Tag: Blockchain

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Crypto Daily Topic

How Decentralised Finance is Redefining the Banking Industry

In the last few years, the concept of decentralization has gained a lot of attention across all industries. This has been fuelled by the entry of blockchain technology, which has supported the growth of numerous cryptocurrencies. 

In the last few years, the concept of decentralization has gained a lot of attention across all industries. This has been fuelled by the entry of blockchain technology, which has supported the growth of numerous cryptocurrencies. 

In the last few years, the concept of decentralization has gained a lot of attention across all industries. This has been fuelled by the entry of blockchain technology, which has supported the growth of numerous cryptocurrencies. 

Decentralized finance, in particular, has become a widespread concept driven by the public’s disillusionment with the centralized financial system. This is especially true given the alarming rate of cyber-attacks, which often leave individuals at risk of financial loss and personal data exploitation. 

Besides privacy concerns, decentralized finance has the potential to extend access to financial services to the 1.7 unbanked population. It faces fewer barriers than traditional banking services, prompting start-ups to take up open source finance to bridge the existing market gap. 

What makes Decentralised Finance a Better Choice

Decentralised Finance (DeFi), is an ecosystem of financial solutions built on top of a blockchain network. At their core, these solutions bring in the permissionless and transparent nature of blockchain into the financial industry. This means that users are given absolute control of their assets and can interact with other users through peer-to-peer transactions, thereby eliminating the need for a central authority. As a result, financial services become more affordable and frictionless compared to traditional banking services. 

Additionally, unlike centralized financial services, DeFi doesn’t require complex infrastructure to reach the general public. In fact, as the internet penetration rate increases, so does DeFi become accessible to everyone since it’s internet-based. 

Decentralized Finance Use Cases

There already exist several solutions that provide open-source financial services. These solutions fall in 4 major categories: 

i) Borrowing and Lending

Open source borrowing and lending services are the most popular application in the decentralized finance ecosystem. Thanks to the lack of a central authority, these solutions make borrowing and lending affordable, faster, and more accessible. In some cases, your credit score may be overlooked, especially when you agree to collateralize your digital holdings. 

ii) Monetary Banking Services

Decentralized finance is fintech applications offering monetary banking services. This means that the applications can serve as issuance platforms. Currently, most DeFi applications focus on the issuance of stablecoins, insurance mortgages, and securities. 

By offering stablecoins, DeFi applications contribute to the maturation of the blockchain industry since the stablecoins are less volatile. This makes it possible for the coins to be used by merchants and investors as a store of value. 

DeFi’s entry into the mortgage and insurance market has helped eliminate the role of intermediaries. This has reduced the underwriting and legal fees in the case of mortgages. At the same time, it has helped lower the cost of premiums in the insurance market by spreading risk among the parties involved. Also, DeFi applications make it easy for companies and businesses to launch and issue tokenized securities to investors. Other platforms allow the creation of blockchain-based derivatives and synthetic assets, contributing to the growth of the financial industry as a whole.

iii) Decentralized Marketplaces

Decentralized marketplaces are relatively new in the industry, as evident from their limited share of the market. However, as more people come to appreciate anonymity and privacy, decentralized marketplaces will rise in popularity. 

These marketplaces are peer-to-peer platforms that allow users to trade assets without the need for a trusted intermediary to hold their funds. All trading transactions are automatically executed by smart contracts. As such, they have lower trading fees and require less maintenance compared to their counterparts. 

iv) Payment Processing

Sending payments, especially across borders, has long been a major pain point for business and those working overseas. The biggest problem facing these transactions is the expensive amount of fees charged by banks and traditional payment processors for sending remittances. 

With the likes of the Stellar blockchain leading the way, DeFi is committed to making cross-border payments more affordable. In turn, businesses will extend their market outreach now that they can accept payment from customers across the world. 

Why Hasn’t Decentralised Finance Skyrocketed?

Given the numerous advantages of DeFis, one would expect it to have gained massive usage. Unfortunately, this hasn’t been the case – based on the 25 million cryptos users against the 1.7 billion unbanked population. This is due to the following challenges:  

  • Scalability 

Scalability has been the biggest problem facing the entire blockchain industry, and decentralized finance applications are no exception. Currently, DeFi applications can’t process as many transactions as traditional financial services can. For instance, Visa can process about 24,000 transactions per second, which is way more than 15 transactions processed by Ethereum DeFis in one second. If decentralized finance applications and the blockchain industry, in general, is to appeal to the world, then developers must work on improving the bandwidth to handle more transactions. 

  • Technical Risks

In their simplest form, DeFi applications and the blockchain network are pieces of software. As such, they are prone to bugs and hacks undermining their growth. A good example is the Ethereum blockchain, whose ERC-20 standard is plagued by constant bugs that render applications built on it inefficient. Also, there have been several DeFi applications that have been hacked, creating uncertainty among crypto enthusiasts. 

  • Manipulation

Since DeFi applications are currently unregulated, the market remains vulnerable to manipulation. In the traditional banking industry, manipulation is almost impossible thanks to the strict monitoring and regulations put in place by authorities. 

The most common practice is the manipulation of price feeds, also known as oracle manipulation. Oracles, in this case, refers to third-parties that supply blockchain with a particular type of data. For example, the Ethereum blockchain doesn’t determine the price of ETH. The price is determined by oracles, such as exchanges. 

Oracle manipulation occurs when a DeFi app uses only one or a limited number of exchanges as the only source of data. This means that traders can trade large amounts of cryptos to sway the price movements, thereby manipulating the information provided by the oracle ( exchange).

Conclusion

There’s no doubt that decentralized finance is set to become the future of the financial industry. But for it to mature and appeal to all stakeholders, decentralized finance needs to mitigate the hurdles hindering its growth. Moreover, DeFi applications are working independently of each other, which fragments the market. Perhaps if they were to work harmoniously, some of the problems facing the industry would be solved. 

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Crypto Guides

Understanding Social Scalability & the Tradeoffs in Cryptocurrency

Introduction

Introduction

Introduction

Taking time back to over 70,000 years ago, there were about 6-10 species of the genus Homo. In them, Homo sapiens prevailed over all other species. In fact, they overcame Homo neanderthalensis, who were supposedly physically stronger than humans. The vital difference was the ability of Homo sapiens to form groups and coordinate together in activities. Hence, a coordinated group of Homo sapiens could beat away a stronger individual either through directly fighting or by taking control of scarce resources indirectly.

This prevailing nature of Homo sapiens was explained by a researcher Nick Szabo who is called the ability to coordinate as social scalability. Increased size in the group leads to better coordination between increasingly large groups. The brain of Homo sapiens has been able to invert other external structures that increase social scalability.

 (Picture Credits)

Social Scalability & Its Impact

The evolution and advancements in technology have decreased the vulnerability to other participants and intermediaries. However, Language is that traditional technology which has increased the social scalability between people as it has allowed humans to communicate with each other.

The essential component of social scalability is trust minimization. The modern legal system has drastically increased the social scalability because it meant a scenario where any person could enter into contact with anyone else, and not having to develop any personal relationship with it.

One ideal example of the same would be matchmaking through online rating systems. Below are some instances which you could relate to:

Amazon: Matches manufacturers and consumers

Uber: Matches best drivers and riders

Airbnb: Match tourists and homeowners with spare rooms

The rating system significantly reduces trust in each transaction. After booking a Uber, I don’t need to do a background check of the driver because I trust them from the several reviews of the riders saying that the driver is safe and reliable.

Blockchain, too, has the potential to minimize trust and increase social scalability. This could be possible from the widespread application of capital and markets. As per history, the amalgam of money and markets have helped reduce transaction costs through the following ways:

Matchmaking – Bring buyers and sellers together

Trust minimization – trusting in self-interest instead of the unselfishness in strangers

Scalability via money – A wide acceptance and reusability medium for counter-performance.

Bitcoin and the Tradeoffs

In 2009, “Satoshi Nakamoto” created something which can be described as the most socially scalable money that had ever been created. It was called Bitcoin, powered by blockchain. Instead of having a so-called trusted intermediary, they created a currency that relies on a decentralized group of middlemen. Cryptocurrencies have the ability to substitute a mass number of computers for an army of financial intermediaries. As their features, they have a high level of security and reliability without the help of human intervention.

To scale up the social scalability via globalization, scaling human institutions was necessary. An increased number of accountants, lawyers, regulators are required. More human cognitive capacity is required to monitor the transactions. But, scaling up cognitive capacity is not possible by humans. Computers were the ones that could do this.

However, in computer science, there are tradeoffs between security and performance. For instance, the security needed to make cryptocurrency socially scalable requires a very high price as electricity is used for mining. Cryptocurrency sacrifices computational scalability to increase social scalability. The inefficiency in computations (electricity and high power usage) enable its social scalability (the ability of parties to make transaction across national borders).

As the cost of computational power is dropping, and the human capacity has remained static, the tradeoff is getting more beneficial.

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Crypto Daily Topic

How to Create an Effective ICO Marketing Campaign

ICOs have revolutionized the way startups raise funds for their projects. Generally, it involves the selling of a company’s token in exchange for fiat currency or even popular cryptocurrencies such as Bitcoin and ETH. 

ICOs have revolutionized the way startups raise funds for their projects. Generally, it involves the selling of a company’s token in exchange for fiat currency or even popular cryptocurrencies such as Bitcoin and ETH. 

ICOs have revolutionized the way startups raise funds for their projects. Generally, it involves the selling of a company’s token in exchange for fiat currency or even popular cryptocurrencies such as Bitcoin and ETH. 

While the funds raised through ICO campaigns have declined in the last few years, it doesn’t mean that it’s impossible for your project to achieve its financial goal. To a larger extent, the success of your ICO project depends on the effectiveness of your marketing campaign. 

Interestingly, the same marketing tools used in conventional advertising campaigns are also used in promoting an ICO project. The difference is in the way you use the tools. As such, an effective ICO campaign is one that seeks to inform investors of the benefits of the project and its contribution to the blockchain network. Here is how to do an effective ICO campaign.

1. Research on Your Market

It is anticipated that blockchain will find its way into all major industries improving their operations as a result. But, this blockchain takeover is still in its infancy, and as of now, not every company can embrace ICO. 

So, before planning for an ICO marketing campaign, you need to ascertain whether integrating digital tokens into your business model brings any value. You may consider trying the IPO route if digital tokens aren’t suited for your startup. 

If indeed ICO adds value to your product or service offering, you also have to do more market research to find out if what you intend to offer is on demand. Usually, demand arises from the scarcity of a product in the market. Ideally, your offering should be unique to bridge the market gap and eventually create demand. 

