New trend in blockchain: Will identity verification become a killer application?

Source: Blockchain Knight

Over the past two years, Crypto asset developers and venture capital have been overly focused on supporting infrastructure projects and neglecting consumer-facing applications.

Looking around the Crypto asset industry, there are a lot of tools for developers to integrate privacy features, decentralize information, and expand platforms, but there is a lack of applications that can use these tools.

Blockchain may provide a solution to this problem.

And Crypto assets and underlying blockchain technology have the potential to completely change the way the Internet and reality interact.

In particular, blockchain as an identity verification tool can solve the growing crisis in the consumer goods market and provide an unchangeable source of truth for verifying information.

In this area, more people need this integration with the physical world, which can be called "non-fungible tokens" (NFTs).

The collapse of the NFT market and the failure of the metaverse, coupled with the advent of the Crypto asset winter, has caused many developers to retreat from consumer-facing applications and focus on improving decentralized infrastructure.

That same year, media coverage of FTX’s bankruptcy severely damaged the industry’s reputation.

Perhaps it wasn’t the right time to attract mainstream users, while developers focused on solving problems such as scalability, user experience, and security.

Now, these aspects have improved.

Zero-knowledge (ZK) Rollups have improved the speed and efficiency of the first-layer protocol, account abstraction has achieved a Web2-like user experience, and hacking incidents have decreased from the first quarter to the second quarter of this year.

This year, BTC and Ethereum ETFs were approved, stablecoins and real-world asset tokenization received mainstream attention, and BTC prices reached an all-time high.

For decentralized application builders, now is the best time to expand their business to Web2 users and enterprises.

Just need to prove that blockchain is more than just a platform for speculative assets.

As a transparent and immutable source of truth, blockchain can be used as an information verification tool for the digital and physical worlds.

This year, the second-hand clothing market alone is worth about $230 million, while the second-hand collectibles market is valued at $134 billion.

As the second-hand goods industry grows, from Ebay to Depop, TheRealReal, and more, opportunities for counterfeiting are expected to grow.

In fact, the counterfeit goods market is expected to be worth nearly $2 trillion by the end of this decade.

Imagine if there was an on-chain authentication solution that could verify the origin of goods. This would bring unprecedented opportunities for the integration of blockchain in the fashion and luxury markets.

In the digital realm, the development of decentralized finance (DeFi) means that more and more people are beginning to trade assets without centralized players.

While privacy is a core value of DeFi, an identity verification method is also needed to prevent fraud. Blockchain identity verification tools can be used here again.

Blockchain and artificial intelligence can be combined to improve verification methods.

Currently, identity verification is done by individuals. But AI can enable image and pattern recognition and object detection on a much larger scale. Blockchain can be used to store information collected by AI tools to provide a secure record.

NFIs bring real-world practicality to NFT technology.

NFIs can be used as a strong authentication tool by crypto-linking physical assets to their “digital twins” on the blockchain.

For example, if a user were to make a luxury watch, a private Crypto key could be embedded that could be used to verify the watch’s provenance to prevent it from entering the secondary market.

Why would brands invest in this technology?

Because it brings greater value to the asset if the buyer can guarantee a return on the secondary market. This isn’t limited to watches, either; shoes, jewelry, and collectibles can all be verified on-chain.

As a result, fashion and luxury brands haven’t completely given up on NFTs.

9dcc’s NFT-linked fashion collection debuted at this year’s Paris Fashion Week, with designs inspired by digital innovation.

Younger generations are also more concerned about the environmental impact of manufacturing. Seeing brands embrace the circular economy through blockchain authentication can be a big boon to their marketing.

For too long, developers in the Crypto asset industry have been looking inward, focusing on issues that are not relevant to the average person.

The industry is maturing and we need to embrace use cases outside of finance.

Authentication is the main area where blockchain can provide a better solution than existing technologies. The winter of Crypto assets is over, and now it’s time to call back the average person.