4 advantages of Blockchain Technology outside Cryptocurrency

Blockchain is a resourceful and farsighted invention of the human. The technology is viewed to bring meaningful and significant changes in the system of finance. Its decentralized, independent and transparency features make it more reliable and easily accessible for the users. Blockchain stores all the information and the records between the parties as a distributed ledger that can be easily accessed by them at any time and any place they want. 

Many cryptocurrencies or digital currencies are already based on Blockchain technology. Apart from digital currencies, it is also in use by some industries such as business, government, and healthcare, etc. It is helping the industries in improving their techniques of working, functioning and hence in performing better. It makes the organizations and users achieve accessibility, transparency, security, better functioning, and many such things at a very minimal cost.

Let us see how Blockchain will transform the industries and organizations for their enhanced performance by changing their functionalities.

Smart Contracts

Contractual transactions are time-consuming as well as a bit risky. In addition to that, it also lacks transparency, because contracts require the third party undertaking. It requires a third party to come in between or become a mediator between the two parties when they are signing a contract. 

Smart contracts are digital or virtual contracts. It does not need a third party and can perform without them. Smart contracts control the transfer of digital currencies or assets between parties but with certain conditions. A smart contract does not only include the rules, regulations, and penalties related to an agreement just the same way a traditional contract does, but it can also automatically execute those commitments. It is transparent and also accessible to both parties. None of the party can tamper it and even if they try to then the other party will automatically get informed.

Reduced Costs

Some financial institutions that provide cross-border exchanges, charge high transaction costs. It also involves middle-men or mediator to monitor and keep a check on the operations.

With blockchain, you do not need a third person to monitor and it will not even matter that you trust the other party because there is no room for any kind of fraud with this technology. The removal of middlemen leads to a reduction in costs.

Quality Assurance  

Blockchain assures quality providing the facilities of safety and security. It is very much essential for the organizations and industries to work efficiently, without any error or mistake, to maintain and upgrade their functioning. If any fault or error is found,
Blockchain will be able to trace it from the starting and after researching, necessary steps could be taken to fix it.

Efficient Accounting

Blockchain is virtual, where all the transactions are recorded automatically. This feature of Blockchain eliminates the chances of any human error. Records automatically get verified and this is how the chances of any mistakes lessen or even gets eradicated. This way it makes the transactions and accounting more accurate and also highly traceable.  

Conclusion

Despite the fact that Blockchain was initially explored for digital currencies or digital assets, it is in use and can be used in other different sectors and industries as well.

Top 5 Myths Surrounding Blockchain

Blockchain Technology has increasingly gained importance over the past years. From disrupting the working of industries to changing the way we live our day-to-day life, this technology has seeped into everything. This transformative technology is seen by many as the ultimate solution to all our modern-day problems. 

No wonder, people refer to blockchain as the genie of the 21st Century. However, with this blockchain has developed a mystical aura. It is surrounded by both believers and skeptics. These skeptics have spread a number of myths about blockchain. These blockchain myths have spread around the globe. 

But before going further, let us understand what is blockchain:

Blockchain technology is a distributed ledger that offers a way of recording transactions or any other kind of digital interaction. It stores and records everything in a secure, transparent and efficient way. The blocks in a blockchain are made up of pieces of information that are entirely digital in nature. These blocks secure the information with the help of cryptography which is almost impossible to break. 