2. Define Your Audience

A streamlined marketing approach works better than a general approach. It may seem counter-intuitive since marketing is all about getting your product out there to as many people as possible. But a wide approach means that you may end up marketing to people who are not interested in your offering in the first place. 

On the other hand, narrowing down your marketing campaign to the right audience will certainly win you more investors. 

You could start by identifying the personas of your ideal investors. Gather relevant information about then including their pain points and how your offering stands as a solution. To achieve this, you need to leverage existing cryptocurrency communities spread across various social media platforms. Most importantly, try and connect to those who are in the same industry as your offering.  

3. Tailor your PR and Media Outreach

In the course of your interaction with the crypto-community, you’re likely to meet two distinctive audiences. The first are those with an extensive understanding of the digital currency while the second group are those who aren’t crypto savvy but understand the potential of blockchain technology. 

It is your responsibility to build a comprehensive media and public relations outreach that address both groups of potential investors. As such, the content you publish on your website and social media platforms should offer deeper analysis and insight to cater to the audience who are well versed in the digital token market. At the same time, make sure you include basic information and guides for those with a limited understanding of the market. 

4. Create a Winning Whitepaper

Your project’s whitepaper is one of the surest ways to connect to your audience. It’s a marketing tool by itself that attempts to convince investors why they should stake their funds in your company. The idea here is not to oversell your project idea but rather to win the investors’ trust. 

Essentially, a good whitepaper should consist of the project’s outline with emphasis on its place in the current market. This will help investors examine if your solution stands out from the rest of the competitors in the market. Serious investors will stake in unique projects that demonstrate the resilience to survive in the market. 

You should also state the exact amount of money you intend to raise and how the funds will help achieve certain milestones of the project. This can be captured perfectly by designing a roadmap detailing the timeline of the project development. 

A whitepaper wouldn’t be complete without the project’s team section. Despite the fact that the section appears at the tail-end of the whitepaper document, it adds credibility and legitimacy to your project. So, it’s a good idea to have reputable professionals in your team to back up your project. Ideally, the team members should have had some success in the blockchain domain to demonstrate their authority on the subject. 

5. Partnerships and Active Involvement in Blockchain Events

Forging partnerships with other startups is a marketing tool that is often overlooked by most ICO projects. This is mainly due to the fear that one party may overshadow the success of the other party. However, if done right, partnerships can actually win you more clients in addition to contributing to the growth of your project. As such, it’s recommended to partner with a company that complements what you offer. For instance, if you are a fintech crypto startup, you can partner with a blockchain payment processor company. 

Also, active involvement in blockchain forums is a good way to get your ICO project known to the rest of the community. In these forums, you’ll not only interact with other potential partners but also investors and other interested parties. 

6. Create a Bounty Program

A bounty program is a marketing strategy that uses incentive-based rewards to attract investors to your ICO. A good example of this program is airdropping. It entails rewarding some members of the crypto community with free tokens for helping spread the word about the ICO project. The free coins can be exchanged for other digital currencies or retained as an investment in the project. This is an affordable marketing strategy, especially if you can offer just the right amount of tokens to make the campaign effective. 

Conclusion

Promoting an ICO can be overwhelming, given the sheer amount of work that goes into creating an effective marketing campaign. But with the guidance of the simple tips above, it can be easier since you’ll have an idea of what to pay attention to when designing your campaign. 

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Cryptocurrencies

The Top 5 Smart Contracts Platforms

In its simplest form, a smart contract is a program that verifies and enforces the execution of a contract in a blockchain network. The concept was first proposed by an American computer scientist who is also credited for inventing the first-ever digital currency – Bit Gold. However, the digital coin was never implemented partly due to the ‘double-spending’ problem. 

In its simplest form, a smart contract is a program that verifies and enforces the execution of a contract in a blockchain network. The concept was first proposed by an American computer scientist who is also credited for inventing the first-ever digital currency – Bit Gold. However, the digital coin was never implemented partly due to the ‘double-spending’ problem. 

In its simplest form, a smart contract is a program that verifies and enforces the execution of a contract in a blockchain network. The concept was first proposed by an American computer scientist who is also credited for inventing the first-ever digital currency – Bit Gold. However, the digital coin was never implemented partly due to the ‘double-spending’ problem. 

With the advent of blockchain technology, smart contracts were given the ability to be immutable. This made it impossible for any party to copy or alter transactional data, thereby eliminating the double-spending problem as well as the need for intermediaries. As such, anonymous parties can engage in transparent and irreversible transactions without an external enforcement mechanism.

As the industry continues to mature, there have been multiple smart contract platforms available in the market, each with its own distinguishing features and functionalities. Although it provides diverse options to choose from, it can be overwhelming for new developers to choose the right platform on which to build their decentralized applications or exchanges.  

What Makes a Good Smart Contract Platform? 

Before we can look into some of the best smart contracts in the market right now, it helps to understand the criteria for choosing the right platform. 

To most developers and investors, the value of the underlying token is taken to be the ultimate indicator of a good smart contract platform. But considering the volatility of a token’s value, the price may not be a good indicator after all. If you are interested in a platform that is set to have a long-term future, consider the following factors: 

  • Number of Developers

For a smart contract platform to thrive, it needs to have a good number of active developers in its ecosystem. The number of developers can be equated to the public’s interest. This also helps enhance collaboration in the platform, which is beneficial to new developers joining the community.

  • User Experience 

When choosing a smart contract platform for your dApp, you want one that will make it easy for users to interact with the application easily. Some platforms require users to not only create an account but also hold a specific number of the underlying token. For dApp users who are already familiar with blockchain technology, these requirements may not be a problem. But for the average user, such requirements are an entry barrier. The idea here is to choose a platform with fewer technical requirements in order to attract a wide range of users. 

Best performing smart contract platforms.

1. Ethereum

Ethereum is one of the most popular smart contract platforms that allow developers to build decentralized apps through its Ether or ERC-20 tokens. The platform is powered by the Ethereum Virtual Machine (EVM), which is a software that executes all smart contracts. The platform functionality is further enhanced by its proprietary smart contract coding language, Solidity. This makes it easy for developers to not only set up contracts but also build blockchain apps. 

What makes Ethereum even better is that it has clearly published rules on how to develop smart contracts on the platform. This has made it the most preferred smart contract platform by reputable developers and even by a sizable number of fortune 500 companies. 

On the downside, however, Ethereum is vulnerable to security threats and bugs in its code. The platform has been quick to respond to these issues by designing new token iterations. But perhaps the biggest concern is the platform’s growing number of users. While this number has contributed to its large market cap, developers worry that it may work against the platform by slowing down the processing speed of contracts. 

2. EOS

EOS is gradually winning the attention of the crypto community thanks to its near-zero transaction fees topped by the ability to process numerous transactions within a second. To achieve this, the platform works on an ownership model whereby you are entitled to resources proportional to your stake. This also means that your total computational power is equivalent to the number of tokens you hold. The higher the number of tokens, the higher the computational power, translating to fast transaction speed. 

Contracts on the EOS platform are coded in the C++ language, which helps improve scalability. The contracts are then implemented into the blockchain in the form of a pre-compiled coding language known as WebAssembly (WASM), which promotes faster execution of contracts. 

Given its architecture and functionality, EOS is suited for building industry scale dApps. If you were to build such applications on a platform such as Ethereum, running it would be overly expensive owing to the transaction fees charged on each function. 

3. NEM

NEM is both a peer-to-peer cryptocurrency and a smart contract platform. It uses Java programming language, which makes it popular among many users as it is the most widely used language. 

The platform mainly focuses on scalability and security, as evident from its recent updates. The platform can handle about 100 transactions in a second, which is much higher than Ethereum, which only processes a maximum of 15 transactions per second.  

The only drawback of using NEM is that it employs smart contracts off the blockchain making it less decentralized. However, the platform offers better security, easier updates, and fast execution speed as a consolation prize. 

4. NEO

NEO is a relatively new smart contract platform based in China. The platform uses a Proof-of-Stake consensus mechanism alongside the Byzantine Fault Tolerance algorithm – which uses less computing power, making the platform more affordable than Ethereum. 

In terms of user-friendliness, NEO scores highly owing to its ability to execute contracts written in any programming language. So, a developer isn’t limited to writing contracts in one specific language, as is the case with other platforms. 

5. Stellar

For simple, smart contracts such as ICOs, Stellar is the ideal platform to use. It may not be as straightforward as NEM, but it’s more user-friendly than Ethereum. 

The platform has stood the test of time having been one of the oldest platforms in the industry designed to facilitate low-cost remittance transactions across borders. Its future was further cemented when the platform partnered with IBM and KlickEx, which have also contributed to its improved infrastructure. 

Stellar smart contracts can be written in all major programming languages, including those that the community provides an API for. The contracts are interconnected and executed using various constraints such as batching, multi-signatures, sequence, and time bounds. 

Conclusion

The success of your decentralized app depends largely on the platform it’s built on. While the above smart contract platforms are among the best in the market, your ultimate choice of a platform depends on the app you intend to build. Some platforms prioritize security over speed, so make sure the platform you choose is aligned to your goals. 

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Crypto Guides

The Best Emerging Blockchain Companies You Should Know

Introduction

Introduction

Introduction

The Blockchain technology that came into reality in 2008 didn’t really gain much attention back then. However, as Bitcoin began to skyrocket in 2017, many understood the working of cryptocurrencies and the technology behind it. Several technologists started to find a replacement from their current technology with blockchain, as they found it to be the next revolutionary tech.

In fact, more than 90% of the US and European banks are into researching blockchain options. They believed that this technology could revolutionize the finance, government, insurance, and personal identity security, and several other spaces. In this article, we have listed out some interesting blockchain-based companies that have great potential in the future.

SALT LENDING (Website)

Domain – Fintech and Lending | Origin – Denver, Colorado

As the name of the company suggests, this company is involved in loan lending. Salt’s platform allows its users to leverage out their cryptocurrency for cash loans. Borrowers can get cash loans by leveraging coins like Bitcoin, Ether, or even Dogecoin, for a period of 1-36 months. This platform is accessible in most US states and several countries. The loans began at $5000.

MYTHICAL GAMES (Website)

Domain – Gaming | Origin – Sherman Oaks, Calif. and Seattle

Mythical Games is an online platform that creates games and experiences that feature the ownership of digital assets. This is backed on the blockchain technology that allows the creation and verification of a clean record of ownership of unique digital assets. The first blockchain-based game, Blankos, was launched in 2019.

