Blockchain: What is it, how it works and how it is being used in the market

Blockchain is generally associated with Bitcoin and other cryptocurrencies, but these are just the tip of the iceberg. This technology was originally …

A closer look at the technology that is rapidly growing in popularity

Blockchain is generally associated with Bitcoin and other cryptocurrencies, but these are just the tip of the iceberg. This technology was originally conceived in 1991, when Stuart Haber and W. Scott Stornetta described their first work on a chain of cryptographically secured blocks, but only gained notoriety in 2008, when it became popular with the arrival of Bitcoin. It is currently gaining demand in other commercial applications and its annual growth is expected to reach 51% by 2022 in numerous markets, such as those of financial institutions and the Internet of Things (IoT), according to MarketWatch.

What is blockchain?

A blockchain is a unique, consensual record that is distributed over multiple network nodes. In the case of cryptocurrencies, think of it as the accounting ledger where each transaction is recorded.

A blockchain transaction is complex and can be difficult to understand if you delve into the inner details of how it works, but the basic idea is simple to follow.

Each block stores:

  • A number of valid records or transactions.
  • Information referring to that block.
  • A link to the previous block and next block through the hash of each block—a unique code that can be thought of as the block’s fingerprint.

Accordingly, each block has a specific and immovable place within the chain, since each block contains information from the hash of the previous block. The entire chain is stored in each network node that makes up the blockchain, so an exact copy of the chain is stored in all network participants.

As new records are created, they are first verified and validated by the network nodes and then added to a new block that is linked to the chain.

How is blockchain so secure?

Being a distributed technology in which each network node stores an exact copy of the chain, the availability of the information is guaranteed at all times. So if an attacker wanted to cause a denial-of-service attack, they would have to annul all network nodes since it only takes one node to be operative for the information to be available.

Besides that, since each record is consensual, and all nodes contain the same information, it is almost impossible to alter it, ensuring its integrity. If an attacker wanted to modify the information in a blockchain, they would have to modify the entire chain in at least 51% of the nodes.

Ultimately, since each block is mathematically linked to the next block, once a new block is added to the chain, it is rendered unchangeable. So if a block’s relationship with the chain is modified, it is broken. In other words, all information recorded in blocks is immutable and perpetual.

Therefore, blockchain technology allows us to store information that can never be lost, modified, or deleted.

Moreover, each network node uses certificates and digital signatures to verify the information and validate the transactions and data stored in the blockchain, which ensures the authenticity of this information.

You could say that blockchain is like a record keeper. A means of certifying and validating any type of information. A reliable, decentralized registry, resistant to data manipulation, in which everything is recorded.

We are currently used to working with centralized models. We give all our information to companies like Google or Facebook to administer, send all our messages through Telegram or WhatsApp servers so that they can send them, or spend fortunes on record keepers and institutions to certify and store our important deeds or documentation.

In blockchain, data is distributed across all network nodes. With no central node, all participate equally, storing, and validating all information. It is a very powerful tool for transmitting and storing information in a reliable way; a decentralized model in which the information belongs to us, since we do not need a company to provide the service.

What else can blockchain be used for?

Essentially, blockchain can be used to store any type of information that must be kept intact and remain available in a secure, decentralized and cheaper way than through intermediaries. Moreover, since the information stored is encrypted, its confidentiality can be guaranteed, as only those who have the encryption key can access it.

Use of blockchain in healthcare

Health records could be consolidated and stored in blockchain, for instance. This would mean that the medical history of each patient would be safe and, at the same time, available to each doctor authorized, regardless of the health center where the patient was treated. Even the pharmaceutical industry could use this technology to verify medicines and prevent counterfeiting.

Use of blockchain for documents

Blockchain would also be very useful for managing digital assets and documentation. Up to now, the problem with digital is that everything is easy to copy, but Blockchain allows you to record purchases, deeds, documents, or any other type of online asset without them being falsified.

Other blockchain uses

This technology could also revolutionize the Internet of Things (IoT) market where the challenge lies in the millions of devices connected to the internet that must be managed by the supplier companies. In a few years’ time, the centralized model won’t be able to support so many devices, not to mention the fact that many of these are not secure enough. With blockchain, devices can communicate through the network directly, safely, and reliably with no need for intermediaries.