To give you an insight into this emerging technology, here are the top 5 myths about Blockchain technology that you should be aware of:

  • Blockchain and Bitcoin are the same: The popularity of Bitcoin has overshadowed the stage for Blockchain. This has spread the confusion that both blockchain and bitcoin are the same. Blockchain is the technology that provides an open and distributed ledger that records everything in a transparent method. On the other hand, Bitcoin is a cryptocurrency that was built on Blockchain. Hence, blockchain can exist without bitcoin and it has disrupted a number of industries. However, Bitcoin or any other cryptocurrency cannot exist without blockchain. 
  • Blockchain can only be used in the world of finance: No doubt, the first sector blockchain stepped in was finance. With the birth of cryptocurrency, the financial world witnessed a wave of change. However, the technology itself has transformed a number of industries. Today, blockchain has found its utilization in a number of fields like healthcare, real estate, etc. Furthermore, it has also transformed the working of governments. 
  • There is only one type of Blockchain: In today’s tech-powered world, there are majorly three types of blockchains: 
  • Public Blockchain: In this kind of Blockchain, anyone can read and write on the blockchain
  • Private Blockchain: Here there is one in charge who manages and regulates the blockchain. Hence, it is not open to everyone to see and edit. 
  • Consortium Blockchain: In this type of blockchain, there is one in charge with a group of people or a company which together makes a decision which best suits the blockchain. 
  • Cryptocurrencies are volatile hence, blockchain is also unreliable: This myth was spread due to blockchain’s initial association with cryptocurrency. However, blockchain has a number of other applications except for bitcoin and cryptocurrency. Hence, one must not associate the reliability of blockchain with cryptocurrency. 
  • The information present on the blockchain is not publically available: One of the most common misconceptions surrounding this technology is that it is completely secretive. In contrast, most blockchains are public and traceable. 

Like any other innovation taking shape in this world, blockchain has a number of initial misconceptions and myths. However, with time, these misconceptions will find their way out and turn the skeptics of the technology into its believers.

Blockchain and Bitcoin: The Root and The Tree

Every digital information must be recorded as well as distributed, this was the aim when blockchain was invented. This might be difficult to grasp in the first place. So let us discover and understand how the first application of blockchain technology actually started.

THE BACK STORY:

Stuart Haber and W. Scott Stornetta sketched the blockchain technology back in 1991 for the very first time for the implementation of timestamps without alterations. 

It was just 2 decades later when blockchain showcased its real-world application- BITCOIN in Jan 2009.

WORKING:

The protocol which Bitcoin used was built on Blockchain. Pseudonym creator of Bitcoin SATOSHI NAKAMOTO introduced it as “a new electronic cash system that’s fully peer-to-peer, with no trusted third party”, in the white paper published by him.

Unlike fiat currencies which are regulated and authenticated by a central authority, usually a bank or government, the cryptocurrencies (like BItcoin in this scenario) are regulated and authenticated by a network of computers called Nodes.

Each time a person spends his/her Bitcoin to buy a commodity the computers on that Bitcoin network authenticate his/her transaction. At that time the user runs a program in order to solve a mathematical problem known as a hash to get his/her transaction verified on the Bitcoin network.

As soon as the hash problem gets solved, the algorithm simultaneously authenticates the block’s transactions. After that, the transaction is recorded publicly and stored as a block on the blockchain. Once recorded on the blockchain, the transactions are unalterable.

The miners who work to mine the hash, get rewarded with cryptocurrency for successful validation. 

It is important to note that all the transaction details are publicly recorded on the blockchain but the user information is not. To conduct transactions on the bitcoin network, one uses “wallets”. The details of the owner of the wallet are not stored on the blockchain. To access this wallet, one needs to have its public and private keys. 

To learn more about Public Kry and Private Key, stay tuned for our next Blog, Public Key VS Private Key. 

BLOCKCHAIN IN A NUTSHELL 

Blockchain is basically an open secure ledger that helps in transactions between peers.

This makes Bitcoin’s blockchain as Bitcoin’s ledger. Today Blockchain has evolved and is efficient enough to cater even the smallest transactions across varied industries.

BITCOIN IN A NUTSHELL

Bitcoin is a cryptocurrency which was basically derived from the Blockchain technology.  The main purpose of its invention was to boost cross border transactions and to decrease the governments’ control over the transactions thereby simplifying the entire process, without any type of involvement from the 3rd party intermediaries. 

Although it is not formally accepted yet people across the planet are using it willingly for several kinds of transactions. The fact that unlike fiat currency it’s not tangible makes it intriguing.