GEMINI (Website)

Domain – Fintech, Cryptocurrency, Trading | Origin – New York

Gemini is a popular digital asset exchange that facilitates users to buy and sell cryptocurrencies. It is a blockchain-based platform for trading of cryptos and for cybersecurity purposes. Individual traders and institutional investors can trade all the major cryptos, including Bitcoin, Ethereum, and Litecoin, via their platform.

CIVIL (Website)

Domain – Digital media Journalism | Origin – Brooklyn, New York

The company Civil was created with an aim to build sustainable journalism with the help of blockchain. With the company’s software, journalists can launch their independently operated newsroom. And this done through the company’s own CVL token. Since this journalism runs on the blockchain technology, the stories published can neither be edited nor deleted.

DOC.AI (Website)

Domain – Healthcare, Artificial Intelligence | Origin – Palo Alto, California

DOC.AI is a healthcare company that uses blockchain in addition to machine learning to make predictions on the personal health of people. Basically, this company combines all the patients’ records that are available by every medical source and compresses it into one secure app. So, users can manage all their medical records all in one place and also get predictive analysis on that data. They even get compensation for sharing their data for medical research.

And the list of companies goes on and on. Below is the list of some more blockchain-based companies that are doing pretty great in business and are expected to grow bigger in the future.

Circle | Celsius Network | Wax | Bloq | Tradove | Learning Machine | Oasis Labs | Chronicled | Lemonade | Voatz | Blockstack

That’s about some of the most popular companies that offer services that are based on blockchain. If you have any questions, let us know in the comments below. Cheers.

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Crypto Guides

Implications Of Blockchain In the Global Money Transfer Industry

Introduction

Introduction

Introduction

Fund transfers within the country are cheap and fast. But, transferring money from one country to another is typically slow as well as expensive. Presently, most international fund transfers are made using the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network.

Note that SWIFT is not the one that makes money transfers. Instead, it is a network that allows communication between financial institutions for a reliable and secure transfer. This is also the reason why several banks and financial institutions sue their services.

Traditional International Fund Transfer

A transfer via SWIFT technology usually takes several days to be completed. To understand how these transfers work, let’s consider a fund transfer from a US company to a supplier in China.

1️⃣ The US company would send an order to its associated bank to make a transfer to the Chinese company.

2️⃣ Assuming it is a local bank, it would not have access to make international financial markets. So, the local bank approaches a correspondent bank in the US that acts as an intermediary.

3️⃣ The American correspondent bank would then initiate a transaction to the bank in China. If this Chinese bank is not a correspondent bank, it will approach a correspondent bank to receive its payment.

4️⃣ Once the payment is received by the Chinese correspondent bank, it will locally transfer it to the supplier’s bank.

This completes a transaction between the two countries. It can be clearly ascertained that there are many intermediaries for a single transfer. This would eat up a lot of time. And for making the transfer, certain compensation must be paid to intermediaries.

Blockchain into International Money Transfer space

A paper relating to payments using blockchain titled ‘Leading the pack of Blockchain Banking’ points out that several international financial institutions expect blockchain to have a major impact on their businesses. This paper was carried out by the IBM Institute of Business Value and the Economist Intelligence Unit, which accounted for a survey of 200 banks in 16 countries. In the outcomes, about 70% of these banks believed that blockchain technology would reduce the expense and time of international transfers.

As an initiative, several major banks from different countries joined to design a blockchain-based digital currency. Their primary aim is to create a cryptocurrency that would ease utility settlements using blockchain. The list of banks that put forth this initiative include Barclays, HSBC, Credit Suisse, Canadian Imperial Bank of Commerce, Mitsubishi UFJ Financial Group, and State Street.

Furthermore, to speed up payments, an initiative involved a tie-up between Citi and Nasdaq. Using Citiconnect for blockchain, the users will get direct access to global payments from Nasdaq’s Linq platform. This new venture will allow cross-border multicurrency payments and real-time tracking of payment transaction activity.

(Image Credits – Irish Tech News)

Blockchain here to replace the banks?

The traditional banking is powerful in its own ways. It is quite unlikely that a blockchain-based cryptocurrency will be able to completely replace the existing banking system. However, it may not be of a surprise if digital currencies are increasingly used for back-end settlement. Cheers.

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Crypto Guides

Bitcoin & The Possible Black Swan Events!

Introduction

Introduction

Introduction

The cryptocurrency is a domain where there are several varieties of critics. And most of them have a negative sentiment on it. There are financial bears who do not have a positive outlook on cryptocurrencies in the long term. Then there are techies who believe that blockchain, not a technology that is going to give a breakthrough to the current technology. There are also government mongers who are fearful and anxious about investors grabbing their interest in cryptocurrencies, which would drop their tax money.

Then we have a black swan event, which is a different case altogether. A black swan event for Bitcoin or any other cryptocurrency, for that matter, is the absolute worst-case scenario that could take place.

Why is it necessary to consider the possibility of Black Swan scenarios? If the FUDsters give a healthy level of condensing for the market as a whole, the black swan forecasts are like a rototiller. Their job is to assume that the market is going to collapse anytime soon and is required to stay away or look for other options. If such a thing is inevitable, it is useful to know what to expect.

Here are a few worst-case scenarios that cryptocurrencies could affect. Before getting right into it, first, let’s start off by understanding what a black swan event actually is.

A Black Swan Event

This was described by a financier and author, Nassim Nicholas Taleb, while he was writing about the 2008 financial crises. Taleb referred to the Black Swan event as a completely unpredictable beforehand consequence, which is devastating.

Taleb also pointed out that the black swan event is a relative concept. This event may not be a terrible scenario for everything equally. It can be localized as well, where one market’s black swan could be another’s market’s bull booster. For instance, the failure of cryptocurrency and blockchain could give more room space to other technologies and financial sectors.

We have listed out some examples which would be torn apart the cryptocurrency space – and not necessarily shake the other related sectors.

The Regulatory

Bitcoin and other cryptocurrencies currently operate in a very legal state at the moment. In the U.S. and many other countries, there have been tentative steps regarding the management of cryptocurrencies. The U.S. Securities and Exchange Commission has not confirmed whether cryptos are securities on a case-to-case basis.

However, the bomb hasn’t been dropped yet. There could be a moment where the countries like the U.S. and South Korea simultaneously decide that the cryptocurrencies would be banned outright. This would hit the entire crypto market really bad.

Catastrophic Code Failure

Cryptocurrencies are virtual currencies that are hardcoded. So, there is a possibility of a bug being found and exploited in the code. As a matter of fact, recently, a malicious attack happened to Verge, which allowed hackers to mine extremely easy blocks and extract off millions of dollars of the coin. Also, 51% of attacks can be carried out easily out of smaller coins that were discovered.

However, such a thing is unlikely to happen to the cryptocurrency giant, Bitcoin. But the Quantum Computing has something dissimilar to say: “The massive calculating power of quantum computers will be able to break Bitcoin security within ten years, say security experts.” Still, Bitcoin has proven itself countless times that it is resistant to attacks. Either way, a solution of the same would reach before it becomes possible.

Final words

Going by the definition, Black Swans are harder to identify ahead of time. They are also an event that could be devastating to the market. As the author Taleb says, it is like a variation of the “prepare for the worst” mindset. Though there is still enthusiasm and forecasted potential in the cryptocurrency space, it is also vital for such optimists to have their end on the negative side of it. After all, the cryptocurrency always proves to be a perfect example of “expect the unexpected.” All The Best.

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Crypto Daily Topic

Does Your Business Really Need Blockchain?

Blockchain has been getting a lot of attention lately. And this is because it brought with it game-changing capabilities that the business world had not seen before. As a result, many industries are scrambling to get a piece of the blockchain action. 

Blockchain has been getting a lot of attention lately. And this is because it brought with it game-changing capabilities that the business world had not seen before. As a result, many industries are scrambling to get a piece of the blockchain action. 

Blockchain has been getting a lot of attention lately. And this is because it brought with it game-changing capabilities that the business world had not seen before. As a result, many industries are scrambling to get a piece of the blockchain action. 

But do all businesses really need to incorporate blockchain? If you’re a business and considering deploying blockchain, this guide will help you assess if you need it all. 

Organizations and Blockchain

Blockchain technology was first applied to Bitcoin in 2009. The technology industry soon fell in love with the technology, which is why it has since broken out from its application in just cryptocurrencies. 

Blockchain is now becoming a common feature across a multitude of disparate industries worldwide, from insurance to food distribution to supply chain to commodities to health to recreation, and many more. Even governments are experimenting with blockchain to improve efficiency. 

And companies that are yet to integrate blockchain are keen to do so. A study by Juniper Research found that 57% of companies were looking to deploy blockchain. 76% of employees believed that technology could be ‘very useful’ or ‘quite useful’ for their company. 

When you look everywhere, everyone wants to adopt blockchain, or they already have. 

What’s the Deal with Blockchain?

Rarely a week goes by without another headline touting the great, life-changing attributes of blockchain. 

What informs that hype? As we’ve explained countless times on this website, a blockchain is a decentralized ledger of transactions and whose records are immutable and transparent for all authorized participants. Data is kept in the form of blocks, and these blocks are secured and linked to each other using high-level cryptography. 

Here’s why blockchain is such a phenomenon: 

  • It is decentralized, meaning that no single authority oversees its operations.
  • Data is cryptographically secured. 
  • Records are immutable, meaning once they’re entered, they can’t be deleted by anyone. This reduces the chances of manipulation and fraud. 
  • Participants of a blockchain network can check and confirm records any time they wish

That notwithstanding, not every business needs to integrate blockchain in its operations. Here’s why: 

1. If it’s Not Broken, Don’t Fix It

The old saying “if it’s not broken, don’t fix it” applies. Some companies are keen to incorporate blockchain despite having systems in place that are already working perfectly. 

Bear in mind that blockchain would come in and completely change how you do things. Why would you want to disrupt a working service by introducing something completely new and unfamiliar? 

If you wish to increase efficiency in your business, the answer could very well lie on changing or remodeling your way of doing things. Remember, a methodical approach is better than a sudden jump into something entirely different. 

Right now, the blockchain can be put into two broad categories: public and private blockchains. Private blockchains are those that require certain nodes to authorize any nodes that seek to participate in the network, while public blockchains are free for everyone to participate. 

Public blockchains have their strengths such as being resilient against censorship due to their decentralized nature. However, as of now, they are simply not capable of handling large volumes of information. Private blockchains, for their part, are panned by critics as unnecessary and merely shiny versions of a shared database. 

Currently, we have far cheaper and simpler implementations of a shared database which would provide largely the same benefits as a blockchain.  

