In this article, we are trying to explain in detail about Blockchain technology, Cryptocurrency, Crypto Mining, Quantum Computing for Blockchain, and some use cases of Blockchain in the business world.
How blockchain has evolved?
Blockchain going through many advancements over the past two years. The technical way of describing blockchain is it’s a shared database, units distributed, there are multiple participants on a network, there all see the same information at the same time and typically there are also able to share processes as well. If you get into things like cryptography and how that’s providing irrefutable proofs of what is happening on the platform, but all of this is kind of like describing the internet as TCP IP and routers.
What blockchain is really what it enables?
Blockchain comes with three things. Firstly, what blockchain really provides is a way of minimizing mistrust and as a result, minimizing inefficiency. For example, if you think about any typical business interaction whether that’s between you and someone in your personal life or companies working together, typically that business interaction requires a trusted third party sitting in the middle to guarantee that the business outcome that both of these parties are looking to achieve is actually achieved and one party is not left shorts versus what they actually thought they were going to be doing. In a normal scenario, you have lots of intermediaries in many cases but the world blockchain provides a way of Codifying that trust. So, two participants or 2 entities who don’t necessarily know each other or are not actually fully aligned can insert into that business relationship without having to rely on that trusted party. This is really what we’re seeing being the most impactful part of a blockchain is bringing.
The second thing related to that is what blockchain enables through things called smart contracts. Smart contracts are for assets to move over this technology, quite like we can send e-mail to each other and share information through blockchain. It allows you to transfer value from one party to another in real-time not the need for those intermediaries and automatically. You can program the conditions on which these assets should be transferred, and what drops out of these two sorts of characteristics that trust minimized. The nature of blockchain and the ability to transfer assets is this idea that we can now create new economies very simply.
If you think back to the early 90s when the web first started being popularized, people were suddenly able to create blog posts or websites very cheaply and very easily. That bought the whole cost of publishing a newspaper down to almost zero. What blockchain provides is the ability to now create digital assets and with these digital assets come marketplaces, come exchanges create communities. It is powerful to create the entire economy through this technology.
Difference between blockchain and Crypto Currency?
Blockchain very simply is an underlying technology that really enables cryptocurrencies to exist. Now you can have blockchain solutions that don’t require a cryptocurrency and many of our enterprise blockchain solutions are exactly that we don’t need cryptocurrencies to have those networks working. but when you think about what a cryptocurrency is, which is really an asset that is being issued by software as opposed to an essential intermediary or essential central bank or government then you do actually need something that guarantees that all of the assets in this network are being accounted for correctly there being updated correctly the ownership of those assets is being updated correctly and the tools would actually enable that in these very decentralized economies is a blockchain so that’s roughly the way to think about in the blockchain versus crypto.
What is Cryptocurrency mining?
Mining is the process of really generating new Bitcoin or knew ether in the Ethereum ecosystem and the reason why this happens is that if a public blockchain environment and a fully Open Access system that doesn’t require KYC or any sort of identification to join that network. What that means is, you can have malicious actors known as hackers or otherwise who are also on the network and they’re trying to do nefarious things like corrupt the underlying legend and so it’s actually very important to ensure that whoever is adding information to the blockchain is doing so in a way that is not going to cause the underlying blockchain to no longer makes sense. The way to do that is to make it very hard to add data to a blockchain. If anyone could update the ownership of everyone’s balances very easily then basically it doesn’t necessarily mean anything.
So the underlying sort of design of these systems is to make it very hard to add more information into these blockchains and the way to do that the way to make this hard is by asking people who are trying to add information to solve a puzzle or some sort of mathematical problem that rarely can only be solved by cycling through a whole lot of random guesses many times over literally millions and millions of times over and randomly somewhere along the line someone will actually find that missing number and when they find this they will be able to add a set of transactions which are typically collated into a block to the network and for their efforts actually spending all of this computational power to find this missing number, they are rewarded with the cryptocurrency on the network Bitcoin or Ethereum or whatever another platform is that process is being rewarded is called mining.
Some governments provide very attractive offers for cheaper and clean energy sources to mine to avoid the impact of high combustion of energy to run these machines. We need to develop green energy resources to run these machines efficiently.
How blockchain technology has evolved over the last few years?
There are a few advancements on the technological side. Firstly, the number of underlying blockchain platforms has increased right a few years ago, Bitcoin and Ethereum were the primary ones. there were a few others as well but in the last year or two, we’ve seen a number of others that are often referred to as their one solution. The base layer blockchain comes to market and what this is done is created more competition and more choice right for people who are building blockchain applications for users who are looking to interact with these different products there is now more choice.
The other thing that’s happened is there are some complimentary advances in different technologies. some of these original blockchain platforms that are still on the path to reaching that scale or higher throughput that they originally set out to do we are now seeing what is referred to as layer two solutions being built on top of them. So, sometimes these blockchains that are running on top of these underlying blockchain platforms and they ended up themselves are providing the higher throughout which the cheaper fees the greater scale.
One of the key technologies that are enabled is something called zero-knowledge proofs. Zero-knowledge proofs are enabling transactions to be bundled together and aggregated but added to the underlying blockchain in a way that you can still have guarantees that this is the actual transaction with system transactions that took place.
