Posts Tagged ‘blockchain training’

Blockchain As An Application Platform

May 8th, 2018

Many business use cases can be improved and/or solved by using distributed ledger technology. It can be used in many cases where trust services are needed by business applications. This can be utilized by using blockchain technology as an application platform to build the underlying trust infrastructure of the system.

Although Bitcoin, the first real implementation of blockchain, is a decentralized currency and payment system, the underlying constructs that form the basis of the system do not have to be limited to payment transactions, accounts, balances or users. Instead, blockchain technology in Bitcoin is nothing more than transactions secured and executed by a scripting language using cryptographic methods. This means that blockchain is a platform with a scripting language that can solve many use cases other than just cryptocurrencies.

This property of blockchain led to smart contracts, an innovation presented by the cryptocurrency known as Ethereum. In the case of Ethereum, developers can create private cryptocurrencies and contract-based applications using a Turing-complete language, which allows businesses to use this language to set their own rules and policies in such applications.

The distributed ledger technology used in blockchain offers multiple benefits to businesses that make a difference when implementing a solution that requires a high degree of trust for business transactions. Using the technology offers the possibility to reduce costs and offers the opportunity for businesses to build and maintain an infrastructure that delivers capabilities at lower expenses than traditional centralized models.

Blockchain can process transactions faster because it doesn’t use a centralized infrastructure. Although there is no system totally secure from cyber attacks, the distributed nature of blockchain provides an unprecedented level of trust. The unchangeable property of blockchain and its public availability among its users, whether in a public ledger or a private one, provides transparency. Any user of the system can query transactions on a real-time basis.

Bitcoin was the first implementation of a cryptocurrency based on distributed ledger technology. It was invented in 2009. and since then, it has been gaining popularity and traction by business owners seeking a distributed trust model. The Bitcoin consensus algorithm is based on proof of work (PoW). In PoW, transactions are collected into blocks by miners and added to the blockchain only if the miner can solve a cryptographic challenge that requires much computational power to be solved. The cryptographic challenge can only be solved by guessing, ensuring neutrality.

Other forms of proofs have been invented and incorporated into other solutions, such as the proof of stake in Ethereum and proof of elapsed time introduced by Intel.

Bitcoin and blockchain solved a very old digital currency problem that many other digital currencies tried to solve in the past known as the double spending problem. Double spending means spending the same digital currency twice, and Bitcoin solved this by ensuring distributed consensus.

Another cryptocurrency benefit that blockchain technology provides is that transfers can cross national boundaries in seconds, with minimum fees, and without going through third-party entities such as banks.

The U.S. government and Venezuela are currently investing in resources dedicated to research and to create their own cryptocurrencies tailored to their specific needs. Despite the vast success of Bitcoin and other altcoins, the shortcomings in the design have limited the global adoption and expansion of cryptocurrencies. The expansion of cryptocurrency use will require overcoming governmental requirements and concerns, such as protecting against money laundering, illicit trades, volatile value and the lack of recognition by trusted parties.

Blockchain For Digital Identity

The need for a single centralized source of truth about identities is becoming a necessity in every community and corporation. Imagine a decentralized digital identity system, a source of truth where every single data element, such as user attributes and credentials, are included in the system only by distributed consensus.

This model is the focus of many enterprises, including Microsoft and IBM. Users get more control over their identity as they can share it only with trusted parties. No single centralized entity can tamper with user identities or data.

For users, this model improves accessibility, privacy of their data and control over their personal data. For enterprises, this model reduces identity management cost, eases the monitoring process, and improves customer service and efficiency.

Blockchain For Real Estate

Smart contracts in blockchain are little programs that execute if certain criteria are met. Smart contracts were invented in the 90s by Nick Szabo. They were integrated into blockchain technology and cryptocurrencies by Ethereum. In a smart contract, parties can agree on a sequence of conditional execution paths based on events. This idea led to the use of blockchain within industries such as real estate. Actually, smart contracts can work for any system that involves a contract between a seller and a buyer.

In the real estate industry, dealing with properties involves several parties and individuals, including owners, lenders, investors and service providers. The transactions between these entities can be problematic with the existing traditional centralized systems. This difficulty comes from many factors, including a lack of trust among peers, fraud and deficiency of a single source of truth about real estate and its history. Blockchain technology offers the possibility to have a real estate system with a very efficient search engine and lookup source for the current properties on sale.

Conclusion

As you can see, blockchain technology offers plenty of opportunities for various applications. And as the technology continues to progress, its applicability will only continue to broaden.