If you want to assess whether you really need a blockchain for your business, ask yourself the following questions: 

  1. Should you really scrap your tried and trusted way of doing things and bet on a technology that’s still young? 
  2. Is your business based on a model that needs an accurate and transparent audit trail, and you previously have not really achieved that? In this case, you may need a blockchain.
  3. Does your business deal with massive volumes of information and data, and is speed a crucial aspect of doing business? In that case, better hold off on the blockchain for now. 

2. Blockchain is Expensive

Blockchain is not cheap. 

First of all, there’s the issue of energy costs. Bitcoin, for example, is known to guzzle a ton of power.  

Then there’s the issue of storage costs. You need to consider that as more transactions are added onto the blockchain, it gets bulkier with time. Also, each node maintains the blockchain by downloading a copy of it to their computer every while. As the blockchain increases in size, it becomes more difficult to manage it. 

Other costs could be: 

  • The cost of building blockchain solutions tailored for your business – from scratch
  • Maintenance and incident solution costs 

In the end, you may find that the cost of developing and maintaining a blockchain may exceed the profits realized from its implementation. 

3. Complexity

Incorporating blockchain is fairly complex, and this is true for all stages of the process. 

A lot of consultations, tools, platforms, software, hardware, and so on are involved, and they all require a high level of accuracy since a simple bug or loophole could undo the whole set up. 

Also, this complexity added to the challenges of the existing business software can be overwhelming for the company and negatively affect operations, rather than aid them. 

There’s also the issue of personnel. Embedding blockchain will need people with this particular skill set, which is expensive and adds to the overall complexity of the picture. 

4. Clients and Customers

Making the blockchain shift is not just going to upset the internal structure, but the external as well. This includes relationships with clients and customers. The potential for this happening should be a real cause for concern for businesses that want to jump into the blockchain bandwagon. 

The study by Juniper Research also revealed the following: 

  • 35% of companies that were considering blockchain believed it would cause “significant” disruption to internal processes
  • 51% of companies felt that integrating blockchain would cause “significant” disruption to partners/customers

As you can see, blockchain doesn’t necessarily augur well for the relationship aspect of a business. As you can already tell, relationships that have taken years to establish and nurture shouldn’t be risked for a new piece of shiny new technology. Any savvy business person knows maintaining and sustaining old relationships is better than acquiring new ones. Healthy business relationships are essential for the success of any company. 

Also, consider the aspect of human beings’ relationship with change. People are not naturally inclined to accept and embrace change. So, think about that before going ahead to deploy that blockchain. 

Questions Every Business Should Ask Themselves before Deploying Blockchain   

Blockchain has so much potential, and for the right environment and business, it can help turntables for the better. That doesn’t mean every company should be queuing up to adopt the technology. Most businesses are already utilizing processes that are helping them turn profits, and everyone is happy. As such, there’s no need to upset the proverbial apple cart in the name of implementing blockchain. 

Before you jump the gun, ponder on these questions: 

  • Will the cost of implementing blockchain outweigh the benefits? 
  • Are my competitors using technology, and how’s that going for them?
  • Does the decentralized and radically transparent model of blockchain fit my business model? 
  • What is it that blockchain will improve in my business?
  • Are there other technologies, solutions, or approaches to any issues I want to fix in my business?
  • Do I have a working process in place that doesn’t need disruption?
  • Can my business handle the expenses associated with blockchain, from implementation to running?
  • Can I afford to invest in my staff’s education on the new technology?
  • Can my team embrace the new technology and get up to speed with it?
  • Can I get blockchain developers who will provide value for money?
  • How will the new shift affect my existing business relationships?
  • Should I do an overhaul of the existing infrastructure, or should I do a trial run before changing things?
  • Am I willing to risk everything for this exciting yet relatively young technology? 

Only and only when you answer these questions satisfactorily should you take the jump on the blockchain.

Final thoughts

Blockchain wields immense potential, and that potential can be harnessed to transform and rationalize business processes. But it also comes with massive costs, it’s complicated and can cause a significant shift in the operations of any business, which may break or make it. Thus the need for extensive research and a lot of consideration before transitioning into the blockchain. 

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Crypto Guides

Impact of Cryptos & Blockchain on The Current Prison System

Introduction

Introduction

Introduction

It is a known fact that cryptocurrencies and blockchain technology has impacted many of the industries in a positive way. In our previous guides, we have discussed many such sectors like Healthcare, Supply chain, Banking, etc. It is obvious that these are only a few of the many industries where the adoption of these path-breaking technologies is taking place. In this article, let’s see how cryptos and blockchain together are making the current prison system better.

Enhanced Tracking

The judiciary system in developed countries has already adopted technologies like cryptography & blockchain to enhance their tracking capabilities. In Foshan, a city in China, police have set up a community correction system that is entirely based on blockchain. The purpose of this system is to enable the real-time tracking of convicted criminals.

Every prisoner will have a specific duration of parole after their sentence is over. During this period, they must be monitored very carefully, and currently, governments do have some outdated techniques for this purpose. But with the community correction blockchain system, this process will be simplified.

Prisoners will be given electronic bracelets that they must wear all the time. These bracelets will have a tracking encryption program that allows police and court executives to get all the relevant real-time data. This enhances the supervision of offenders with minimal effort and provides more accurate information. Since the technology behind this system is based out of blockchain, the data cannot be tampered with no matter what.

More information related to this can be found on the Facebook page of People’s Daily, China.

For A Better Cause

There is a study that says almost 90% of the prisoners who can’t afford their bail money turn out to be pleaded guilty. This data holds true only for New York City. The number might go high in countries that are still developing. This essentially means that these prisoners can’t even utilize their constitutional rights as they aren’t allowed to argue their case because they don’t have enough money to do so. In very simple terms, we can say that irrespective of them being involved in a crime or not, they are found guilty because they are poor.

A blockchain startup known as Bail Bloc is trying to help this kind of prisoners. This company is allowing users like us to offer the processing power of our gadgets when they are not being used. This power is used by a set of miners to mine a well-known crypto – Monero. The Monero generated is donated to a charity organization known as the Bronx Freedom Fund. This NGO uses all of the created cryptocurrency to help bail out prisoners who aren’t in a position to afford their bail money.

If you are interested in making a contribution to the poor prisoners, you can download Bail Bloc from here and allow the software to access your unused gadget’s unused processing power. Below you can see a snapshot from the Bail Bloc official website where the statistics are given in an understandable way.

Conclusion

There are many other startups like CellBlocks that are using cryptos and blockchain to improve the current prison system. The intention of CellBlocks is to digitize the economy of large prisons by tokenizing the currency that circulates in jail and keeping a record of all the transactions on a blockchain network. With so much adoption in such less time, we can only imagine the amount of impact these technologies will have on various industries in the future. Cheers.

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Crypto Daily Topic

Blockchain vs Tangle: All you need to know

The issue of blockchain’s scalability is as old as blockchain itself. If you’re the tiniest bit familiar with the technology, chances are you’re aware of the blockchain’s inability to support millions of transactions at a scale that would enable it to compete with current money transfer systems such as Visa. 

The issue of blockchain’s scalability is as old as blockchain itself. If you’re the tiniest bit familiar with the technology, chances are you’re aware of the blockchain’s inability to support millions of transactions at a scale that would enable it to compete with current money transfer systems such as Visa. 

The issue of blockchain’s scalability is as old as blockchain itself. If you’re the tiniest bit familiar with the technology, chances are you’re aware of the blockchain’s inability to support millions of transactions at a scale that would enable it to compete with current money transfer systems such as Visa. 

When you wade deeper into the scalability debate, you’ll soon hear such terms as IOTA, Tangle, and directed acyclic graphs (DAG).  What do these terms mean, and is Tangle a threat to blockchain? 

In this piece, we’ll explain what Tangle is, how it stacks up to blockchain, and whether we can see a future where it replaces Bitcoin or becomes its formidable match. We’ll also give our verdict on which technology is currently more superior.

What Is Tangle?

The Tangle is a network that aims to achieve the same purpose as blockchain:  facilitate transactions in a trustless and decentralized environment. Tangle is an implementation of the directed acyclic graph (DAG) – which is also a distributed ledger like the blockchain. Also, much like the blockchain, DAGs do not have intervening authority or entity such as a bank or a government.

 This is where the similarities end. Tangle has special features designed to facilitate the ‘Internet of Things’ (IoT). IoT is a  universe of interrelated devices that can interact with one another through a multitude of little unique identifiers to enable them to execute the functions they were designed for without requiring human or computer intervention.

Unlike how it sounds, the internet of things is not that complicated a concept. Imagine a shower switching itself on 5 minutes before you arrive, or a coffee machine that makes coffee 5 minutes before you wake up, or a washing machine setting itself on – all without any sort of input from you.

If this technology is to work as it’s meant to, there must be an underlying network that can handle a  massive amount of transactions- from facilitating exchanges, to transferring data,  to sending of signals – all in a seamless, secure and fast network. 

Enter Tangle. This technology is based on DAG, which is designed to support a plethora of data interactions but will facilitate the IoT in a way that the blockchain cannot.  These features are like the following: 

No miners: Unlike the blockchain, there are no miners in the Tangle network.  This eliminates the need for fees, or miners being able to block some transactions.

More relaxed data transfer rules: This makes Tangle more agile than the blockchain and thus better for handling a vast amount of transactions.

Scalable data units: This feature facilitates the transfer of training bits of data, enabling Tangle to process micro-transactions.

The pros and cons of Tangle: 

Pros

  • Zero fees
  • Faster transaction times
  • Scalable

Cons 

  • The technology is not yet tested and proven
  • Does not support decentralized applications
  • Arguably less secure
  • Centralized – Tangle relies on a ‘central coordinator node’ that checkpoints valid transactions

What Is Blockchain?

Blockchain is the technology that supports cryptocurrencies such as Bitcoin, Ethereum Litecoin, and so on. Blockchain is a ledger that holds transaction blocks – which are linked to each other and secured using cryptography. Each block has a reference to the block that came before it, hence a ‘chain.’ 

Each node (miner) independently verifies the authenticity of a transaction – meaning that transactions are agreed upon via group consensus. The miner who confirms a block of transactions receives block rewards or a fraction of the transaction fees.  Miners usually invest considerable sums of money in a special mining computer known as application-specific integrated circuit (ASICs). 

Blockchains, like the Ethereum blockchain, can facilitate the creation of a special type of applications called decentralized applications (DApps). DApps are, unlike today’s applications (such as Facebook or Google), under no one’s authority or censorship. Also, DApps grant users the complete autonomy of their personal data – which is the complete opposite of how legacy applications handle users’ data.

Bitcoin’s Scalability Issues

The current blockchain architecture faces serious scalability issues. The fact that each node must verify transactions before they are added means confirmation is slow. The limited size of blocks, e.g., 1MB for the Bitcoin blockchain, is another bottleneck since a very limited amount of data can fit in each block. 

