How Blockchain Technology Moves the World Economy

Blockchain: the revolutionary technology that is miraculously impacting different industries was introduced in the markets with its very first modern application Bitcoin. Bitcoin is nothing but a form of digital currency (cryptocurrency) which can be used in the place of fiat money for trading. And the underlying technology behind the success of cryptocurrencies is termed as Blockchain.

Blockchain definition

Blockchain is a data structure that holds transactional records and while ensuring security, transparency, and data decentralization. It is a chain of files stored in the forms of blocks which are controlled by no single authority. They are compone by millions of algorithms and numbers almost impossible to decode because each block contains information from the above, and this makes it safer.

A blockchain is a distributed ledger, is entirely open to any and everyone on the network, but the information stored on the chain, it is tough to change or alter it. Each transaction on a blockchain is secured with a digital signature. Due to this, the data stored on the blockchain is tamper-proof and cannot be changed.

This is the main character because the blockchain technology became famous and rentable for business.

Blockchain technology allows all the network participants to reach an agreement, commonly known as consensus. All the data stored on a blockchain is recorded digitally and has a shared history which is available for all the network participants. This way, the chances of any fraudulent activity or duplication of transactions is eliminated without the need of a third-party.

How Does a Blockchain Work?

A blockchain contains data or information. Each block of blockchain network stores some information along with the hash of its previous block, as we explained before.

A hash is a unique mathematical code that belongs to a specific block of the chain.

Suppose: data inside the block is modified, this means that the hash of the next block will be changed too, and the next, and so on. Thanks to that, blockchain is secure.

While transactions take place on a blockchain, there are nodes on the network that validate these transactions. In the blockchain, these nodes are called miners, and they use the concept of proof-of-work to process and verify transactions on the network. For a deal to be valid, each block must refer to the hash of its preceding block. The transaction will take place only and only if the hash is correct. If a hacker tries to attack the network and change information of any specific block, the hash attached to the block will also get modified.

If there is a breach, it will be detected immediately as the modified hash will not match with the original one. This ensures that the blockchain is unalterable, and any change which is made will be reflected throughout the entire network.

Here’s how blockchain allows transactions to take place:

  • A blockchain network makes use of public and private keys to form a digital signature, ensuring security and consent.
  • Once the authentication is ensured through these keys, the need for authorization arises.
  • Blockchain allows participants of the network to perform mathematical verification and reach a consensus to agree on any particular value.
  • While making a transfer, the sender uses their private key and announces the transaction information over the network. A block is created containing information such as digital signature, timestamp, and the receiver’s public key.
  • This block of information is broadcasted through the network, and the validation process starts.
  • Miners all over the network start solving the mathematical puzzle related to the transaction to process it.
  • Upon solving the puzzle first, the miner receives rewards in the form of bitcoins.
  • Once the majority of nodes in the network come to a consensus and agree to a standard solution, the block is time-stamped and added to the existing blockchain. This block can contain anything from money to data to messages.
  • After the new block is added to the chain, the existing copies of the blockchain are updated for all the nodes on the network.

Source: hackernoon

That's all.

Types of Blockchain used

Public Blockchain

As the name suggests, a public blockchain is a permissionless ledger and can be accessed by any and everyone. Anyone with access to the internet is eligible to download and access it. Moreover, one can also check the overall history of the blockchain along with making any transactions through it. Public blockchains usually reward their network participants for performing the mining process and maintaining the immutability of the ledger.

Public blockchains allow communities worldwide to exchange information openly and securely. However, a distinct disadvantage of this type of blockchain is that it can be compromised if the rules around it are not executed strictly. Moreover, the rules decided and applied initially have a minimal scope of modification in the later stages.

Private Blockchain

Contrary to the public blockchain, private blockchains are the ones which are shared only among the trusted participants. The overall control of the network is in the hands of the owners. Moreover, the rules of a private blockchain can be changed according to different levels of permissions, exposure, number of members, authorization, etc.

Private blockchains can run independently or can be integrated with other blockchains too. Enterprises and organizations usually use these. Therefore, the level of trust required amongst the participants is higher in private blockchains.

Hybrid Blockchain

Also called consortium blockchains, are considered to be semi-decentralized and employ characteristics of both public and private blockchains. Hybrid blockchains contain sets of permissions, similar to private blockchains; however, instead of a single organization controlling it, a group of agreed-upon organizations controls it. Administrators of each organization can restrict users’ reading rights as they desire and only allow a limited set of trusted nodes to execute a consensus protocol.