Blockchain allows you to verify, validate, track, and store all types of information, from digital certificates, democratic voting systems, logistics and messaging services, to intelligent contracts and, of course, money and financial transactions.

At present, the following projects, which are worth taking a look at, are already being developed:

HyperLedger Project

This involves a consortium of large companies looking to develop blockchain-based solutions. They have several active projects.

R3 Cev

In this case, the 40 largest banks in the world have come together to develop blockchain-based solutions for their financial processes. They also produce reports and conduct research on this technology.

Storj

The first blockchain-based storage initiative available to everyone. User data is encrypted and stored in blockchain to keep it secure and available.

Proof of Existence

An online certification service for any type of document. It allows users to save documents in blockchain, which can never be altered or deleted.

According to a survey conducted by the consultancy firm Deloitte, 74% of the companies asked consider blockchain to be an improvement for the business and plan to invest in this technology, while almost half of them already have blockchain implemented in some way in their business.

Without doubt, blockchain has turned the immutable and decentralized layer the internet has always dreamed about into a reality. This technology takes reliance out of the equation and replaces it with mathematical fact.

9 Oct 2018 – 02:00PM

Discussion

Related Posts:

  • No Related Posts

Architecting a Blockchain solution for the enterprise

In this article, JAX London speaker Vinita Rathi explores why Blockchain and distributed ledger technology platforms deserve our attention.

Cryptocurrency was a massive buzzword across all sectors of technology and finance last year, but since then the whole cryptocurrency hype has seen a downfall. While the future of cryptocurrencies is still unknown for the most part, its dominance in real economy is yet to be understood. However, I would like to discuss here is the underlying technology that cryptocurrencies are based on, specifically Blockchain and various distributed ledger technology platforms such as Hyperledger, Ethereum, NEM, and more.

Choosing between different blockchain solutions

Recently, I was approached by a firm that is in the process of digitizing medical records of citizens of an African nation. They wanted to not only control access to the medical records via biometric recognition and authentication, but also put technology in place to ensure that the medical records were immutable once they were in the system. The key points for consideration were:

  • Permission based access
  • Scalability and latency
  • Immutability and data integrity

While we looked at several private blockchain solutions like Waves, NEM, or Corda, we noticed that Hyperledger Fabric stood out amongst all of them time and time again for both this use case as well as others we had been working on.

The key decisions that ruled in favor of Hyperledger Fabric were:

  • Permissioned Framework
  • Ability to run complex queries
  • Scalability and cost of hosting/maintenance
  • Maturity (in comparison to other solutions)
  • Golang

Most of the promising solutions that I come across lack the maturity needed for such a big implementation. There are hardly a few systems that are being used in large scale enterprise production environments.

SEE ALSO: The ultimate guide to Blockchain programming for new developers

Challenges in utilizing blockchain

One of the challenges worth pointing out is the concurrency challenge we have had around using Hyperledger, especially in our use case. We needed to provide a provision in the system to allow write and read multiple operations on the same object concurrently.

In this situation, the use case is:

  • A patient visits a clinic
  • Patient’s identity is confirmed
  • Object access is granted to the clinic
  • Object can be updated
  • Record which user altered the object.

Even though the chances of same object being written simultaneously was rare, we still had to account for a situation where the write request for the object was pending while read access was requested. This could potentially invalidate the state of the read.

SEE ALSO: How can blockchain help boost cybersecurity?

This is how the first version of architecture looked like:

blockchain

Figure 1: Our architecture.

The second challenge we faced was the deployment. Hyperledger focuses heavily on Docker. Luckily, our DevOps team at Systango was accustomed to using it in pretty much in every project we undertake.

SEE ALSO: How cryptographic algorithms and hashing keep blockchain secure

While we have deployed the system in production, its usage is still in a very early stage. It’s hard to comment on the system’s scalability as of yet. However, in the sandbox environment we tested it with 1,500 concurrent transactions and it performed fairly well.