Both Blockchain and Bitcoin are interrelated terms. While Blockchain is the technology behind Bitcoin, Bitcoin in itself is just one of the several things that blockchain can do. 

Let us take a few minutes to understand the key difference between Blockchain and Bitcoin:

  • Adaptability is one of the key differences between Blockchain and Bitcoin. While looking at Bitcoin one see something that is rigid and just focuses on cross border transactions. Whereas a Blockchain has evolved itself with improvement over the years and is now catering to a hoard of industries not limited to the financial sector. 
  • Bitcoin is used for cross border transactions and to decrease the charges as well as the time of that transaction. While Blockchain works as a distributed ledger that allows peer to peer transactions in a safe environment. Blockchain also makes the transactions public and promoted transparency. 

Blockchain And Bitcoin – Final Thoughts

Both bitcoin and blockchain have their own strengths. While Blockchain is the technology Bitcoin is based on; Bitcoin is the first and key element derived from a blockchain. In this digital age, it is certain that more and more people looking to get the advantage of bitcoin and blockchain. 

Bitcoin and other altcoins like Ethereum, Feelium, Litecoin, etc. are gaining prominence in cross-border transactions. But blockchain technology has more applications in different sectors like Banking, Cybersecurity, Music Industry and more

Sharding & its use in Blockchain

When we compare transactions of Visa and MasterCard with bitcoins and Etherum it is found that transactions on these coins are not fast enough for day to day transactions. That’s why the developers of blockchains and cryptocurrency are trying to improve the speed of transactions in the blockchain and Sharding is one such method.

The promise of immutable record and decentralization makes blockchain one of the extremely powerful innovative technology in recent years. The famous cryptocurrencies like Bitcoin and Ethereum are its most prominent applications. The  Fintech companies were also quick to understand the value it can offer outside cryptocurrencies. During recent months, multiple companies outside of Fintech have understood the value of the blockchain. They are working on disrupting the industry verticals they are in with the help of blockchain technology

For blockchain to be universal;  Scalability, Latency and Low Throughput issues need to be addressed. Most of the public blockchains have a very secure means of ensuring data integrity. There is no possibility of deletion or modification in existing blockchains. In a permissionless public blockchain environment, Blockchain can only be updated by the addition of a new block and any computer in the network can do so. This all can be done with the help of a consensus mechanism. 

Proof of work(POW) algorithm mechanism is the widely used consensus mechanism. Hence a miner(a combination of powerfully designed hardware, special-purpose software and their user), can add a new block that too only after solving a complex cryptographical puzzle. A miner has to complete a large number of crunching operations at high speed, in a competitive environment and the POW algorithm requires the majority of the participating nodes to approve this transaction.

In a decentralized network, no one can steal the computing power of the majority of the nodes, making stealing blockchain economically non-viable. While the entire information on every node on the blockchain and the POW consensus algorithms make blockchain very permanent and secure. The design principles also impact scalability and transaction throughput adversely. As blockchains grow with a higher number of transaction there is an increasing node on each node. The increasing nodes and their participation in transaction validation makes the transaction process really slow. 

Sharding: Solving issues of scalability, latency and transaction throughput in Blockchain

Sharding is a concept used widely in databases, to make them more efficient. A shard is a horizontal portion in a database, with each shard stored in a separate server instance. This helps divide the load and make the database more efficient. In a blockchain, each node will have only a part of the data on the blockchain but not the entire information when sharding is implemented. 

To keep the decentralization in a shard, a shard maintains information only on that shard in a shared manner. Since each node doesn’t load the information on the entire blockchain, this helps in scalability.