Now, as more people transact on the blockchain, the more clogged it becomes.  This means longer waiting times and increased fees, which leads to unsatisfied users. This has led to several hard forks of the Bitcoin blockchain –   all which sought faster transactions and lower fees.

Let’s take a quick look at the pros and cons of the blockchain. 

Pros: 

  • A proven history of reliability
  • A secure system that is difficult to compromise
  • Layer 2 Solutions such as the lightning network are being explored to remedy the scalability problem

Cons: 

  • The blockchain is not scalable on its own
  • High fees and long waiting times

Differences between Tangle and Blockchain

While only a few technical differences distinguish blockchain and Tangle, those differences are significant nevertheless. Let’s take a look: 

Structure – blockchain comprises a series of cryptographically connected data blocks. Tangle, on the other hand, consists of a group of data nodes that flow in just one direction. Also, blockchain can double back on itself in a circular manner, but Tangle can only move in one direction. (This means that Tangle can more rapidly transfer data.)

Security– blockchain offers better security thanks to its extremely meticulous block confirmation process that involves solving computational puzzles and verification of transactions via group consensus. On the other hand, Tangle’s security feature entails validating the two most recent transactions before confirming the next.  By this measure, blockchain is more secure than Tangle.

Decentralization – blockchain is undoubtedly decentralized since it operates on thousands of computers around the world, with no single authority overseeing transactions. Tangle is also billed as decentralized, but it utilizes a safeguard that it calls a ‘coordinator node.’  The presence of the safeguard renders Tangle centralized, one way or another. It’s hard to say that the tangle framework is entirely autonomous.

Tangle fans argue that the technology’s less detailed node addition protocol might make it less secure than blockchain, but it also makes it more agile. They stress that this makes Tangle better equipped to handle massive volumes of IoT interactions. But this uncertainty and its security, as well as its centralization problem, means the technology is far from ripe to fulfill its intended purpose, let alone compete with blockchain.

What is IOTA?

Tangle’s only application to date is the IOTA cryptocurrency. IOTA is named after IoT, which it’s designed to facilitate.  IOTA can handle a multitude of tiny transactions, which makes it ideal for the micro-transactions that run an internet of things.

As of March 30, 2020, IOTA is trading at $ 0.142212 at a market rank of 24 with a $ 395, 282, 148 market cap. 

For its part, Bitcoin is trading at $ 6, 316.03, and it ranks at number one with a market cap of $115, 552, 963, 908.

Blockchain Vs. Tangle: Which Is Better?

As the debate about which of the two technologies is better rages on, it helps to look at the specifics. To begin with, Tangle is yet to be proven as opposed to Bitcoin, which has been a mainstay for ten years now. Also, it doesn’t have nearly half of the number of users on the Bitcoin network.

Additionally, IOTA is at risk of a 34% attack, as opposed to Bitcoin’s 51%. This means that an attacker would only need to gain control of 34% of the IOTA network, rendering it less secure than blockchain.

As previously mentioned, IOTA utilizes a coordinator node that synchronizes data among all nodes, making it centralized.  This is in contrast with Bitcoin, whose nodes are equally distributed across the globe.

From these observations, it’s clear to see that blockchain maintains the upper hand in the battle between the two Technologies – at least for now.  This does not mean that IOTA’s completely written off. It is, on its own, a force to reckon with, as evidenced by its fiercely loyal community as well as a strong value proposition.

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Crypto Guides

Blockchain & Internet Of Things – The Brilliant Combination!

Introduction

Introduction

Introduction

Blockchain alone can revolutionize many industries, as we have seen in our previous articles. But when blockchain applied together with the next generation innovative technologies such as IoT, Artificial intelligence, Machine Learning (to name a few) will do wonders. The combination of these technologies brings the best of each other. Especially in terms of security and authenticity of the data generated from millions of devices across the world on a daily basis.

What is IoT?

IoT stands for the Internet of things. It is a system of interrelated computing devices, mechanical and digital devices. These devices are provided with unique identifiers that can transfer data in the network without human-to-human or human-to-machine interaction. This is possible as the devices are extended with internet connectivity and sensors so that the transfer of data is possible.

With so much data being generated and transmitted without any human intervention, there are many concerns about the security and privacy of data. Blockchain comes to rescue to address the concerns of privacy and security in the world of IoT. Let us see how, with the help of some use cases below.

Smart Homes

The concept of IoT enables smart homes. Most of the devices we use at home can be embedded with sensors, and with the help of IoT, we can control them remotely using our smartphones. When at home, they can easily be controlled using Alexa, Google Home, with the help of voice recognition. To enable all these functionalities, sensitive data such as voice and facial recognition should be stored. This data can be stored securely in the blockchain, which allows strict access restrictions. It can be accessed by anyone else if required only through individual permissions using smart contracts.

HealthCare

IoT plays a very crucial role in health care these days. Remote health care can be achieved using IoT. Elderly care is essential to most of the countries these days as the elderly population is increasing in countries like China, Japan, and the US. Since there are fewer people to take care of the elderly, IoT can come to our rescue.

With the help of IoT, if the patients don’t take medicine on time, a message will be directly sent to their smartphones, reminding them to take medication (since the quantity isn’t reduced from the containers). Whenever a fall or sudden change in a heartbeat is detected, the nearest health care providers are automatically alerted with the help of IoT. These are only some examples of uses in health care, but since this is very sensitive data, blockchain can help in keeping them secure. Most importantly, tampering cannot be done if the data is stored in the blockchain, which is very crucial to achieve the desired outcome in these cases.

Agriculture

Agriculture can be widely improved by deploying IIOT (Industrial IOT) sensors and satellite imagery to monitor the millions of acres of land. With IoT used in the supply chain, provenance tracking can be enabled. Crops can be sold by using smart contracts even before harvesting them as all this data ensures the buyer of the quality of the product from the fields to their floor. This makes a profitable trade for all the parties involved.

There are ample opportunities for blockchain and IoT together in Industrial sectors when it comes to the maintenance of the machines. With the help of sensors continuously updating the performance of the devices, wear and tear can be restricted, thus decreasing the downtime. Automobile industries can use real-time data to get the vehicles serviced on time or replace a crucial part in time. Autonomous cars can be made more reliable and usable using IoT and blockchain. The combination of IoT and Blockchain is amazing, but it is important to remember that a lot of other potentials are yet to be achieved.

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Crypto Guides

The Fascinating Applications of Smart Contracts

Introduction

Introduction

Introduction

In the previous guide, we have understood what smart contracts are and what role they play in eliminating third parties. You can find that guide here if you didn’t get to read that yet. Smart Contracts have come out as one of the interesting applications of blockchain technology but it evolved so well that it has already been applied in most of the industries. Experts believe that these smart contracts do have significant applications in many other industries. Hence, in this article, let us see their usage in different industries.

Health Care and Medical Records

One primary application of smart contracts lies in the healthcare industry. Transferring and sharing patients’ electronic medical records (EMR) should be done in the most secure way. We are not saying that the current technology is not secure at all. We are just saying that using this technology will enhance the existing security.

Smart contracts enable multi-signature approval features enabling both patients and health care providers, allowing them to share the information securely as these are sensitive data. Patients can allow their data to be sent to research organizations for various studies and can be sent micropayments to the patients for participation using the same platform. We must not forget that a lot of infrastructure and technology should be built to achieve the same.

Banking

Banking systems have undergone a lot of changes proportional to technology adoption by the people. Smart contracts can play a crucial role in the mortgages provided by banks or any non-banking financial institutions. Banks spend a lot of money to check if the property that is being mortgaged currently is already mortgaged or not. To check if the property does indeed belong to the person applying for the mortgage or not. If the documents of the property are placed in blockchain with the help of smart contracts, this can be verified in a click. This saves a lot of money to both consumers and banking, reportedly in billions.

KYC

These days we have to provide our KYC documents at various places like to open a bank account, to take a sim card, driving license, registering property to name some. If the KYC documents are stored in a blockchain, with the help of smart contracts, the right people can be given proper authority to access them. Also, if any changes required from our side, we need to make a change at one single repository instead of making changes at every entity where we have given the documents.

Supply Chain

Supply Chain is one major area that can benefit hugely using blockchain adaptability and thereby using smart contracts. There are various documents throughout the supply chain cycle which can be misplaced and tough to authenticate at and every area required. If smart contracts are used to share and verify these documents, a lot of time and money can be saved to clear the goods at national highways, significant seaports, etc. Provenance tracking can also be done, thus increasing the bar of trust among consumers.

Voting

Voting can be achieved relatively and transparently using blockchain and smart contracts. With blockchain involved, no one can tamper with the election process, and with the smart contracts, it is possible to ensure the correct person is voting instead of the duplicity of votes.

Insurance

We all know it takes time for the insurance industries to clear the claims as it takes time to check the claims for its authenticity. With the adoption of smart contracts, the respective authorities can easily fact check the claims. For example, for travel insurance, we can easily verify whether the flight is a delay or canceled, thus passing the request.

However, all these industries can actively adapt and grow using blockchain only in the ideal world where blockchain is integrated throughout all sectors and government institutions. Active engagement and development are only possible when adoption is at a high rate. The blockchain technology is still growing, and a lot of innovation and growth is yet required to use the full potential of blockchain and thereby smart contracts as well.

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Crypto Daily Topic

Pot and Crypto: Why Should the Cannabis Industry Embrace Blockchain? 

With an anticipated growth of about $30 billion and an expanding job market, it’s evident that the cannabis industry is set to become one of the strongest pillars of global economies. This explains why various legislatures are legalizing marijuana both for recreational and medical use. 

With an anticipated growth of about $30 billion and an expanding job market, it’s evident that the cannabis industry is set to become one of the strongest pillars of global economies. This explains why various legislatures are legalizing marijuana both for recreational and medical use. 

With an anticipated growth of about $30 billion and an expanding job market, it’s evident that the cannabis industry is set to become one of the strongest pillars of global economies. This explains why various legislatures are legalizing marijuana both for recreational and medical use. 

But the major strides in the industry have not been without pain points. From the ever-changing regulatory rules, unreliable payment solutions, to inefficient supply chain management – all these create uncertainty within the industry. As a result, the industry hasn’t been successful at drawing in steady investors.  

As blockchain continues to find use in various industries, the technology will prove to be even more useful in the cannabis market to help entrepreneurs mitigate some of the problems plaguing the industry.

