Blockchain needs more non-speculative use cases to reach mainstream users. Decentralized IDs may be the next “killer” app, says Cardano’s sustainability lead.
For blockchain to reach the following billion mainstream users, it must include more non-speculative use cases.
According to Cardano’s sustainability lead, decentralized identification (ID) solutions may be the next blockchain use case to bring the next wave of mainstream adopters on board.
At a Web3 Corporate Innovation Day session, Alexandre Maaza of Cardano stated that blockchain technology needs more compelling use cases to draw in the next wave of adopters.
However, the rise of decentralized identity solutions based on blockchain technology might offer the next “killer” use case to draw in millions of new users. According to Maaza, the Cardano Foundation feels that Web3 is currently missing a “killer, scalable use case” that applies to both individuals and companies:
“One of the views that we have at the foundation is that digital identity for people, products, data, and documents, is one of these killer applications that can scale.”
Instead of requiring sensitive personal information, Web3 decentralized IDs are privacy-focused solutions that let users submit only the bare minimum of information needed for authentication.
Since identities are stored locally in users’ crypto wallets, decentralized ID users can also withdraw their information via seed phrases, becoming progressively more significant privacy-preserving solutions.
Blockchain needs a non-speculative use case to draw in the following billion users
Retail investors seeking to make money through price speculation are primarily to blame for the buzz around cryptocurrencies. But to draw in general users, blockchain technology will require a non-speculative use case, as Maaza went on to explain:
“I believe a killer use case where you’re talking about millions and billions of people, things represented on-chain, that are not speculative in nature, is what will bring this kind of technology to the forefront.”
According to Justin Hyun, director of investments at Ton Foundation, onboarding the following 500 million users would necessitate the usage of straightforward apps with “actual usability,” such as Telegram mini apps powered by blockchain technology that may serve as a “Trojan horse” for widespread blockchain adoption.
Hyun stated that to onboard half a billion users, it would also be essential to abstract complexity away from people:
“Bringing 500 million people on-chain by 2028 — which is our goal — is going to require use cases that interact with the blockchain without the user knowing that in the front end.”
Decentralized IDs might protect businesses against hacks.
Even though most businesses don’t make money from implementing decentralized ID solutions, doing so could save a lot of money by preventing possible data breaches.
Maaza stated that some companies that collect data value digital identities.
“For many other businesses, it’s a cost center. You have to protect customer data. And when that gets breached, that incurs large amounts of damage control.”
Many blockchain networks, including Cardano, are creating their own non-custodial digital identity wallets.
Even though the technology paradigm is still developing, some nations have begun investigating decentralized identity systems. For example, to improve data privacy, Istanbul is utilizing Omchain’s proof-of-identity (PoI), a decentralized identification system that functions without requiring database queries for verification.