Now, since each node will have information of only a shard that it belongs it. It will not feasible for that node to be involved in validating the entire transaction using PoW consensus. This is where Blockchain that uses Sharding adopt PoS algorithm. PoS refers to Proof of Stake which means that the designated nodes in the network have the responsibility to validate that transaction. These designated nodes are known as ‘Stakers’ because they keep some of their crypto tokens as stake to validate the transaction. Upon the transaction validation, the Staker may earn part of full of its transaction fees. Here, the more a Staker keep at stake, the longer will be the duration and the node gets to validate a higher number of transactions. 

PoS has the following advantages over PoW:-

  • The transaction is validated by Only designated nodes and not the entire network;
  • There’s no mining, hence, expensive special-purpose hardware is not needed, besides when the energy requirements are low;
  • It’s easy to identify validators with high loyalty by identifying the ones who have staked higher crypto tokens and have a longer duration.

Hence, PoS proves more fruitful when Sharding is used in Blockchain. 

Usage & Scope of Sharding in a Blockchain

Sharding is a somewhat new concept in the blockchain. Some projects that integrated the sharding concept include Shard Coin (SHARD). Telegram Open Network(TON), a potentially important project which was in the private token sale phase, has plans of using sharding to ensure the higher speed of transactions.

Sharding’s wider adoption requires the blockchain and crypto developers to work on an important aspect. While the communication between nodes within a shard is smooth,  the inter-shard communication is currently not an easy task and requires the development of a separate protocol. To address this key requirement will potentially result in wider adaption of sharding, and in turn, will help blockchain expand its scalability and have a higher transaction throughput.

Block Size, Explained

A block is just like a cluster of transactions, where each transaction needs to be validated before it is accepted by the network.

This blog is going to show you what exactly is block size, issues that arise in the absence of block size and the solutions to resolve them. 

Curious to know more, read the complete blog below:

What is a Block and a Block Size?

A block consists of any file in which data pertaining to the most recent transactions is recorded permanently on a network.  

Whereas one can understand block size as the highest limit of information that a block can store.  These transactions are added to the blocks after getting validation from the miners. The blocks are then further added to the blockchain. 

Now it’s the Miners who actually get to choose how much of a block can they want to fill with transactions. However, if anybody tries to fill the block with information that exceeds the block size limit, it is automatically rejected by the network.

Why Block Size was created in the first place?

The intention to create the block size was to counter with the “denial-of-service attacks” on a network. In theory, if there is no block size limit, an attacker can potentially bring the system to a halt by overloading the network with information. 

The block size limits the number of transactions a blockchain network can process per second. Thus, it restricts the network’s ability to scale. When a block is filled, the network can become congested and can lead to a hike in the transaction fees.

What are the issues that arise in the absence of Block size?

Ther major issues that a network can face due to a lack of defined block size includes:-

  • A slowdown in the network
  • Higher transactions fees

A slowdown in the network:  The lack of a defined Block Size can cause a slow down in the network. It could be due to the excess information that is getting added to a single block. Considering the fact that the block size remains consistent and there is an increase in the number of users transacting on the network, this will result in a slowdown of the network.

Higher transaction fees:  Ad transactions increase and reach near the block size limit, it becomes a race to get their transactions approved and on the blockchain for the users. One way to ensure this is to pay higher transaction fees. The miners get an incentive to add the higher fee transactions on priority to the blockchain. This means that the smaller transactions ones will have to wait for hours or even days to just get their transactions confirmed. 

So What Are The Solutions for these issues?

To tackle these issues of potential attacks, network slowdown, and higher transaction fees, we can consider the following solutions:-

  • Increasing the block size- One simple and obvious solution is to simply increase the block size. However, the drawback which comes along with it is that by doing so, it encourages centralization.
  • When you simply increase the limit of a block size, you also increase the cost of running a full node on the network, which not everyone can afford. This, in turn, will result in the centralization with fewer people in the network.
  • Segregated Witness (SegWit) SegWit is a Soft Fork Method, that is used to increase the capacity of a network by removing the signature data of transactions. When certain data on a block is removed, it frees up space for more data. A soft fork is just a method of upgrading the blockchain by backward compatibility. 
  • Dynamic block size– Cryptocurrencies like Monero are successfully using the dynamic block size limit. This refers to the block changing its limit as per the volume of transactions at any given time. This makes the blockchain network less prone to a slowdown. 