For an in-depth review of the architecture, deployment challenges and key learnings of other projects, please join me at my session this October at JAX London. I’ll be going over all this and more there.

Vinita Rathi will be delivering a talk at JAX London 2018 on Tuesday, October 9 that goes over what blockchain is, functional blockchain solution designs, and the five pillars of an enterprise blockchain solution design.

love me like you do

Related Posts:

  • No Related Posts

Blockchain: Carrefour signs up to IBM’s “game-changing” food network

09 Oct 2018 — French-headquartered retail giant Carrefour has joined the IBM Food Trust blockchain network, adopting the game-changing …
636746763489314938technologymap.jpg

09 Oct 2018 — French-headquartered retail giant Carrefour has joined the IBM Food Trust blockchain network, adopting the game-changing technology to improve traceability of certain food products with plans to expand to all Carrefour brands by 2022. A number of retailers, logistics firms and growers are working with IBM-developed blockchain technology – and now Europe’s largest retailer is adopting blockchain which will quickly help trace food back to its source within seconds, unlike traditional transactions.

The blockchain-based cloud network offers businesses and food industry providers with data from across the food ecosystem to enable greater traceability, transparency and efficiency.

The network is now generally available after 18 months in testing, during which retailers and suppliers have tracked millions of individual food products.

The move by Carrefour comes just a couple of weeks after Walmart, an early proponent of blockchain technology, announced that its leafy green suppliers would be required to capture digital, end-to-end traceability event information using IBM Food Trust. You can read more on this here. The US retail giant lauds the benefits of the database that can quickly and efficiently identify contamination.

Walmart has been piloting the new technology in collaboration with numerous suppliers and IBM over the last 18 months to demonstrate that meaningful enhancements to food traceability is possible and expects all suppliers to have all systems in place by this time next year.

Rapidly pinpointing potential food contamination is one of the significant virtues of blockchain technology which speeds up food contamination investigations. Enhanced ability to trace food back to its source can help companies and government agencies to identify the source of foodborne disease outbreak and coordinate effective recalls of foods thought to be contaminated.

“The currency of trust today is transparency”

Carrefour stores will initially use the solution to highlight consumers’ confidence in a number of Carrefour-branded products, as part of the retailer’s Act for Food program.

“Being a founding member of the IBM Food Trust platform is a great opportunity for Carrefour to accelerate and widen the integration of blockchain technology to our products to provide our clients with safe and undoubted traceability,” says Laurent Vallée, general secretary of Carrefour. “This is a decisive step in the roll-out of Act for Food, our global program of concrete initiatives in favor of the food transition.”

Although so far there have been few examples of its large-scale application, blockchain is a burgeoning technology and many agile companies within and the food industry are adopting it as a transparency solution. Other industries such as finance and retail are also using blockchain solutions.

The attributes of blockchain and the ability to permission data, enables network members to gain a new level of trusted information. Transactions are endorsed by multiple parties, leading to an immutable single version of the truth, says IBM, as momentum grows among users and third-party data suppliers on the network.

The IBM Food Trust network has expanded to focus on optimizing the food supply, including generating insights on product freshness, reducing waste and making the supply chain more collaborative and transparent.

IBM Food Trust uses a decentralized model to allow multiple participating members of the food supply chain – from growers to suppliers to retailers – to share food origin details, processing data, and shipping information on a permissioned blockchain network. A separate entity controls each node on the blockchain and all data on the blockchain is encrypted. The decentralized features of the network enable all parties to work together to ensure the data is trusted.

“The currency of trust today is transparency and achieving it in the area of food safety happens when responsibility is shared,” says Bridget van Kralingen, Senior Vice President, IBM Global Industries, Clients, Platforms and Blockchain.

“That collaborative approach is how the members of IBM Food Trust have shown blockchain can strengthen transparency and drive meaningful enhancements to food traceability. Ultimately, that provides business benefits for participants and a better and safer product for consumers.”

The scale of the food system is so huge, it is virtually impossible for any single entity to track – but blockchain changes that and can increase trust, traceability and security in the supply chain.