Here are some of the solutions blockchain can offer 

Monitoring Purchases

In states where marijuana is legal, there is a maximum limit that consumers can buy at any given time. The limit is set to curb the resale of marijuana in the black market by making it costly to buy marijuana in bulk. But, there are loopholes in this rule whereby a consumer can buy the maximum daily limit of marijuana in one dispensary, and then head to another to buy some more. 

When this happens, a retail dispensary risks going out of business as the state can revoke its license. Moreover, the extra amount of marijuana purchased ends up being resold in the black market, resulting in a loss of revenue in terms of taxes. 

By using blockchain to record and verify purchases, marijuana dispensaries can ensure that their customers don’t exceed the purchase limit set by the local government. These records are tamper-proof and transparent for all retailers to see, especially those operating in the same blockchain network. The technology can be integrated into consumer verification IDs and inventory management systems to prevent retail operators from acting in non-compliance. 

Quality Assurance

For medical marijuana users, the quality of CBD products is highly appreciated in order to reap the full benefits of the hemp plant. Unfortunately, quality control bodies such as the Food and Drug Administration (FDA) consider CBD products as a supplement. As such, they don’t scrutinize the labels to authenticate the quality of these products. 

To guarantee quality at all times, cannabis businesses can use blockchain to store all the information of a hemp plant right from its seedling stage to a saleable product. This includes the laboratory results indicating the correct concentration of THC and CBD in a product. Such levels of transparency go a long way in winning consumers’ trust. 

Big corporations such as CVS pharmacy, Walgreens, and Walmart who are strict on the quality of CBD products, can also leverage blockchain to ascertain if a product is up to standard. Doing so will make it difficult to corrupt the quality of a product and eliminate the tedious paperwork involved in the process. 

Payment Processing

Given the dynamic nature of the laws regulating the cannabis industry, most banks shy away from providing services to the industry players. For starters, the lack of banking services has forced the industry to operate as a cash-only business. As is often the case, businesses operating on fiat currency only are highly susceptible to theft and fraud. Also, as sales increase, accounting for the high volume of cash becomes hectic, creating inaccurate financial statements that lead to taxation hurdles.  

In this case, cryptocurrencies can be used as a payment method, ensuring fast, secure, and affordable transactions among industry stakeholders. All the payments will be recorded in a secure and distributed ledger system that helps in auditing as well as maintaining tax liability. 

Legalization of Marijuana

So far, only a handful of nations have legalized marijuana. Considering the proven medical benefits of the hemp plant, it’s unfortunate that some countries still criminalize pot. But, there is a likelihood that some would be open to legalizing weed as long as its use is regulated by law. 

The integration of blockchain technology into the cannabis industry will make it easy for everyone in the supply chain to abide by all the regulations put in place. The authorities will be in a position to curb illegal marijuana businesses as well as limit its use to prevent abuse. So, marijuana will be sold to the right people for the right use, contributing to its legalization.  

Decentralize Electronic Medical Record

Electronic Medical Records (EMRs) promise efficiency in the health sector as long as they are properly integrated into the system. But it can be concluded that the health sector hasn’t achieved much success in leveraging EMR to offer medical services. A good example is the cannabis industry where some individuals have acquired marijuana medical cards by forging fake health records

These individuals cause an increase in the demand for marijuana due to their impulse buying practices. Consequently, those who have legitimate medical conditions end up paying more for medical marijuana and may even fail to get some. 

Blockchain-based EMRs can help ensure that medical marijuana cards are given to those who rightfully deserve them. As an immutable and distributed ledger system, any patient’s data is permanently recorded, such that it would be impossible for unauthorized persons to distort it. The record can also be shared across various hospitals to help doctors and marijuana retailers determine the patients who truly need medical marijuana. 

Use Cases of Blockchain in Cannabis 

Currently, there are already more than ten blockchains uniquely designed for the cannabis industry. Some of them even offer their own cryptocurrency to help meet the banking needs of the cannabis industry. 

i) Paragon 

This network is committed to enhancing transparency from seed to sale tracking, as well as coming up with regulatory solutions in the cannabis industry. The network even has an in-house laboratory that works to ensure quality is maintained. Its crypto coin, Paragon Coin, can be used to make payments within the industry supply chain.

ii) Potcoin

Potcoin is mainly focused on offering financial services to the marijuana industry. It allows the transfer of funds via a digital wallet, from customers, businesses to suppliers. 

iii) CanSoS

CanaSos is a social network platform that helps consumers locate nearby retailers and discover new CBD products and marijuana strains. The users can review marijuana products, answer questions, and earn points that can be redeemed for PerkCoins. The coins can be used to buy marijuana or withdrawn for fiat currency. 

Conclusion 

The cannabis industry is a relatively new market that is yet to be widely accepted in all parts of the world. The same can be said about blockchain, which makes the two a perfect match for each other. As the marijuana market expands, blockchain is well poised to solve the current problems limiting the industry’s growth and even the unprecedented ones on the horizon. 

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Crypto Guides

Smart Contracts – A Brief Introduction

What are Smart Contracts?

What are Smart Contracts?

What are Smart Contracts?

Smart contracts are nothing but deals that are digitally stored using digitization to enable digitalization of the business process. The smart contracts can be touted as one of the best applications of blockchain. Blockchain eliminates the middlemen in whichever industry the technology is leveraged, and smart contracts do the same. One doesn’t have to rely on a third-party player to authenticate the deal but pay some money to build the code which is suitable for all the parties involved and deploy the contract in the blockchain to make it active.

How do they work?

Smart contracts in real is a piece of code which can be written in any language that the blockchain platform may support. The code is written in such a way that when predefined parameters are met, the contract execution triggers automatically, and the conditions are met without any human intervention. This makes it very easy to handle and execute smart contracts.

Are they reliable?

Immutability is one of the essential characteristics of blockchain, as we have seen in our previous articles. Since the blockchain works on the concept of distributed ledgers, a copy of the contract will be available with every party involved. Smart contracts deployed in the blockchain network are immutable; once used, they cannot be changed. All the predefined terms should be met as agreed and signed by all the involved parties. Payments, if any concerned, will be done automatically as well without any human involvement. Thus, not delaying the cash, which makes all the parties happy about the work done. Hence the smart contracts are considered very reliable.

The real-life example of Smart Contracts

There are infinite real-life scenarios where smart contracts can be used. We all have booked tickets for our most awaited events, say concerts, movies, sports and so on. We always use a third-party website/app to book the tickets. Here the audience, as well as the event organizers, are trusting this third-party service provider with their money.

Instead of a third-party service provider, if one can deploy smart contracts in these scenarios, it would be easy to manage money. People buy their passes for the event, and this money is stored in the escrow linked to the contract. The money is not credited to the event organizers’ account unless the event is completed. If the event is completed, the funds will be automatically transferred to the organizers of the game. If not, the amount will be refunded to the audience account as per the terms and conditions of the event.

In this case, we do not depend on a third party for the refund of the amount, which may delay in case of any eventualities. We are also not paying any other extra fee to book the ticket as no third party is involved—this the best real-life example where once can use smart contracts.

Conclusion

The new technologies in our lives have come to make our life easy, and smart contracts come under such a category. We not only save money using them but also get rid of concept terminology of terms and conditions which lawyers use to cash the loopholes when something goes wrong. In this case, we use straightforward language to code the words and get them triggered as required, thus making them comfortable and very reliable to use.

Categories
Cryptocurrencies

What Does it Take to Launch A Successful ICO?

For the last three years, Initial Coin Offerings (ICOs) have been compared to the dot-com bubble of the early 2000s. The two are much alike in that they led to significant loss of investors’ money. The only difference being that ICOs caused an 85% drop in the crypto market cap, which is steeper than the dot-com’s bubble – 78% crash.  

For the last three years, Initial Coin Offerings (ICOs) have been compared to the dot-com bubble of the early 2000s. The two are much alike in that they led to significant loss of investors’ money. The only difference being that ICOs caused an 85% drop in the crypto market cap, which is steeper than the dot-com’s bubble – 78% crash.  

For the last three years, Initial Coin Offerings (ICOs) have been compared to the dot-com bubble of the early 2000s. The two are much alike in that they led to significant loss of investors’ money. The only difference being that ICOs caused an 85% drop in the crypto market cap, which is steeper than the dot-com’s bubble – 78% crash.  

Well, the ICO bubble may have popped as recent data suggests, but there are valuable lessons to be drawn from its failure. These lessons can be used to form the basis of what it takes to launch a successful ICO despite the prevailing skepticism around such projects. 

How to launch a successful ICo

i) Formulate a Sound Business Model

Similar to traditional businesses, most ICO projects fail due to the lack of a strategic business plan. As such, ICO investors are willing to invest in a project that has a sound business model with a concrete idea of the product or solution the project offers to the market. To achieve this, you need to objectively study the market, know your audience, and weigh your project’s contribution to the crypto community. 

Once you have all the relevant data, it is always recommended to write a whitepaper for the investors to review. Essentially, a whitepaper is a comprehensive description of your entire project and its goals. Be sure to also include crucial details such as development strategies, legal issues, and available resources. Sure, a well-crafted whitepaper isn’t a guarantee of success. But a poorly written whitepaper with an impractical approach to achieving the project’s goals will certainly turn investors away. 

ii) Create Value for Your Token

Ideally, an ICO campaign will launch its own tokens that give investors access to the service or product set to be launched. If your token is to gain value, it will need to be in high market demand to attract more investors. Note that demand can be created only if your business model offers better solutions than your competitors. Besides, there are numerous project offerings in the market, so you have to make yours stand out. 

Provided you have a solid business plan, there are two main approaches to increasing the value of your token. The first is designing a token distribution plan, and the other one is deciding on the exact number of tokens to be issued. To start with, the token distribution plan is done through private sales pre-sales or crowd sales. Private sales are closed ICO sales targeting high profile investors and professional investors. The idea here is to raise a significant amount of funds and leverage the influence of wealthy investors to gain the attention of others during the public sale. 

Pre-sales are usually held in preparation for the main public sale. They are usually done to raise awareness of the token among the general public. The crowd sale targets investors, including those with limited amounts of investment. 

In each stage of the token sale, decide in advance how many tokens will be issued in total. 

You should also create room for issuance of additional tokens just to maintain market equilibrium. 

iii) Build Your Team

Much of an ICO’s success depends on the team behind the project. From the marketing team, product developers, engineers, to the initial investors; they all need to be in sync with the objectives of your ICO project. It is also wise to include a lawyer in your core team to help you streamline the legal process of launching the ICO. Currently, there aren’t any lawyers specializing in crypto space, but an experienced lawyer in corporate formation can serve you just right. 

Other members of your team, such as financial experts and developers, should have a good reputation in the blockchain industry. This goes a long way into giving your project the credibility it deserves to win reliable investors. A good team should consist of members who can complement each other’s skillset and even bring like-minded professionals on board. 