Concluding, we can say that, cryptocurrency space is continuously growing and scalability is an important factor to consider. To prove itself to be a potential replacement of the current financial system, cryptocurrencies need to analyze how they are scalable in the long-run.

The Second Wave vs The First Wave of Fintech

Fintech as a term described in Wikipedia is as follows, “FinTech is the new applications, processes, products, or business models in the financial services industry, composed of one or more complementary financial services and provided as an end-to-end process via the Internet.”

Financial technology is an industry in itself, offering disruptive alternatives for the delivery of financial services. Over the past years, fintech has been a magnet for investment, and it has changed the way that people and institutions transact and interact with each other. It has provided people with a valid and reliable exchange platform.

The first wave focused on fintech startups, providing new ways of doing existing things more efficiently that aimed to supplement large financial institutions. Initially, the first wave focused on Business-to-Consumer (B2C) interactions in the banking sector, in the areas of payments, banking, lending, and securities. Fintech is aimed to reshape the banking industry. Disruptive entrepreneurs use software to create radical new services so as to lure customers away from the traditional banks. The goal was to reinvent finance.

Whereas the next wave of fintech is going to bring greater collaboration and partnership between technological and institutional companies. It is going to extend its impact into other areas of the fintech industry, such as alternative investments, that did not receive much attention in the first wave.

Why do fintech companies want to collaborate with the companies that they were supposed to destroy? There are various reasons for why collaborating is a huge trend in the fintech industry. Firstly, the partnership model gives fintech companies instant access to customers and secondly, it provides them with the capital and expertise of banks.

Fidor Bank is one such bank, involved in the partnership movement. It was launched in 2009 as an online-only retail bank, offering radical options such as bitcoin banking, whereas today Fidor has almost 30 partnerships with fintech companies.

“The reason we are in the second wave is that people realized that you are not going to own the whole value chain”

– Jennifer Hansen, Saxo Bank

Small Businesses are the Next Focus of Fintech Wave

The war for fintech dominance in the consumer market is still going on, but a new battle line is emerging as they set their sights on small businesses. As of now, the fintech startups are focusing more on the consumer market, changing the way people bank, borrow, invest and pay for purchases, but they are also eyeing the small business markets.

The next wave is focused on helping small businesses manage their cash flow. It is a huge opportunity for the fintech, since many big banks are reticent to lend money to these small and risky enterprises. That presents fintech as an opportunity to fill an unmet list of needs and do it at a lower cost of customer acquisition.

In comparison to the first wave of fintech, the next wave promises to be more cooperative and collaborative, rather than disruptive of traditional ways, and more broad-reaching. As a result, it will be even more impactful and transformative than the first, and use of innovation and technology are already beginning to bear fruit.

Applications of Blockchain in the Field of Cybersecurity

We have got used to hearing about new and innovative projects with blockchain as the underlying technology. Whether it is an online marketplace or green energy blockchain technology is everywhere these days.

Cybersecurity and Blockchain Technology

Cybersecurity is becoming a pressing problem due to the unreliable nature of today’s world wide web. Cybersecurity alone costs approximately $450 billion per year to the global economy. Blockchain has a lot of potential to restructure the way cybersecurity plays out its part.

Nick Bilogorskiy, Cybersecurity Strategist at Juniper Networks, said, “Blockchain has plenty of genuine use cases, for example, decentralized storage, preventing fraud and data theft, and distributed public key infrastructure for user or device authentication.”

Let’s look at what problems in cybersecurity is blockchain technology tackling right now?

Multi-Factor Authentication

Deliberate Denial of Service (DDoS) attacks are quite common threats when it comes to cybersecurity. DDoS attacks are widespread and rampant due to the existing DNS (Domain Name System). If the creator of data holds complete data in just one location which is centralized, then it becomes infinitely easier to hack and manipulate. Data security offered by blockchain’s decentralized structure can help distribute information via nodes, due to which systems will become impossible to hack virtually.