In addition to Carrefour, other organizations joining IBM Food Trust include:

  • Leading cooperative Topco Associates, LLC, representing 49 members, reaching over 15,000 stores and 65 million weekly customers;
  • Retailer-owned cooperative Wakefern, representing 50 member companies and 349 stores;
  • Suppliers including BeefChain, Dennick Fruit Source, Scoular, and Smithfield.

IBM says that members joining the growing ecosystem of the IBM Food Trust have helped build a powerful global business solution that is interoperable and built on open standards. It’s designed to enable organizations in the food industry to run their businesses more effectively and provide safer food at lower costs.

“Blockchain helps us be more transparent. It transforms how the food industry works by speeding up investigations into contaminated food, authenticating the origin of food, and providing insights about the conditions and pathway the food traveled to identify opportunities to maximize shelf-life and reduce losses due to spoilage,” explains Ed Treacy, Vice President of Supply Chain Efficiencies at the Produce Marketing Association.

IBM Food Trust runs on the IBM Cloud and features enterprise-class security, reliability and scalability. The foundation of the technology relies on Hyperledger Fabric, an open source blockchain framework hosted by the Linux Foundation. In addition, the network includes compatibility with the GS1 standard used by much of the food industry to ensure interoperability for traceability systems, according to IBM.

Participants can select from three IBM Food Trust software-as-a-service modules with pricing that is scaled for small, medium and global enterprises, beginning at US$100 per month. Suppliers can contribute data to the network at no cost.

By Gaynor Selby

To contact our editorial team please email us at editorial@cnsmedia.com

Related Posts:

  • No Related Posts

Ethereum price analysis: ETH/USD bulls gather energies for another assault on $230 handle

Ethereum, the second largest coin by market value, is capped by a critical $230 handle, trading at $229 at the time of writing amid weak momentum.
  • ETH/USD stays below $230 after a short-lived breakthrough.
  • Ethereum developers demonstrate strong support for the platform.

Ethereum, the second largest coin by market value, is capped by a critical $230 handle, trading at $229 at the time of writing amid weak momentum. The coin is 1.6% higher on a day-on-day basis, but unchanged since the beginning of Tuesday. Ethereum’s current market value is $23.4B, while the average daily trading volume is registered at $1.47B, in line with long-term average figures.

What’s going on

While it’s been a tough year for Ethereum, the network is still the choice No.1 for dApps developers and smart contract-based projects. About 1,000 developers participated in the hackathon that took place in San Francisco from October 5 to October 7. Moreover, developers have been flocking to Ethereum platform despite price decrease with the number of users downloading ETH application for developers increased substantially by the end of the first quarter.

Many people blame Ethereum for the ICO market bubble and a lot of scams related to the initial coin offerings, but the revolutionary potential of the “World’s first decentralized computer” still fascinates the tech guys and motivate them to work on viable real0life use cases for Ethereum’s technology.

Ethereum’s technical picture

ETH/USD escaped from a short-term triangle pattern with bullish breakthrough; the price touched $232, but a strong selling interest located above critical resistance, pushed the coin back inside the range.

Currently, the coin is supported by the former resistance area $225. It is strengthened by a confluence of SMA levels (1-hour chart) and a short-term upside trendline from October 3 low at $214. Once this area is cleared, the sell-off may continue towards the above-said October 3 low and psychological $200.

The upside is capped by $230 handle and $238 (DMA50). This hurdle needs to be cleared to unlock the way towards the long-term resistance of $250.00.

ETH/USD, 1-hour chart


Get 24/7 Crypto updates in our social media channels: Give us a follow at FXStreet Crypto Trading Telegram channel

Related Posts:

  • No Related Posts

Beyond CryptoKitties: Is There A Place For Blockchain In The B2C Market?

But the uniqueness of the game is that it is built on the blockchain technology developed by Ethereum. Sales and ownership of each unique pet is …

CryptoKittiesPexels.com

CryptoKitties, for anyone who is not familiar, is a virtual game in which players buy, collect, breed, and even sell virtual cats. But the uniqueness of the game is that it is built on the blockchain technology developed by Ethereum. Sales and ownership of each unique pet is validated through this network and no transactions can occur without the participants’ permission. It was launched in in October, 2017 and went viral by December, jamming the Ethereum network.