You might also consider having well-known advisers and promoters in alliance with your team. Although this doesn’t always translate to success, these individuals will help vouch for your project. 

Keep in mind that a team doesn’t entail those tied directly to the project only. Your target customers also have a place in your team. Advertising might win you some customers, but it’s an expensive approach considering that not everyone is interested in ICOs. A good place to start is by interacting with your customer base is through established online crypto communities such as Bitcointalk, Steemit, and Reddit. You can also work closely with YouTubers specializing in cryptocurrency. This way, once you start your marketing campaign, the audience will already be familiar with your offering and be likely to be swayed into investing. 

iv) Build an Online Presence

Having an online presence is not only a viable marketing tool but also a good way to give your project a touch of legitimacy. 

You can start by creating a website that showcases the necessary details of your project. As such, it makes sense to post an online whitepaper of your project on the website. Most importantly, remember to create a ‘team’ section on your web where all the project stakeholders appear. This section should be detailed, explaining the role of each team member, including their previous work and the milestones they have achieved. Be sure to include a passport size picture of each member above their profile. 

You also need to know that only a handful of investors read the whitepaper to the very last page. For this reason, it is a good idea to have a ‘roadmap’ section on your website to concisely outline realistic goals of the project, including the set timeframes to achieve these objectives. 

Your online presence wouldn’t be complete without creating social media platforms. You should have one platform for your entire project, and several others for every member of your team. The platforms provide an interaction medium between your brand and customers. 

v) Launching Your ICO

Launching an ICO is a pretty straightforward process, especially if you observed the aforementioned procedures. But there are a few twists and turns to navigate before you can put your ICO out to the world.

The first hurdle to overcome is deciding the location in which to launch your ICO. Different countries have varying policies regarding fundraising, particularly in the crypto space. For instance, offering your ICO tokens to U.S residents may not be a good idea since the tokens will be subject to the Securities and Exchange Commission (SEC) regulations. This will come with its share of legal problems given that the U.S government hasn’t exactly warmed up to blockchain. Instead, aim to launch your campaign in ICO-friendly countries such as the British Virgin Islands, Singapore, Hong Kong, Switzerland, and the Cayman Islands. 

Lastly, determine the token pricing strategy to use based on your goals. Generally, there are four token pricing strategies: 

  • Undetermined price: This method is divided into several price stages, whereby the token price in the initial stage is fixed. As more investors come in, the price increases as the stages advance. 
  • Fixed price per token: In this method, the tokens are offered at a set price that doesn’t change with the number of investors. This is to say that investors can buy as many tokens as they wish without affecting the price. To avoid market overvaluation, the tokens are frozen for a pre-set period, after which they are made available for trading on the market. 
  • Random price token: This strategy doesn’t have a fixed price for the token. Instead, tokens are issued to investors as per their amount of funds. 
  • Price decreases over time: As the name suggests, the tokens are offered at a higher price than decreases as the sale period passes.

Conclusion 

ICOs are a revolutionary way through which the average investor can access investment opportunities that would be otherwise reserved for venture capitalists and institutional investors. This provides blockchain entrepreneurs with a platform to actualize their business goals and contribute to the advancement of the entire blockchain space. However, setting up an ICO project and finally raising funds isn’t as easy as it was a couple of years ago. As such, the above-mentioned guidelines will help you adjust to the changes in the ICO market, bringing you closer to the objectives of your ICO project. 

Categories
Crypto Daily Topic

The Role of Cross-chain Technology in Blockchain 

What would it be like if all blockchain projects could work together? Think of a universal blockchain system – one that would be used everywhere across all industries. Take Stellar blockchain, for instance, a project that makes it easy for users to come up with cross-border transactions even in remote, high-latency areas. Vechain blockchain, on the other hand, has almost similar capabilities, but with the aim to enhance supply chain management and business processes.

What would it be like if all blockchain projects could work together? Think of a universal blockchain system – one that would be used everywhere across all industries. Take Stellar blockchain, for instance, a project that makes it easy for users to come up with cross-border transactions even in remote, high-latency areas. Vechain blockchain, on the other hand, has almost similar capabilities, but with the aim to enhance supply chain management and business processes.

What would it be like if all blockchain projects could work together? Think of a universal blockchain system – one that would be used everywhere across all industries. Take Stellar blockchain, for instance, a project that makes it easy for users to come up with cross-border transactions even in remote, high-latency areas. Vechain blockchain, on the other hand, has almost similar capabilities, but with the aim to enhance supply chain management and business processes.

Now, if the two, and indeed all blockchains, could work in harmony, some of the technical and economical scalability problems within the entire blockchain ecosystem would be solved.

Unfortunately, these two projects – like all other blockchain projects, operate in isolation – denying users the opportunity to benefit fully from the capabilities of the decentralized ledger technology. More so, if blockchain as a whole is to achieve mainstream adoption, all blockchain networks need to work in harmony.

Is Blockchain Interoperability Worth It?

Simply put, blockchain interoperability is the ability of different blockchain networks to interact with each other and share information without restrictions.

With the rise of numerous blockchain projects, none of these networks have knowledge of the information in other networks. While blockchain networks can communicate and share information, the problem is this has to be done with the intervention of a third-party e.g., crypto-exchanges – which are platforms on which traders exchange digital currency pairs

As is always the case; however, whenever there is an intermediary between two parties, expensive transaction costs are inevitable. Besides, the fact that an intermediary is involved undermines ‘decentralization,’ which is the core principle of blockchain technology.

Now, the increase in the number of blockchain projects is a good thing since it expands the growth of the technology – but it also fragments the market. This is especially true with each new project seeking to outdo the former – by solving a problem that the predecessor project apparently couldn’t solve.

Ironically, these projects end up making a trade-off between their security, speed, or level of decentralization as they attempt to out-do each other. Eventually, user experience is eroded – while also hindering the transition of the industry into the mainstream.

As you can see, blockchain interoperability is important not just for improving user experience but also for establishing a unified ecosystem. This would remove the need for blockchain projects to compete against each other, as well as protect the value of the entire blockchain industry.

What is Cross-chain Technology?

Cross-chain is an emerging technology that aims to facilitate interoperability between blockchains. As such, different blockchain networks can exchange information and value without the need for an intermediary.

Say, for example, you’ve been using the Bitcoin blockchain network, but you want to complete a transaction that requires smart contract capabilities provided by the Ethereum blockchain. With cross-chain technology, you can transfer your Bitcoins over to the Ethereum blockchain to complete the smart contract transaction without the involvement of an exchange platform.

As such, cross-chain technology facilitates the transfer of information as well as value from Bitcoin’s network to Ethereum blockchain – two networks sharing a common protocol- improving user experience and enhancing efficiency.

The most popular case of cross-chain in action is the atomic swap that was executed in 2017 between Litecoin and Decred. Another one followed where Bitcoins were exchanged for Litecoins. Note that in these two instances, only tokens were exchanged, and assets didn’t have to be moved from one blockchain to the other. But it is anticipated that with advanced cross-chain technology, it will be possible to move an asset from one blockchain to another.

Currently, we have a few exciting cross-chain technology platforms within the crypto-space and even in traditional fiat currency transactions. Here are some of them:

Fusion

Fusion is an ambitious crypto-financial platform that aims to enable cross-chain transactions between decentralized assets such as blockchain tokens and cryptocurrencies as well as centralized assets such as bonds, securities, among others.

To achieve this, Fusion allows APIs to integrate several data sources, blockchain tokens, and off-chain values into a single public blockchain network. This way, it is possible to trace any asset and tokens on the network. In the process, multi-coin smart contracts are created, enabling users of different blockchains to interact with each other on a trustless basis.

For security, Fusion utilizes bookkeeping nodes to control the private network keys. These nodes are the parties involved in the transaction. To ensure that a single node does not obtain full control of the assets in the network, Fusion uses a proprietary technology known as Distributed Control Rights Management (DCRM). As the name suggests, the tool distributes the control of private keys throughout the public blockchain so that all parties have equal control of assets.

WanChain

Much like Fusion, WanChain cross-chain project is tailored towards the finance and banking industry. The project aims to bring all digital assets under one blockchain so that users can exchange the assets across different blockchains using the platform’s native coin – Wancoin. All cross-chain transactions are recorded on a tamper-proof distributed ledger system, which makes the platform ideal for banks and other large institutions.

On the security front, WanChain distributes the control of private keys to all nodes on the network, so that one party doesn’t have full control over the digital assets. Unlike Fusion, which supports cross-chain transactions involving traditional assets, WanChain solely focuses on crypto-assets.

Polkadot

Polkadot is a cross-chain project that focuses on enabling the scalability of decentralized computation. To achieve this, the project utilizes a proprietary technology known as parallelizable chains, or in a simpler term, ‘parachains.’

Parachains are smaller forms of blockchains. This means that transactions can be spread over a wide area in the Polkadot blockchain while ensuring high levels of security as provided by the relay chains on which parachains are attached to. The relay chains also enable the parachains to perform independent computations since their communication is secured. By nature, parachains differ in characteristics, making them efficient without being tied down to a specific blockchain language or virtual machine.

Conclusion

For blockchain technology to succeed, it needs to be united under one protocol. This calls for integration and seamless communication of all blockchain projects, incentivizing the wider market to adopt blockchain technology since they can all share relevant information regardless of the project they are using.

Fortunately, with cross-chain technology, blockchain interoperability is becoming a reality allowing users to not only exchange value and information but also save money and time – which would be impossible with independent blockchain projects.

 

Categories
Crypto Daily Topic

The Best Books to Read and Understand Blockchain

Ten years after blockchain arrived, it’s still one of the most misunderstood or plainly ununderstood technologies of our time. This is because it arrived with the fuss of Bitcoin – which was the first of what everyone knew about cryptocurrencies – themselves a misunderstood and sometimes frowned-upon phenomenon.

Ten years after blockchain arrived, it’s still one of the most misunderstood or plainly ununderstood technologies of our time. This is because it arrived with the fuss of Bitcoin – which was the first of what everyone knew about cryptocurrencies – themselves a misunderstood and sometimes frowned-upon phenomenon.

Ten years after blockchain arrived, it’s still one of the most misunderstood or plainly ununderstood technologies of our time. This is because it arrived with the fuss of Bitcoin – which was the first of what everyone knew about cryptocurrencies – themselves a misunderstood and sometimes frowned-upon phenomenon.

For instance, blockchain is still synonymized with Bitcoin despite the two meaning completely different things. Blockchain is the technology that powers Bitcoin and other cryptocurrencies like Ethereum, Dash, and so on.

