Use Cases of Blockchain Tokens
Proves Authenticity
Allows your customers to know the product is authentic by validating on the blockchain.
Example (no digital wallet):
- WineCo manufactures and applies blockchain label #1 to wine bottle.
- WineCo sell one bottle to Joe. Joe wishes to have his name listed on the public blockchain, but does not yet have a digital wallet.
- WineCo emails BuyLabel.ca Joe’s name along with his label number (1).
- ca updates the blockchain ledger with the name Joe next to WineCo Token#1.
- Joe can use public online blockchain tools and the QR code to view his name next to WineCo Token#1.
Key Takeaway: For those who don’t yet have a digital wallet, they are still able to save their name directly onto the blockchain.
Example (with digital wallet):
- WineCo manufactures and applies blockchain label #1 to wine bottle.
- WineCo sell one bottle to Joe.
- Joe provides his public digital wallet address to WineCo.
- WineCo emails BuyLabel.ca Joe’s wallet address in addition to the label number (1) that belongs to Joe.
- ca transferred ownership of WineCo’s Token #1 to Joe on the blockchain ledger.
- Joe can query the public blockchain and see that his wallet address is in fact the owner of WineCo Token#1. In addition, Joe can query the total quantity of Token #1 is one, meaning there is only one copy of the token.
Key Takeaway: There are two copies of a product, one is authentic and the second is a counterfeit. The blockchain ledger lets us know who the owner is.
Adds Product Metadata
In addition to being a unique identification number, you can encode additional product information. Examples of metadata include: product description, ingredients, materials, manufacturing date, origin, or whatever other data you feel is relevant.
Example:
- WineCo manufactures some of the highest quality product and has a strong loyal customer base. They already have a website which contains information about their products. However certain product details change over time as the website gets updated over the years.
- Joe has been a collector of WineCo for several years and wants an immutable record to be stored digitally containing details of a particular bottle of wine. This data record should be created at the time the bottle was manufactured, and saved in a digital ledger that cannot be modified after written, and resilient from ever going offline.
- WineCo applies a Blockchain Token label to each of its bottles. WineCo provides BuyLabel.ca with the metadata that should be connected to each product. The metadata can be identical or vary per unit. Even a digital image can be added.
- ca digitally connects the metadata to the Blockchain tokens then uploads it to the blockchain for permanent storage.
- Joe searches his token on the blockchain and can view this metadata associated with his individual bottle.
Key Takeaway: Informational pamphlets, websites, product packaging are all great sources of information. However, over time they get lost or get overwritten. In some cases, the validity may be questioned. Did anyone change the data to their benefit? Information placed onto the blockchain cannot be modified giving it lasting trust.
Digital Presence
Bringing your product onto the blockchain is not the same as listing your products onto a digital platform like Amazon. Your products on the blockchain are owned by you, while your product listings on Amazon are owned Amazon. More importantly, being on the blockchain has many more (and different) use cases beyond e-commerce (ie. Selling goods).
We want to give consumers the ability to audit and list what they own online. There is no recurring cost to the owners in this approach, and last forever. At no point can a company come along and delist you. There is no bounds on what can be added to the blockchain, but some popular items are things like baseball cards and pieces of artwork. There is a wide range of why someone may want to list what they own online:
- Selling Online / E-Commerce – one popular online marketplace (OpenSea.io) saw about $5 billion (USD) of transactions in the single month (January 2022, https://dune.xyz/rchen8/opensea).
- Creating a Public Records – there are collectors that simply want a digital identity of what they own, with no intention in selling it.
- Proof to Banks and other Institutions – This is not yet mainstream, but soon, institutions such as an insurance company can provide services dependent on what one owns. They want to see something issued by a manufacturer, which proves ownership.
- Exclusive Access – another trend is to allow token owners access to private events, venues, access to the founders, private chatrooms, free giveaways, and other exclusive access to the most loyal customer base.
- Flaunting – quite simply, some people just want to show off what they own to their friends.
Allowing individual consumers to bring their valued physical goods into the digital world ultimately increases the value of the product because of these additional use cases. The blockchain is not solely for e-commerce, but has other attributes like providing ownership. It does so in a way that owners maintain control, and not subject to the corporate policies of Amazon, Bing and others. For example, when you sell something on Amazon, they act as an intermediate and charge a lofty commission. There are no recurring fees or commissions for what you own on the blockchain. These are some of the reasons companies like Nike are turning to the blockchain to build out their brand.
Ability to Transfer Ownership
A popular software features native to this token standard is the ability to transfer ownership.
Example (requires digital wallet):
- WineCo manufactures and applies blockchain label #1 to wine bottle.
- WineCo sell one bottle to Joe.
- Joe provides his public digital wallet address to WineCo.
- WineCo emails BuyLabel.ca Joe’s wallet address in addition to the label number (1) that belongs to Joe.
- ca transferred ownership of WineCo’s Token #1 to Joe on the blockchain ledger. BuyLabel.ca no longer has any permission or access to Token #1.
- Joe decides to sell his bottle of wine to Michael. Joe can use his digital wallet or any other public tool to interact with the blockchain. Joe uses the QR code printed on the label, in combination with his digital wallet and transfers ownership of WineCo’s Token#1 to Michael.
- Michael is now the new owner as per the global blockchain ledger. Joe is no longer able to execute the transfer function.
Key Takeaway: Each token on its own has a built-in software function that allows it to be safely and securely transferred between digital wallets. This is not a nice-to-have, but a must-have. The mechanism has to follow a strict standard. Imagine two individuals who do not know each other. The sender needs to communicate in a predefined manner to the receiver without any third-party assisting the transaction.