Now, which applications can you develop using blockchain technology?

Cryptocurrencies were the first signals of the enormous potential of blockchain technology. Actually, they made it famous, but this is not the only way of using and taking advantage of it.

Blockchain technology has led businesses, industries, and entrepreneurs from all around the world to explore the technology's potential, make revolutionary changes, and earn money being safe.

So, let's find out how Blockchain can be useful in practical implementation for you.

1. Smart contracts

A contract is a document where reposes a transaction between two people, companies, and so on.

Different businesses deal with each other to exchange services or products using it, but paper-based contracts are prone to errors and frauds.

Blockchain, by itself, brings forward a fantastic solution to this problem for the high level of security it has.

In that way, smart contracts perform similar functions as paper-based agreements, but they are digital as well as self-executable in nature.

Self-executable means that when certain conditions in the code of these are met, they are automatically deployed.

Ethereum (which is a blockchain network) has fantastic options to develop smart contracts. There is no area where this kind of document can not be useful.

2. Government Elections

This is a public business, but you perfectly can develop a software to ensure the authencity and the correct transaction of votes for any government voting process or tender.

The current voting system relies on manual processing and trust, and you can change this.

Blockchain smart contracts provide a modern system through which these common issues can be easily eliminated, so smart contracts will allow transparency and security while maintaining the privacy of the voters.

3. Identity management

Everything is on the internet. And financial transactions are part of this. Blockchain each time represents excellent options to protect sensitive information like financial transactions, invoices, and even accessing credentials.

This technology offers you advanced methods of public-private encryption using which you can prove your identity and digitize your documents, money, and whatever you need keeping in safe.

This is enough reason to consider providing software for this necessity. It can make you a millionaire if you follow the right steps.

Some apps that already used Blockchain technology

* Canadian Imperial Bank of Commerce (CBIC), Royal Bank of Canada (RBC), Scotiabank, Toronto–Dominion (TD), and Bank and Desjardins Group

Five banks from Canada recognize and take advantage of the blockchain security for the identity verifying of their employees.

This software is called Verified.Me and it was developed on IBM blockchain for mobile (android and iOs available).

“We are entering a new era in which Canadians can clearly and confidently assert when, why and with whom their digital identity assets are shared,”- said Katie Greenberg, who is the Vicepresident for digital products and retail payments at Scotiabank.

This app was created for the Canadian government in coordination with the Digital ID and Authentication Council of Canada, the U.S. Department of Homeland Security Science and Technology Directorate, credit rating agency Equifax and EnStream ( telecommunications enterprise from Canada).

* Ethereum

This blockchain network has been used for several purposes, but one of the most important is to run smart contracts on a custom-built blockchain.

Ethereum is a public (permissionless) blockchain platform that contains an entire environment called Ethereum Virtual Machine (EVM) used for many companies, startups, and so on.

The Ethereum Enterprise Alliance (EEA) is a non-profit organization with more than 250 members, and it has the goal of connecting companies, academics, startups, and blockchain companies with Ethereum subject matter experts. Some members of the EEA are Microsoft, J.P. Morgan Chase, and Intel, who are embracing the use of Ethereum as a web platform.

* Welwaze Medical

This is a local startup, founded in Miami. Welwaze Medical provides a blockchain-based health management platform. It integrates a medical device, an app, and AI on a blockchain on the same platform.

It was created in 2016, and its most significant proposal is the Celbrea app, specialized on mammography tests, and recommendations for self-care based on the results.

All this data is stored in Welwaze's HIPAA-compliant database, tagged, and validated on the Blockchain network.

* dexfreight

dexFreight is another startup in Miami. It was founded in 2017, and its product used blockchain technology for smart contracts, invoicing, and more. It is a collaborative marketplace (open source software) that enables users (freight forwarders, carriers, etc.) to collaborate and offer shared services to customers. It uses a blockchain network and artificial intelligence too.

* Tokenpay

Tokenpay is another (of many) startups founded in our city. It is a decentralized payment platform that offers merchant service tools, Bitcoin and TokenPay wallets, online escrow, and international banking services, all of that, using blockchain technology.

It has P2P crypto and fiat transfers, insured wallet, physical and virtual international debit card, dual-key stealth address to wallets, and so on.

Blockchain is friendly technology. If you are interested, keep reading and investigating what you do need to develop a software project using it. More areas of applications are being discovered and tested with each passing day, and you can find the next. Why not?

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