 

Source: All the above opinions are personal perspective on the basis of information provided by Forbes and contributor Forbes Technology Council.

https://www.forbes.com/sites/forbestechcouncil/2018/05/07/blockchain-as-an-application-platform/#1fdac4a55576

What Is Blockchain And What Can Businesses Benefit From It?

April 9th, 2018

It seems the blockchain revolution is in full swing. Over the course of a one-year period, Google search requests for the keyword “blockchain” have increased by 250%. The U.S. Senate recently had a public discussion about the blockchain’s most prominent application, cryptocurrency. And several public entities have added “blockchain” to their company name. So what’s all the hype about? What is blockchain and how will businesses benefit from it?

What is a blockchain?

In simple terms, a blockchain can be described as an append-only transaction ledger. What that means is that the ledger can be written onto with new information, but the previous information, stored in blocks, cannot be edited, adjusted or changed. This is accomplished by using cryptography to link the contents of the newly added block with each block before it, such that any change to the contents of a previous block in the chain would invalidate the data in all blocks after it.

Blockchains are consensus-driven. A large number of computers are connected to the network, and to reduce the ability for an attacker to maliciously add transactions on the network, those adding to the blockchain must compete to solve a mathematical proof. The results are shared with all other computers on the network. The computers, or nodes, connected to this network must agree on the solution, hence the term “consensus.”

This also makes the work of appending data to the ledger decentralized. That is, no single entity can take control of the information on the blockchain. Therefore, we need not trust a single entity since we rely on agreement by many entities instead. The beauty of this construct is that the transactions recorded in the chain can be publicly published and verified, such that anyone can view the contents of the blockchain and verify that events that were recorded into it actually took place.

So to summarize, blockchains are:

  • Transaction ledgers
  • Immutable
  • Consensus-driven
  • Decentralized
  • Trustless (it’s not based on a system of trust)
  • Secured by cryptography
  • Can be made public

 

What businesses benefit?

Prior to the advent of the blockchain, there was no way to secure and validate ownership in a digital asset or verify a transaction in a trustless, public manner. Take, for example, the act of utilizing a software license to gain access to a program like Microsoft Word. To enforce the right to use the software, it must check a centralized server operated by Microsoft. If Microsoft wanted, it could deny access to the software or transfer those permissions to another user. While we consider Microsoft a trusted entity, the risk of illicit behaviour increases when an untrusted party is introduced.

Perhaps a better example is ownership of a more valuable asset, such as a substantial share in a company or valuable digital asset such as a one-off piece of digital artwork. To transfer shares of ownership in a company, the current model requires stacks of paperwork, a lawyer or a centralized and trusted entity, such as the New York Stock Exchange.

What about transferring a digital asset like art? How do you prevent people from copying the digital file and sending many others a copy? If there’s no way to publicly verify the transfer of a single asset to a single entity, then there’s no way to enforce ownership or authenticity. This is why the value in art is always in the physical good.

The blockchain is the first technology that enables the transfer of digital ownership in a decentralized and trustless manner. In fact, there are companies like Polymath that are disrupting the industry by creating digital tokens that can represent ownership in a company, or DAEX, which is seeking to disrupt the world of digital art by publishing ownership on the blockchain.

While technology and supporting platforms around the blockchain ecosystem are sure to evolve, to answer the question of which businesses will initially benefit from its use, are the ones which possess the following traits:

  • Transaction-based
  • Benefits from public scrutiny
  • Benefits from history that can’t be rewritten
  • Decentralization benefits the end user or customer

 

Revolutionary But Limited

It’s easy to get sucked into the hype of one of the fastest-growing new technologies. But it is important to understand that blockchain has its practical limits. It may not be a suitable replacement for where centralization is needed (or at least where there is no added benefit to decentralization) or where transaction malleability is needed.

An example of where I think blockchain may complicate things but not add value to a problem is the case for medical records. Since information privacy is protected by federal regulation, having them accessible to the public may not necessarily be a good thing. The only way to make something like this work would be to encrypt the information, then store the decryption keys on centralized entities to allow other nodes the ability to read the encrypted data. But this would require a few specific parties to be able to read and write the encrypted data. And therefore, a central authority would need to control the licensing of this information to make sure that bad actors do not have the ability to hijack one’s medical records. Also, erroneous information that is added to the chain may be impossible to change.

No doubt, the supporting tech around blockchain will quickly evolve, as will the potential for applications that rely on it. With its growth will come an increase in consumer awareness to its benefits, as well as an equally supportive community. Businesses that believe they might be able to add value by incorporating this technology into their product or service can tap into a growing community of blockchain engineers, be it in a freelance setting or a professional blockchain development agency. As with any nascent industry, talent will initially be scarce, but as the ecosystem develops, the supply should hopefully increase to support it.

