Hey world!
This is my first blog, and I am very excited about it, as, it has always been a dream of mine. Today, I indent to do my best, to put forth, what I was able to learn and understand, about BLOCKCHAIN technology, in the simplest way possible.
This cutting edge technology is still in its infancy. However, its popularity is increasing, as, more practical applications are being introduced, into various, commercial sectors, due to the relatively low cost of implementation. I would try to touch upon a few of those applications in this blog.
The reason why, I chose this topic, is because, I came across the word, Blockchain, a few months ago, while I was searching, something on the internet, and as usual, I looked up about it, and got really interested in the concept. But what really intrigued me, was the multifaceted nature of the technology.
I misunderstood the true propose of the concept in the beginning, because, I thought, it’s just a medium of digital value exchange, or simply the technology behind the Cryptocurrency, Bitcoin. But, I finally realized that I was wrong and, there is more to it, than meets the eye!
This blog is a product of only a couple of month’s research on the internet. Therefore, I do not venture to assess the technology behind Blockchain, in-depth. I am just a common, tech savvy, person, and all I wish, is to convey my knowledge, in the basic concept, and applicability, of the technology, to anybody, who reads this blog, without too much technical jargon.
Misconceptions
OK, let me give to you straight, Blockchain is NOT BITCOIN. I stressed that part, because it’s vital to understanding the concept of Blockchain. It is NOT a Digital Currency, it is NOT a software, it is NOT a Plug and Play device, it is NOT a Browser, or a Website, etc. Understanding the concept behind the technology is more important than the technology itself.
The term Blockchain, got its reputation, as the underlying technology, of the Digital Currency, Bitcoin. Because, it was how it got introduced, through a Whitepaper, in 2008 by a person or a group called Satoshi Nakamoto, making them both, an inseparable entity.
Digital currencies are not a new thing, but what attracted most people towards Bitcoin, were, its ability to function through Blockchain, which is a consensus based global network of computers, that coherently, validates and manages a public database, in order to facilitate, the decentralized, transfer of any information, from one source to another, securely and independently.
I know the it is really a mouthful, therefore, let me explain it separately.
Blockchain:
It is a system with which one individual or Business can send and request any digitally transmittable asset or information, through a peer-to-peer network of computers known as Nodes.
The nodes, can be run by a person or a group, and every node will have a copy of an electronic ledger, which has the complete history, of all the previous events through the network, think of it as a lifetime statement of your bank account, but only this one, contains everyone’s transaction history, hence, everyone knows what everyone’s got!. It is this, distributed and transparent nature of the system what makes it unique and impregnable.
The information transmitted through the network, is collectively known as Blocks, and each blocks are encrypted by a very complex and sophisticated algorithm called Hash Key. This encryption method is the backbone of the system, and each blocks are irreversibly locked with the previous and the future block, with a cryptographic key, which is like a digital signature, that timestamps each event on the network, therefore making it practically impossible to alter the information in a single block without, changing the whole chain of block, which is an immensely, resource intensive task, therefore, practically impossible.
The consensus nature of the system, encourages everyone using it, to constantly upgrade their ledger, to keep their chain of blocks active and current. The most accurate chain, attracts more, more blocks, which means more robust network. The chain of blocks is what define the functionality of the technology, hence the name, Blockchain.
Cryptocurrency or Bitcoin:
When a block appears in the network, first, it will be in an unconfirmed stage, and there could be multiple blocks like this, and similarly, there would be many nodes, in the network, looking for a valid block. The Rule of Majority is applied, when it comes to adding the block to a chain of nodes, the most current and valid network, get the first block of transaction.
Among the candidacy of nodes, one would pick a valid block, and using its superior computational power, solves a proof of work, which allows the node to access the block and validate it. Once a block is validated, it will be added to the ledger, and all the nodes in the network will update their ledgers, to keep the network alive.
The people who run the nodes are collectively known as Miners, and each miner is investing his/her, electricity and computer hardware to solve the proof of work, therefore, in order to incentivize this task, the first miner to add a block to the ledger, is rewarded a certain amount of Bitcoin.
The people who saw, the viability to commercialize, bitcoin, started investing into more powerful computer system, to crack more bitcoin, and when the inventors, noticed this trend they, started to gradually reduce the block fee, to stop this frenzy, and placed, a hard cap for total number of bitcoin, that will ever be issued, to 21 million.
What’s started as a token of appreciation has turned into a massive medium of value exchange, which by now had made billions of dollars worth transactions worldwide. It is this overwhelming popularity of the currency, what dwarfed the technology behind it, that is one of the main reason why most people wrongfully think, that bitcoin is blockchain.
Why Blockchain?
Blockchain presents itself as a choice, between two systems, that is, parallel to each other, one is centralized, and the other is decentralized, one is present and the other is future.
