Jeremy Epstein lays out how blockchain technologies can be utilized in two great, simple examples. In the first example, he shows how a smart contracts could be used for a SEO marketer:
In a smart contract, we set up the rule that says, “if the result for search term ‘blockchain marketing,’ goes to Never Stop Marketing on May 21, then pay Sandy 2 Bitcoin. If not, only pay .5 BTC”
We might agree that we will use the .json feed from Google (called an “oracle”) to serve as the arbiter and then, we would both sign it with our unique cryptographic signatures.
I would put the 2 BTC into an escrow account for payment.
Then, we let it run.
On the prescribed date, the contract queries Google, sees the result and the appropriate amount is released immediately (or not, if it fails). Either way, the contract is recorded in a blockchain and open to verification (here’s one I ran).
Done, basically no friction or time delay. The provider of the service, in this case, SmartContract gets a transaction fee of .0001 BTC.
And in his second example, he shows how a decentralized rideshare app could help users capture the value created by usage:
Riders need Zoozs in order to pay for rides. Drivers accept Zoozs in return for rides.
As there is a finite number of Zoozs-or a predictable inflation to it based on the protocol rules- (though they are digital so they can be cost-effectively sliced into multiple decimals), the value of each Zooz increases as the demand for them increases.
Let’s think of it this way and keep it very simple.
There are 100 Zoozs out there.
Each one is worth $1.
There are 100 network participants. 50 drivers and 50 riders.
Each ride costs 1 Zooz.
As word gets around that La’Zooz is cheaper than Uber, more people want Zoozs. So they trade their dollars or Bitcoins for Zoozs which increases the price of a Zooz to $2. So now, everyone who has a Zooz has $2 worth of value instead of $1.
The purchasing power has doubled, so you can afford 2 rides for 1 Zooz instead of 1. So you sell half a Zooz to someone who needs one, keeps the Zooz you want for buying rides and get the profit from the other one.
The drivers who were charging 1 Zooz now see the value of the ride they gave in the past go from $1 to $2 (retroactively) and are more inclined to accept Zoozs because they expect more people to join the network. In effect, by taking these tokens, you are getting value today AND getting value in the future.
Instead of Uber capturing the value that accrues, the owners of the network (the token holders) capture the value. Whoa!