A blockchain Technology based security startup, REMME, is making attempts to prevent cyber attacks such as DDoS on large and small companies. Blockchain ensures that there remains no room for any errors, and the easy to hack into one-step password system which are so widely used is taken down by introducing multi-factor authentication.

Improving Security of IoT

A major threat to device security is a big roadblock in the IoT industry. A research by Gemalto highlights the fact that 96% of companies and 90% of consumers using or working with IoT devices believe that they aren’t secure and they should be better regulated. The main concern for most people is that a hacker can take control of any device and their personal information without the data security of blockchain

IBM is leading with innovations in IoT with blockchain technology. IBM’s Watson IoT Platform allows IoT devices to transmit files to blockchain based ledgers which will ensure that data is shared through records and transactions which are completely tamper-resistant and are validated via smart contracts.

Filling Talent Gaps

There is quite a lot of talent shortage, especially in cybersecurity industry. Unemployment in the cybersecurity industry is almost negligible with constant challenges of the emerging tech and greater threats. Firm, Frost & Sullivan predicts around 1.8 million vacancies in the industry.

PolySwarm, a blockchain based antivirus marketplace, incentivizes cybersecurity experts from across the globe to work towards fighting cybercrime. This gives bright talents an opportunity to shine, despite their location, education, and history, and help detect cybercrime faster.

Which other fields within the cybersecurity industry can blockchain technology be applied to? Comment below and let us know.

Top 3 Blockchain Friendly Countries

The blockchain buzz is spreading across the globe. The adoption and research rate of  ‘blockchain’ has grown vastly in a very short span of time. Blockchain technology will soon reshape the world around us with its outstanding features such as global accessibility, transparency, safety, and security.

Despite the fact that it has been around a decade when blockchain was first brought in the limelight, very few nations have started to investigate its huge potential. However, the adoption rate has encountered a colossal ascent ever since the beginning of 2018.

Utilization of this innovative technology can widely influence the lives of individuals, how they trade and how sectors such as governance, finance, education, etc. function. Its tremendous potential is the reason it is being embraced so rapidly by various nations.

Here are the top 3 blockchain friendly countries that have adopted blockchain till now:

Switzerland

Switzerland is a step ahead of all the other nations when it comes to adoption and implementation of blockchain and cryptocurrency related projects. Various blockchain companies have found Switzerland as one of the most accommodating nations, especially Canton of Zug, which is now renowned as the Crypto Valley. Facebook most recently registered ‘Libra Networks’, its secret digital assets project, in Switzerland (read more about the project here). The country has even made headlines for bringing about a regulatory framework for ICOs (Initial Coin Offerings).

Swiss bank, Hypothekarbank Lenzburg, recently announced that it soon will allow few selected blockchain and crypto asset related businesses to open accounts with the bank, which would make Switzerland even friendlier to the crypto sector. Cryptocurrency have officially earned the label of foreign currency in the country and no taxes related to capital gains are yet levied on most of the crypto traders in the country.

Estonia

Estonia has been a relatively familiar face in the blockchain technology space since 2008. Blockchain has taken a major role in Estonia’s data registries, in fields such as the commercial code systems, judicial, security, legislative and health. The country is planning to extend the use of blockchain technology to other areas such as cybersecurity, data embassies and personal medicine.

Malta

Popularly known as the “blockchain island”, Malta has become the very first country to set up a decentralized bank and stock trade. Cryptocurrency, blockchain, and fintech related adoption has shown exponential growth on the island over the past few years. Malta is now willing to set up a formal regulatory framework for digital currencies, initial coin offerings and firms dealing with blockchain.