 

 

Source: All the above opinions are personal perspective on the basis of information provided by Forbes and contributor Forbes Agency Council.

https://www.forbes.com/sites/forbesagencycouncil/2018/04/05/what-is-blockchain-and-what-can-businesses-benefit-from-it/#624b0d96675f

How Blockchain Will Transform The Supply Chain And Logistics Industry

March 24th, 2018

Managing today’s supply chains—all the links to creating and distributing goods—is extraordinarily complex. Depending on the product, the supply chain can span over hundreds of stages, multiple geographical (international) locations, a multitude of invoices and payments have several individuals and entities involved, and extend over months of time. Due to the complexity and lack of transparency of our current supply chains, there is interest in how block chains might transform the supply chain and logistics industry.

Let’s look at what is broken, how the unique attributes of blockchain could help and look at a few examples of blockchain already impacting supply chains.

How is the supply chain broken?

Our current supply chain is broken in several ways. Over a hundred years ago, supply chains were relatively simple because commerce was local, but they have grown incredibly complex. Throughout the history of supply chains there have been innovations such as the shift to haul freight via trucks rather than rail or the emergence of personal computers in the 1980s that led to dramatic shifts in supply chain management. Since manufacturing has been globalized, and a large portion of it is done in China, our supply chains are heavy with their own complexity.

It’s incredibly difficult for customers or buyers to truly know the value of products because there is a significant lack of transparency in our current system. In a similar way, it’s extremely difficult to investigate supply chains when there is suspicion of illegal or unethical practices. They can also be highly inefficient as vendors and suppliers try to connect the dots on who needs what, when and how.

What is blockchain and how could it help supply chains?

While the most prominent use of blockchain is in the cryptocurrency, Bitcoin, the reality is that blockchain—essentially a distributed, digital ledger—has many applications and can be used for any exchange, agreements/contracts, tracking and, of course, payment. Since every transaction is recorded on a block and across multiple copies of the ledger that are distributed over many nodes (computers), it is highly transparent. It’s also highly secure since every block links to the one before it and after it. There is not one central authority over the blockchain, and it’s extremely efficient and scalable. Ultimately, blockchain can increase the efficiency and transparency of supply chains and positively impact everything from warehousing to delivery to payment. Chain of command is essential for many things, and blockchain has the chain of command built in.

The very things that are necessary for reliability and integrity in a supply chain are provided by blockchain. Blockchain provides consensus—there is no dispute in the chain regarding transactions because all entities on the chain have the same version of the ledger. Everyone on the blockchain can see the chain of ownership for an asset on the blockchain. Records on the blockchain cannot be erased which is important for a transparent supply chain.

Examples of blockchain being used in supply chains today

Since blockchains allow for transfer of funds anywhere in the world without the use of a traditional bank, it’s very convenient for a supply chain that is globalized. That’s exactly how Australian vehicle manufacturer Tomcar pays its suppliers—through Bitcoin.

In the food industry, it’s imperative to have solid records to trace each product to its source. So, Walmart uses blockchain to keep track of its pork it sources from China and the blockchain records where each piece of meat came from, processed, stored and its sell-by-date. Unilever, Nestle, Tyson and Dole also use blockchain for similar purposes.

BHP Billiton, the world’s largest mining firm, announced it will use blockchain to better track and record data throughout the mining process with its vendors. Not only will it increase efficiency internally, but it allows the company to have more effective communication with its partners.

The transparency of blockchain is also crucial to allow consumers to know they are supporting companies who they share the same values of environmental stewardship and sustainable manufacturing. This is what the project Provenance hopes to provide with its blockchain record of transparency.

Diamond-giant De Beers uses blockchain technology to track stones form the point they are minded right up to the point when they are sold to consumers. This ensures the company avoids ‘conflict’ or ‘blood diamonds’ and assures the consumers that they are buying the genuine article.

There are several supply chain start-ups such as Cloud Logistics who saw an opportunity to provide blockchain-enabled supply chain solutions to improve efficiencies and reduce costs for the massive supply chain industry. More will most certainly join them as they realize the potential and demand for blockchain-enabled solutions to transform the supply chain and logistics industry.

