onchain record-keeping to increase transparency around the deployment of funds without revealing personal information about the individuals or communities they help. Citizens and journalists can now use onchain record-keeping to track the progress of complaints made to public authorities without revealing sensitive details of the complainant. Even records of charitable donations can now be tracked onchain, as a tree-planting NGO has shown.
It’s not just record-keeping moving onchain — tokenized assets are also growing.
Real-world asset fractionalization
Tokenization of real-world assets (RWAs) is another ready use case for blockchain. Tokenization enables the fractional ownership of high-value assets, increasing liquidity. Protocols are already 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 tokenized. Air rights are the legal property rights to the space above land or a building, allowing for the development or leasing of that airspace.
Asset ownership and transaction records can be securely stored onchain, increasing transparency and removing intermediaries from processes like provenance verification — whether you’re trading fractional artworks or tokenized steel. Tokenized private credit has quickly grown to more than $9 billion, as it addresses critical investor concerns of liquidity, efficiency and transparency.
Invest in valuable experiments to build trust in Web3 data
Crypto has a trust problem. Broadly, many regulators and the general public still view the Web3 industry as speculative, although that may be changing. The experiments and pilots discussed here are vital in demonstrating the tangible value needed to build trust in Web3 projects. Today’s data-driven economy requires companies and individuals to have confidence in putting their data onchain to feed these Web3 business models.
Fortunately, modular encryption has evolved. The combination of zero-knowledge proofs and fully homomorphic encryption (FHE), for example, has meant Web3 data no longer has to be secure or confidential. ZkFHE is a cryptographic technique that allows for computations on encrypted data while proving the correctness of the results without revealing the underlying data or the computation steps.
Globally, we are at a significant inflection point for RWA tokenization, onchain record-keeping and the growing move to take AI onchain. This combination allows for trusted computation with encrypted data that still provides for verified computations. Such applications enable the training of AI models with onchain data.
Use cases like these, with clear and immediate benefits, are essential for the crypto industry to attract growth capital from serious investors. Proven use cases should be the requirement for consideration from professional investors, developers and users. Solving fundamental problems is how the Web3 industry matures into a force that the broader society will invite in to help build a better version of the Web2 world.
The time to test new use cases is now.
Ankur Rakhi Sinha is the co-founder and CEO of Airchains. Before founding Airchains, he worked with Matic and Polygon Edge as an engineer designing institutional use cases in India through his consulting firm, Retcons Technology. Sinha was previously a radio host who studied mining engineering at the Government Engineering College, Jagdalar while mining Ether in his spare time.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Opinion by: Ankur Rakhi Sinha
What do trees, air rights and private credit have in common? They’re all productive onchain experiments that defy the hype.
Hype cycles dominate the news, driven by various factors, including elections, market sentiment, regulatory changes, technological developments and the broader economy. The cycles also affect venture investment in crypto. Across tech (perhaps except for artificial intelligence), tighter venture funding has refocused businesses on profitability and live use cases.
We need proven use cases to drive sustainable growth for the industry. Proven use cases need to demonstrate growing adoption and sustainable unit economics, even if profitability is pushed down the road due to current capital investments and marketing costs.
The crypto spring will only bear fruit if we direct our energies toward real-world use cases, even experimental ones. It’s the only thing that will convince Web2 firms to buy Web3 solutions and encourage developers to build the decentralized applications needed to grow the ecosystem.
Blockchain record-keeping — An unfulfilled promise
One of the earliest promised and least-fulfilled use cases for blockchain was replacing legacy databases. More than a decade later, blockchain databases are caught between blockchain’s transparent, stable nature and the need to protect a person or business’ private information. A medical patient, for example, may want all relevant data from their medical records readily available to any doctor treating them, but not at the cost of having all of their medical data accessible to the general public.
Recent: Application-specific blockchain oracles can help Web3 projects connect to the world
Governments and non-governmental organizations (NGOs) can also use onchain record-keeping to increase transparency around the deployment of funds without revealing personal information about the individuals or communities they help. Citizens and journalists can now use onchain record-keeping to track the progress of complaints made to public authorities without revealing sensitive details of the complainant. Even records of charitable donations can now be tracked onchain, as a tree-planting NGO has shown.
It’s not just record-keeping moving onchain — tokenized assets are also growing.
The unrealized era of real-world asset fractionalization
RWAs are experiencing a renaissance of sorts.
Tokenization of real-world assets (RWAs) is another ready use case for blockchain. Asset tokenization represents ownership of RWAs such as real estate, equipment, art or commodities as crypto tokens on a blockchain. Tokenization enables the fractional ownership of high-value assets, increasing liquidity. Protocols are already 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 tokenized. Air rights are the legal property rights to the space above land or a building, allowing for the development or leasing of that airspace.
RWA tokenization opens these asset classes to smaller investors while minimizing transaction friction. It also introduces programmability, enabling features like revenue sharing or community governance models that are impossible with traditional assets.
Asset ownership and transaction records can be securely stored onchain, increasing transparency and removing intermediaries from processes like provenance verification — whether you’re trading fractional artworks or tokenized steel. Tokenized private credit has quickly grown to more than $9 billion, as it addresses critical investor concerns of liquidity, efficiency and transparency.
Invest in valuable experiments to build trust in Web3 data
Crypto has a trust problem. Broadly, many regulators and the general public still view the Web3 industry as speculative, although that may be changing. The experiments and pilots discussed here are vital in demonstrating the tangible value needed to build trust in Web3 projects. However, today’s data-driven economy requires companies and individuals to have confidence in putting their data onchain to feed these Web3 business models.
Fortunately, modular encryption has evolved. The combination of zero-knowledge proofs and fully homomorphic encryption (FHE), for example, has meant Web3 data no longer has to be secure or confidential. ZkFHE is a cryptographic technique that allows for computations on encrypted data while proving the correctness of the results without revealing the underlying data or the computation steps.
Globally, we are at a significant inflection point for RWA tokenization, onchain record-keeping and the growing move to take AI onchain. This combination allows for trusted computation with encrypted data that still provides for verified computations. Such applications enable the training of AI models with onchain data.
Use cases 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 grounded in critical functions like record-keeping will demonstrate blockchain’s ability to modernize essential infrastructure while prioritizing user privacy and data security.
The Web3 hype cycle has shifted. Proven use cases should be the requirement for consideration from professional investors, developers and users. Solving fundamental problems is how the Web3 industry matures into a force that the broader society will invite in to help build a better version of the Web2 world.
The time to test new use cases is now.
Ankur Rakhi Sinha is the co-founder and CEO of Airchains. Before founding Airchains, he worked with Matic and Polygon Edge as an engineer designing institutional use cases in India through his consulting firm, Retcons Technology. Sinha was previously a radio host who studied mining engineering at the Government Engineering College, Jagdalar while mining Ether in his spare time.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