Conclusion

There are various other countries that are getting more and more involved in the sector and are themselves making tremendous efforts to grow further in this sphere. Additionally, there are numerous aspects related to blockchain and cryptocurrency adoption, such as regulation of cryptocurrency exchanges, ICOs, and adoption amongst the enterprise level companies and banking consortiums that these countries are working upon. The blockchain technology is currently booming and will soon impact various sectors.

Did you find the blog informative? Your opinion matters! Let us know about them in the comments below.

Blockchain Technologies Achieve a New Legal Victory: Washington State Recognizes DLTs as Legally Valid

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The past week has been remarkably positive for the blockchain ecosystem. With a strong bullish trend in the market indicating a positive sign, the DLTs scored a new victory, this time in the legal arena, thanks to the decision of the state of Washington to advance on legislation that officially recognizes the legitimacy of distributed ledger technology.

According to information published by the Washington State Legislature, earlier this year, Senators Brown, Rivers, Becker and Short introduced the bill SB5638 which was defined as “an act relating to recognizing the validity of distributed ledger technology”.

The bill passed with 46 votes in favor, 0 against, 2 absentees and 1 excused. However, in its second discussion on April 15, 2019, the -substitute- initiative obtained an almost perfect majority with 96 votes in support, 1 vote against and 1 excused.

The law seeks to combat mistrust towards DLT-based networks and technologies related to blockchain:

The legislature intends to encourage the development of distributed ledger technology. It further intends for this chapter to comply with 15 U.S.C. Sec. 7002 and here makes specific reference to chapter 96 of Title 15 of the United States Code …

An electronic record may not be denied legal effect, validity, or enforceability solely because it is generated, communicated, received, or stored using distributed ledger technology.

 

Good Times for Blockchain Technologies

Blockchain developments are in the limelight in numerous areas, which indicates that the future of these technologies will probably dominate several important aspects of everyday life. If we consider the legal point of view, in America, blockchain technologies have gained the recognition of several legislators. In fact, in some states, the adoption of cryptocurrencies and blockchain technologies is increasingly accepted as a mode of payment.

Two months ago, in Tennessee, legislators signed a bill that recognizes the legal validity of Smart contracts and blockchain technologies in general.

Likewise, Ohio now lets its taxpayers use cryptocurrency as means of payments and recently its legislators signed a series of crypto-bills that gave users the possibility of using a blockchain as a means of evidence, or commercial exchange.

The United States is not the only country that advances towards the consolidation of technologies, even countries such as Russia and China have also shown important signs of progress in the recognition of blockchain tech as licit mechanisms for testing and exchanges.

in 2018, China’s Supreme Court recognized blockchain records as legally binding and as a piece of legal evidence in case of disputes.

What are your views about blockchain and this new legal victory? Let us know in the comments section.

How blockchain can transform economy?

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It has been a noted observation that blockchain has the power to transform the financial system by upending credit cards, manufacturing and voting industries.

If you have heard the term blockchain in the past decade, you might have heard it in context with Bitcoin. Also, if you are a regular update person, you must know that blockchain is some kind of a database and that a lot of very smart financial people and tech types are looking into it.

What is blockchain?

The first time anyone heard about the term blockchain was in 2009 when a group or a person Satoshi Nakamoto published a paper entitled, “Bitcoin: A Peer-to-Peer Electronic Cash System.” This document describes the basis for a cryptocurrency called Bitcoin, and it defined how a new type of database called a blockchain would store Bitcoin’s transactions.

In a blockchain, a set number of transactions are placed in a block. When a block is filled up, it is “signed” using a mathematical formula that factors in all of the block’s transactions, and generates a unique signature called a hash.

When the next block of transactions fills up and is ready to be signed, the hash from the previous block is mathematically factored into the new hash, and so on. This is reflected in the chain part of blockchain’s name.

Security

Blockchain has a unique hashing system which gives it very high security. If the data of one block is changed, the hash signature for that particular block will also change.

This implies that if the data is tampered with, the hash signatures for every subsequent block will have to change as well. This high level of security means that the blockchain can be completely open to the public.