Beyond the technological advances, there have also been other important things that have taken place. For example, there’s been a lot of regulatory advancements that have enabled. New applications are to be created in some jurisdictions in the US and some countries in Europe you can now record the ownership always security on a blockchain. and what that has led to is more experimentation around issuing securities on public blockchains. But we’re also seeing advancement in the market infrastructure both on the crypto side and on the enterprise side.
For example, we’ve seen maybe more of traditional financial services feel in that you can get regular way algorithms that allow you to execute trades algorithmically so that you’re not moving the market we’re seeing new products come to market recently we had Bitcoin futures ETF’s being launched in EU we’ve had actual Bitcoin ETF’s in Canada and other countries and we’re also seeing a lot of funding coming in right actually. There’s about 380% increase in funding over the last year in blockchain solutions alone and 80 out of the top 100 public companies are using blockchain today and about a third of those in using blockchain in production. So, we’re seeing a real advancement not only in terms of the types of products that are being offered but also in the ways that people are deploying their capital and starting to advance the infrastructure itself.
What quantum computing means for the blockchain?
There is a competency change in the security of the cryptography that blockchain relies on. Pretty much everything in blockchain relies on cryptography so whether you are signing a message using digital signatures or creating some sort of hash, all these things ultimately could potentially be broken if we reach quantum supremacy. This is an important thing for the blockchain community to be aware of there are also projects underway to create quantum-resistant cryptography and ultimately blockchain is probably the last of our concerns if we do reach quantum supremacy, but it certainly isn’t their concern for us.
What we’ve seen is that to succeed in building a solution you really need to be laser-focused tightly scope the idea that you want to take to market and throw out everything that doesn’t need to be there on day one. This has helped us greatly in terms of not only defining the technological solution but also the legal boundaries in which that solution is to operate. So being laser focus has been more important than we thought about how to lower the barriers to entry to using blockchain. This is a new technology still and not every legacy system can be upgraded at once and so the way that we’ve rolled out our platforms is to provide a solution that can be used independently of those negative systems at least initially. Then over time start to integrate them into your legacy platforms but we found that starting with integration is the barrier is too high to get there.
Finally, something a little bit contradictory for blockchain which is a very collaborative technology is to start small keep the participants at small keeper focused on motivated actors who really want to push the envelope and really want to move forward with speed, and once you have the solution that a small number of participants can actually bring to market what we’ve seen is that actually starts to create somewhat of a snowball effect and others will join.
In the early days of the interbank information, the network now links there was a focus to say blockchain wasn’t well suited necessarily for the conducting of the transaction because it might be welcome real-time requirements or things like that so instead we focused on all of the information surrounding the transaction so things like reconciliation or other things like that but it sounds like that thinking is involved a little bit and we are using blockchain more correctional transactions.
What are other industries thinking about blockchain?
One of the areas in that blockchain is most applicable to global trade or supply chains. If you think about that part of the global economy, you have very desperate access geographically dispersed and diverse, you have very manual paper-based processes, not a lot of very trusted relationships necessary and so here blockchain can provide a real tool to solve a lot of the challenges that exist in global trade. It can provide automation and it can provide a shared infrastructure. This is obviously very challenging in something like a Supply chain, but we have seen real progress from several different entities who have pronounced solutions to tackle everything from improving the way that soybeans are shipped globally to ensuring that gold is responsibly sourced by tracking it from the mine all the way to the refinery ultimately all the way to the jeweler so the end consumer.
Through these, the customer can see where this gold is come from, and we know all the checkpoints that have gone through along the way, and we have more confidence that we are buying the goods that we want to buy. There’s been a lot of use cases around food safety. If there was a bad batch of spoiled vegetables or whatever it is, we can track back to the source of where it is, and you can sort of doing things like that it feels like the use cases that space is endless.
For example, in pharmaceuticals, to prevent counterfeit drugs from coming into the supply chain so again being able to track right from the source whether the actual medicines are being manufactured and how they are moved through the various parties in that supply chain ultimately to drugstores. That’s being a very important area where there’s been a lot of very dangerous things to have counts for drugs comes to the system. So, the use cases are seemingly endless, but the important thing is that over the past few years we’ve seen them come to reality.
What will happen to Blockchain in the next 3 to 5 years?
What excites you most about the future Chain using order referred to as non-fungible tokens (NFT) and more than just showing the provenance that this item has come from the artist that you think it has, what energies have created is an entirely new way for brands to engage with consumers. This gives brands an option to say, “hey we can create a new experience for you”, we can create new ways for you to interact with us we can reward you in new ways and we’re seeing communities develop around these NFT projects and we’re just seeing the beginnings of what is going to be a very big industry around entities.
The other thing we need to be very focused on that is Digital Identity. This is really the missing piece for open blockchains we think that with digital identity and specifically something called self-sovereign identity, where you as a regular way person in the world can have more control over your own data. Your own information and provided information in a trusted way such that whoever you send your name and address to can verify that in real-time without the reliance on some other party to say Yes.
This idea of providing stronger guarantees around their density and removing these big honeypots of data is something that’s going to be very big going forward. The visual identity is going to be the one that a lot of people are going to see as being the real key to unlocking a lot of this activity and this foundational just got everything we do right. A lot of people now realize how important it really is to so many different innovations across exactly.