Since then, it has been spun off and managed to raise $12 million in funding from a combination of high-profile venture capitalists and angel investors. To clarify, cryptokitties are not a cryptocurrency. They are virtual pets bred and collected on an online platform. But the underpinning technology of this game is blockchain.

And here’s the thing: consumers can develop understanding of and comfort with the process by which blockchain is used for transactions, along with the benefits of that technology (security, privacy, immutability, etc.) by playing the game. And as they become comfortable, the opportunity for businesses to use blockchain and cryptocurrencies in the B2C marketplace will increase.

The B2B market is already benefiting from the blockchain

Blockchain technology has been adopted by financial organizations, healthcare providers, insurance enterprises and even by some agricultural companies. The reason is clear. “With blockchain, transactions, records, contracts and other documents are recorded and securely stored,” said Andrew Wong, a former JPM banker who left to join IDCM to pursue his dream of cryptocurrency. “They cannot be changed without permission from all parties involved. The potential for reducing fraud alone makes this technology valuable.”

And the initial blockchain technology has now given rise to decentralized apps (dApps) – the creation of software applications for real-life situations and solutions, and this may be the key to the B2C marketplace.

Why consumers hesitate to use blockchain

Anything new, especially in the world of technology, takes time to make its way to consumer acceptance. And so it is with blockchain. Why? Because it’s tough to understand. And people tend to mistrust what they don’t understand.

A survey conducted by Bitcoin.com revealed that in the largest crypto-market – South Korea – 90% of respondents have heard of bitcoin and understand what it is. However, only 8% know what a blockchain is and understand how it’s related with bitcoin and other cryptocurrencies.

Many consumers may already know that some of the businesses they patronize already use or are at least experimenting with blockchain technology – banks, the travel industry, insurance companies, for example.

But to use it themselves and to actually make purchases using a crypto, is taking a big step into the unknown.

So if you are considering incorporating blockchain technology, you have to tread gradually. Start with an educational campaign to communicate the benefits of using blockchain to your current users. Also, consider polling your target audience about their current awareness of the blockchain technology. Survey Cool lists a number of fee-based focus group survey organization that you can leverage. You can run these periodically and determine the increase in understanding the technology and the willingness of customers to embrace it. And before pushing for a change, consider the B2C niches where blockchain has already made some progress.

Current consumer-based dApps

Gaming (e.g., CryptoKitties) currently has the largest percentage of all dApps (42%). Exchanges come in second with 22%. And, in fact, only 25% of all DApps have more than 100 transactions a week. Over time, however, this will change. And it seems that Ethereum may be the catalyst.

Ethereum is a blockchain-based financial platform, originally designed for smart contracts, using its own cryptocurrency (ether). But it has much larger plans in mind. It has opened up its programming language, Solidity, to developers, as well as its virtual machine. Developers will be able to use these tools to create dApps that will have real-life uses, certainly for consumers.

For example, one recently developed dApp is Golem, which establishes a global market for idle computer use. So, if a consumer’s computer is idle all night, a user in another part of the world can contract for use of that computer during those hours – a part of the new “sharing” economy that consumers are now embracing.

Additionally, companies like Overstock, Expedia, PayPal, Shopify and Microsoft already accept payments with cryptos. The list continues to grow. Consumers who decide to use this method of payment will do so through blockchain and will come to realize that it is not that difficult to do.

Separating out blockchain and cryptos

There does have to be an understanding of the fact that, while blockchain technology support all cryptocurrencies, the opposite is not true.

Many companies are now setting up their own private blockchain platforms, which are used for transactions with their customers, even if those customers are using fiat currencies.

Ultimately, consumers will come to embrace blockchain, just as they did computers, online shopping, cell phones and now smart homes and appliances. These were all at one time unknown and thus untrusted technologies.

Blockchain technology is not going away. While it is still evolving, its early benefits are unmistakable. Practice patience as you move your customers toward it.

Related Posts:

  • No Related Posts