The blockchain network is maintained by various decentralized entities known as nodes. A blockchain node’s job is to validate blocks. When a new transaction block is created, each node on the network validates the new block by calculating its hash signature.

Every node compares its result with all the other nodes on the blockchain network. If a majority of the nodes have computed the same hash signature, the block is accepted as valid and placed in the blockchain.

However, if the nodes suggest that the block does not have a valid hash signature, the block is simply thrown away. This system makes it extremely difficult to place a fake entry into a decentralized and public blockchain.

Use cases for blockchain

Let us consider the example of credit cards. When you go to a mall, select a thing, and make payment through your credit card, the card accepts your request. The money does not get deducted from your bank account. The bank takes care of it. After a cycle of 30-40 days, you need to pay the bank back. If you are unable to do so, the credit card company charges you interest on the unpaid balance.

Blockchain has the ability to eliminate the credit card companies

A look at the above transaction as described above only from the blockchain perspective is much different. You go into your local store and make a purchase using Bitcoin or another cryptocurrency.

The transaction is validated by a blockchain node and it is fed into the blockchain. Your bank account is debited, and the merchant’s account is credited. The merchant isn’t charged a percentage of the purchase price, and you aren’t charged any interest on the unpaid balance.

As we can say, credit card companies aren’t happy about this possibility.

Blockchain and cross -border payments

Sending money across national borders anytime can be both time-consuming and expensive. We all know that an international wire transfer can take up to five business days to settle, and the newer SWIFT network can take up to three business days to transfer. In the United States, an international wire transfer can cost between $40 and $50.

Veem is a start-up company that took advantage of this and used blockchain as one of its methods for transferring funds. Consider a client based in the U.S. who wants to transfer money from their U.S. bank account to an account in Mexico.

Veem debits the specified amount in U.S. dollars from the client’s bank account, and it buys that amount of Bitcoin. Then, Veem sells the Bitcoins for Mexican Pesos, and it deposits the Pesos into the Mexican bank account.

The best feature is that the entire sequence of transactions takes place within seconds, and is fully traceable through Bitcoin’s blockchain. Also, the fee charged for this type of transfer are less than half of what an international wire transfer would cost.

Blockchain for voting

An important potential use for blockchain is voting. A blockchain transaction doesn’t have to be numerical credits and debits, but can be any piece of data.

Blockchain could be used for voter verification so that when a voter cast his or her ballot, that information is written to a publicly-maintained blockchain database that everyone has access to.

This database can easily be used to verify the election’s results, thus eliminating rigged elections.

Blockchain for supply chain and logistics

In today’s world, one of the most difficult aspects of modern manufacturing is the supply chain. A finished product might be comprised of components manufactured in China or North America, software created in Europe, and the product itself might be assembled in Japan.

Delays, miscommunications, and outright disputes often arise among the various parties, and this leads to slow-downs and unreliable supply chains. A blockchain database can hold every transaction involved in the manufacturing of a product, and it can hold every entity accountable.

Consider an auto part which is manufactured in China, and is added to the blockchain. When that part ships to Europe for assembly in a car, that movement is fed to the blockchain and is timestamped. Every time that auto part moves or is incorporated into another product, an entry that everyone can see is created in the blockchain.

If there is a time delay anywhere in the world, all of the interested parties can know exactly where and who caused the delay. Supply chain blockchains could also be used to analyze inefficiencies and redundancies within a supply chain, and this would dramatically streamline the product manufacturing process.

Talking about Satoshi Nakamoto, to this date no one is sure about who he, or she really is. It is a mystery whether Nakamoto is an individual or a group of people. The Bitcoin blockchain shows Nakamoto as the owner of approximately one million Bitcoins.

At Bitcoin’s price peak in December 2017, this was worth over the US $19 billion, making Nakamoto the 44th richest person in the world at that time. To date, none of Nakamoto’s Bitcoins has ever been redeemed.

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