Characteristics:
A. Distributed Network – Less vulnerable to hacking
B. Transactions are irreversible – Easy Audit Trail
C. Confirmation by Rule of Majority – Hence, Secure
D. Programmable transactions – You can add your own Metadata
E. Transactions are pseudonymous – Distributed & Publicly available, yet Anonymous.
To better understand it, let’s split the use case scenario into two.
Business & Personal Uses
Business:
IT (Information Technology) Infrastructure, plays an inevitable part in the smooth functioning of today’s businesses. Cloud Computing, Business Automation, Data Analysis, Server Management, and above all Business transactions, the list could go on and on, these pivotal service industries are controlled by only a handful of giant corporations, and they have tens of thousands of substitutes all across the glob.
Blockchain, with their simple and rudimentary, working principle, can be applied to any existing centralized system, and streamline, its functionality, by getting rid of the ‘Middle Man’.
Companies can run their own internal nodes, to ensure safety and efficiency of their business activities, and since Blockchain is build bottom up, as a Security Architecture, there is no need to seek the help from an external service provider. The distributed ledger system, makes, tracking of any events in the daily business activities, effortless.
IBM and shipping giant Maersk have developed, a blockchain-based shipping solution called TradeLens, which provides a mechanism for tracking goods from factory or field to delivery.
“The product provides a way to digitize every step of the global trade workflow, transforming it into a real-time communication and visual data sharing tool.”
Marie Wieck, GM for IBM
Some of the notable developments in Blockchain on industrial level:
IBM – The computer giant has open-sourced the widely used Hyperledger Fabric and is a driving force behind multiple blockchain initiatives.
Intel Corporations – Since contributing blockchain platform Sawtooth to the Hyperledger consortium, the computer giant has focused on how hardware can help blockchain.
Facebook – The CEO of the largest Social Media platform, Mark Zuckerberg, has explained his company plans to explore blockchain in a number of use cases.
Oracle – One of the leading computer technology corporation, has been preparing to launch its own enterprise blockchain platform.
Personal:
There are many application for Blockchain on consumer level, a few of them are;
Healthcare – Medical industry has always been accused, of being terrible, in terms of record keeping, and security, blockchain can solve the issue, by introducing a Universal Record of Patients, which is easily accessible and secure.
Pfizer – This pharmaceutical giant is in the early stages of a project with Chronicled, a blockchain startup for supply chains.
Finance – As this industry is the forerunner, of this revolutionary technology, there has been considerable amount of, researches done worldwide to see new ways to apply Blockchain technology in the field, as a result, some of the major corporations have already invested hugely in this technology.
Although, there are over a 1000, verities of Cryptocurrencies, are available in the market, only a handful of them are relevant. You can create a cryptocurrency Wallet, as simple as creating a Facebook account.
Goldman Sachs – The bank has plans to open its own bitcoin trading desk.
SberBank Russia – The bank has launched a blockchain lab in 2017 and is working with Russia’s securities depository to explore blockchain corporate bonds.
Mitsubishi UFJ Financial Group – MUFJ joined the Ripple payments network in 2017, and plans to co-launch its own blockchain solution next year.
Data security – Personal Data is dubbed to be the future Gold, and there is a reason behind it. The Internet is one big market place, and there is everything for everyone here, this condition have been greatly exploited by big firms, by purchasing huge amounts of Pii (Personally identifiable information) for the purpose of target marketing, product engineering.
Personal data must be treated as any other personal asset, and must have a title of ownership, blockchains can effortlessly demystify this great problem, and help governments bring up with a Virtual Permanent ID, for every citizen of its country.
The question is not why blockchain?, but why not blockchain, if there is a single shot solution for security, reliability, and efficiency, if there is a system that is not tied up to any central authority, and can perform perfectly independently on various platforms, if there is a service that people can access, without virtually losing their cognitive identity, why wouldn’t people use it?.
The Challenges
Fundamental and value added, practical applications of the technology is the best way to educate people about this wonderful concept. A lot of initiatives have already been taken to this direction, but still more compatible platforms, like Android, can help more future enthusiasts to embark the journey.
Ethereum Project: This project has already helped many businesses to, build their Blockchain based software, on their platform. Founded by young visionary Vitalik Buterin, who created this platform when he was only 17 years old.
“As society becomes more and more complex, cheating will in many ways become progressively easier and easier to do and harder to police or even understand.”
– Vitalik Buterin
Conclusion
It’s only a matter of dare, if there are enough people who dare to take the initiative to use blockchain, and its substituent products, and educate the people in their community circle, they not only will help expand the Blockchain network, but also be able root themselves in the concept more deeply.
Changes don’t happen overnight, it evolves over time, and a lot of work goes into that. Everyone can enjoy the fruit of innovation, irrespective of their contribution towards its growth, provided, the environment is not destroyed intentionally.
Thanks,
offtofuture 