 

Source: All the above opinions are personal perspective on the basis of information provided by Forbes and contributor Bernard Marr.

https://www.forbes.com/sites/bernardmarr/2018/03/23/how-blockchain-will-transform-the-supply-chain-and-logistics-industry/#475e15435fec

 

Bitcoin Facts You Should Know

March 18th, 2018

Bitcoin is not a fraud, nor is it a golden nugget. People continue to have strong views and positions on what bitcoin is and debate on its potential, legitimacy and relevance. The discussions are meaningful and leave many more thoughts for us to ponder. But those are opinions, and while useful, facts are critical and important to know. Knowing facts will contribute to meaningful dialogue and questions. Here are some to start with.

Bitcoin is programmable money. Bitcoin introduced a new form of money – programmable money. Bitcoin and other cryptocurrencies (or cryptoassets) operate under the same philosophy as past monies and money we are more familiar with. What determines money is a shared set of rules for exchanging value. The difference with cryptocurrency is that the rules are determined by the payer and payee. They decide the terms and conditions of the transaction, which are codified. This system will, and has started to, extend beyond cryptocurrency and ultimately allows for a huge array of transactions including contracts, expertise, assets and services.

In the analog world, we have physical forms of money such as goods and paper money and are limited by distance. In the digital world, we attained further reach with our transactions, eliminating the constraint and dependency of human distance and speed. However, in the digital world, we are governed by the speed and mercy of banks. In the crypto world of programmable money, we eliminate both human and institutional constraints. These frictions are expensive and reduced.

Bitcoin is not created out of thin air. Bitcoin is created through a process called mining. Blockchain, the technology that bitcoin is built on top of, is dependent on a network of nodes that ensures the integrity of transaction history by achieving consensus. Validation is one part of the process. After validating a transaction, the nodes then need to race, using trial and error, to solve a difficult mathematical puzzle that requires heavy computing resources. The first computer in the network that solves the equation will be rewarded with bitcoins. This is known as ‘mining bitcoins’. This protocol is referred to as Proof of Work (PoW).

Bitcoin mining serves two purposes: it allows for the creation of new coins and facilitates the processing of transactions in the network. Mining requires energy, hardware and bandwidth. If you try to mine bitcoins on your computer, you will find the cost of electricity will likely outweigh the value of bitcoins you can mine. Other cryptocurrencies also use PoW. Another emerging protocol is Proof of Stake (PoS) which does not need energy or hardware to achieve consensus, but rather uses staking or bonding tokens to determine the next block.

Bitcoin has value. There will only ever be 21 million bitcoins created, which is deflationary and the opposite of paper money which is inflationary. Bitcoin’s value and security is derived from the fact that it is easy to prove that substantial computing power and electric energy was expended to solve a math puzzle. This protects against fraud and counterfeit information. When bitcoin is created by PoW, the mining is authenticated and backed by a verifiable network.

Anyone can create their own currency. But a community is needed to accept the creation in order for it to have value. The world has been transacting with bitcoin for over nine years with a global community. Bitcoin also acts like a stock in that the price can go up and down arbitrarily. A stock price represents what another party is willing to pay for it. Cryptocurrencies function in the same way.

Bitcoin can be used for payment locally and globally – A vacuum existed for a faster, more efficient, and hassle free way to exchange money. Bitcoin was the first cryptocurrency to fill this white space and was created for payments and storing value. This new form of money enables online money transfers, peer-to-peer, without an intermediary like a bank. Generally, bitcoin and other cryptocurrencies can be transferred faster and with lower fees. (As bitcoin and other cryptocurrencies have gained more popularity, fees may be impacted by congestion and traffic on the blockchain).

In the earlier years of bitcoin, one could buy everyday items such as coffee, beer and dinner and transfer money for a few cents. The price wasn’t so volatile and the transaction time was fairly quick as usage on the blockchain wasn’t high. The charm was that no banks or financial institutions were involved. It was especially attractive if one wanted to transfer money to someone in another country. One could have sent $1MM worth of bitcoin to someone in another country at a cost of less than USD $1 and the receiver could convert it to fiat (aka paper money) in that country in less than an hour. Today with bitcoin’s price volatility and potential higher fees, it may not be practical for payments of everyday items. However, if you are transferring $1MM worth of bitcoin cross border, it may still be worth it.

Bitcoin as the first successful programmable money on the blockchain gave us universal, virtual and borderless cash – which is only the beginning. Bitcoin and blockchain didn’t just define the future of money. It is shaping the future of economies and transactions, and ultimately the future.

Source: All the above opinions are personal perspective on the basis of information provided by Forbes and contributor Jamie Moy.

https://www.forbes.com/sites/jamiemoy/2018/03/14/bitcoin-facts-you-should-know/#564e5f2e0dab