Blockchain always spurred curiosity from the first day. And it still does – especially with all sorts of industries – from finance to healthcare to supply chains to media exploring the technology. And even more significantly, entire organizations have been established just to further the technology.

As such, many people are increasingly looking to understand this technology better. If you’re one of those people, then you’re in luck. This article brings you the best ten books that you should read to get a firm grip on blockchain tech, as well as on cryptocurrencies – its first application.

That said, why wait? Here are the best books to read and understand blockchain.

i) Blockchain Revolution by Don and Alex Tapscott

This book is written by a father and son duo, and it attempts to illuminate the impact of cryptocurrencies on the world. Per the “Blockchain Revolution,” blockchain technology opens a bigger space that will change what we do on the internet, how we do it, and who can do it. The Tapscotts contend that blockchain will massively change – for the good – the delivery of financial services and how we treat personal identity and data. The technology will also change how we enter into business contracts and will be integral to the Internet of Things technologies.

Blockchain Revolution also discusses how technology is shifting the world of money, transactions, and business. The Tapscotts see blockchain as a simple yet revolutionary technology that provides financial transactions with both anonymity and security. The authors observe that the technology is still nascent, and they recognize that technology is yet to be fully exploited and that it holds even more potential for the future.

ii) The Book of Satoshi by Phil Champagne

Champagne took upon himself the role of compiling the various writings of Satoshi Nakamoto, the still-mysterious originator of Bitcoin. These writings are important because they provide crypto fans with the thinking of the person(s) who brought the world blockchain technology.

As of early 2020, the Nakamoto persona is still shrouded in mystery as far as real life is concerned.  The only way for anyone to get nearly close to knowing this persona is by reading the publications he made in the early days of Bitcoin – when he was corresponding with other developers concerning the cryptocurrency.

The Book of Satoshi comprises chronologically organized emails, online posts, as well as the very original Bitcoin white paper by Nakamoto. It also includes Nakamoto’s illustrations on how Bitcoin works.

iii) The Truth Machine by Michael Casey and Paul Vigna

This book is penned by two Wall Street Journal journalists – both of who have covered the blockchain space for years. In “The Truth Machine,” Casey and Vigna talk about the blockchain wave and its vast potential. They demystify the blockchain and talk about why it can bring back our control of identities, personal data, and assets, and how it can include people who have been excluded from the global financial system.

In a truly journalistic fashion, the two talk about the potential for blockchain to help society rediscover faith in itself. They lay bare the disruption that blockchain promises for all kinds of industries, from legal to finance to shipping.

The duo discusses the potential of blockchain to replace the systems we’ve relied on centuries – some trusted and others not so much – with a radical model powered by blockchain. The two also opine that we should care about blockchain – because it moves humanity forward, not backward.

iv) Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond by Chris Burniske and Jack Tartar

In “Cryptoassets,” Burniske and Tatar explore blockchain from a financial point of view, but they also dive into various technological concepts once in a while. Cryptoassets is written for anyone who is interested in investing in Bitcoin and other cryptocurrencies.

The authors kick off their book by going down the Bitcoin road: its birth during the 2008 financial crisis and its very basics. They do an excellent job of helping the reader understand the key differences between Bitcoin and blockchain technology – which is welcome because many people still mistakenly think the two are the same thing. The two further dive into other assets that have emerged after Bitcoin – including crypto tokens and crypto commodities.

You will find every practical detail about investing in cryptocurrencies here – from crypto wallets to crypto exchanges, to initial coin offerings.

v) The Blockchain Developer by Elad Elrom

This book caters to blockchain developers, which is why you’ll find all the nitty-gritty about how you can create your own blockchain, decentralized applications, and more. The book starts with a broad overview of blockchain technology and its structure before going full force into the granular information that every aspiring developer will be pleased to find.

Some sections in the book also focus on the most well-known blockchains. The author hopes these sections will be helpful to developers who want to create apps for already existing blockchains. Another section of the book also explores blockchain applications beyond cryptocurrencies.

vi) Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money by Nathaniel Popper

Despite its tongue-in-cheek title, this book is very popular among many blockchain cheerleaders many crypto investors and traders owe thanks to this book.  That’s because the book provides an insider view of sorts – Popper brings to readers the first-hand opinions, perspectives, and ideas of some of the earliest movers and shakers in the Bitcoin space.

His engaging manner enables you to see why Bitcoin and, indeed, the blockchain industry have risen to where they are today. Digital Gold is one of the books that went there before other books had, and it’s one of the best starting points for understanding the blockchain.

vii) The Bitcoin Standard: The Decentralized Alternative to Central Banking by Saifedean Ammous

This is another publication that’s right up there with the best in terms of blockchain and blockchain investments. Bitcoin Standard dives deep into the historical context of Bitcoin as well as the unique economic features that have enabled it to become the successful asset it is today. The book also looks at the economic, social, and political implications of the cryptocurrency.

Ammous takes a thrilling walk down the stairs of the history of finance – from when people traded with primitive shells to government debt. With this solid background, he lays down next to the workings of Bitcoin in an intuitive way. He also addresses pertinent questions such as: is Bitcoin wasting energy? Is it for criminals? Who controls it? Can it be killed?

viii) Ethereum: Blockchains, Digital Assets, Smart Contracts, Decentralized Autonomous Organizations by Henning Diedrich

This book is all about recognizing Ethereum for being the blockchain that opened blockchain technology into far more applications than as a platform for digital money. It’s Ethereum that provided developers from all over the world the ability to create smart contracts and ERC-20 token standard through which they can build decentralized apps (DApps) on the Ethereum blockchain.

And this is just what Diedrich gets deep into – the Ethereum platform, smart contracts, decentralized applications, and decentralized autonomous organizations (DAOs). He has attempted to explain this book in the simplest manner possible, making it easy to understand even for newcomers. Better yet, if you’re planning to build your own Dapp on Ethereum, this is your go-to book.

ix) The Internet of Money by Andreas M. Antonopoulos

Andreas M. Antonopoulos is one of the most respected voices in the Bitcoin and blockchain space and a host of the “Let’s Talk Bitcoin” podcast. He’s a Bitcoin evangelist who left his job as a tech consultant to embark fully on popularizing Bitcoin and blockchain.

The Internet of Money, a phrase which, by the way, he was among the first to use, is a collection of cryptocurrency and blockchain talks that he gave in crypto forums all over the world from 2013 to early 2016. In the book, Antonopoulos advocates for and takes an optimistic view of the future of Bitcoin.

x) The Basics of Bitcoins and Blockchains by Antony Lewis

Lewis is one of the founders of itBit, one of the earliest crypto exchanges – and has contributed to the crypto and blockchain space in various ways for almost a decade. In the book, Lewis breaks down blockchain in an enjoyable and easy-to-understand way.

The Basics breaks down cryptocurrencies, Initial Coin Offerings, tokens, enterprise blockchains, and other essentials – without the hype. The book assumes no prior knowledge of the reader in blockchain, cryptocurrencies, cryptography, finance, or any other relevant area. For this reason, it’s a trusty companion for readers who are looking to understand blockchain from the ground up. On his website, Lewis even suggests reading this book “will make you taller, funnier, better-looking and richer.” If you aspire to these qualities, then you should probably try this book.

Final Thoughts

Whether you’re a newcomer in the blockchain space or a long-time enthusiast, these books will provide a fresh perspective into how you conceive the phenomenon. Blockchain is here to stay, and it’s one that’s very likely to take over our entire industries in the future. And despite the technology being discussed every day all over the media, nothing will initiate you better than a good, old-fashioned book.

Categories
Cryptocurrencies

Weaknesses of Blockchain

Blockchain, the technology that underlies cryptocurrencies, constitutes distributed ledgers shared across nodes (computers) participating in the network. These ledgers record data in a sequential fashion after cryptographically securing it. Once data is recorded on the blockchain, it can’t be deleted. This, among many other features of blockchain, like transparency and being deregulated, has given blockchain tech a revolutionary reputation.

Blockchain, the technology that underlies cryptocurrencies, constitutes distributed ledgers shared across nodes (computers) participating in the network. These ledgers record data in a sequential fashion after cryptographically securing it. Once data is recorded on the blockchain, it can’t be deleted. This, among many other features of blockchain, like transparency and being deregulated, has given blockchain tech a revolutionary reputation.

Blockchain, the technology that underlies cryptocurrencies, constitutes distributed ledgers shared across nodes (computers) participating in the network. These ledgers record data in a sequential fashion after cryptographically securing it. Once data is recorded on the blockchain, it can’t be deleted. This, among many other features of blockchain, like transparency and being deregulated, has given blockchain tech a revolutionary reputation.

But some of these features have also proven to be the Achilles heel for blockchain. This article dives into some of the weaknesses of blockchain as it stands today.

i) 51% Attack

Consensus algorithms that help protect blockchains, like the bitcoin blockchain, have proven resilient over the years.

However, there’s the 51% attack threat that’s always hanging over these blockchains like the sword of Damocles. A 51% attack would occur if an entity managed to gain control over 50%+ of the network. This would disrupt the network by allowing such things as double-spending, excluding valid transactions, or altering the correct order of transactions.

ii) Data Modification, Or Lack of It

Once data is recorded on the blockchain, it’s immutable. Immutable means it’s unalterable. While this promotes accountability and reduces chances of fraud, it’s not always favorable for blockchain. Humans are prone to making mistakes, and once inaccurate information is stored on the blockchain, it can never be changed.

iii) No Customer Protection

Blockchain technology operates on the basis of the individual holding power over the asset they are verifying on the blockchain – whether it’s a title deed, a cryptocurrency, etc. Naturally, transactions go sour sometimes. In a scenario where this happens, the only way to overturn the transaction is if both parties agree, which might prove a tall order. This is unlike a centralized system where an arbiter mediates between two conflicting sides.

iv) Slow Settlements

Before any transaction is verified on the blockchain, all nodes must come to a consensus about the validity of the transaction. This is way slower than say, a bank verifying your transaction at the counter. And in the time between when a transaction is lodged and when it’s verified, a malicious actor can enter and execute malicious transactions.

v) Miners Can Be Selfish

On blockchains such as Bitcoin’s, mining is a process that incentivizes network participants to commit computer processing power and then gets rewards in the form of coins or a fraction of transaction keys. However, this has a downside. Miners may not be very concerned about settling the optimal number of transactions. All they care about might be finding the next block as quickly as possible in order to verify it and get rewarded.

There’s also the case of Selfish Mining, a.k.a block withholding attack, in which a miner finds and validates a block but does not broadcast it to the rest of the network. This results in the miner having more ‘proof-of-work’ than other miners in the pool and increasing their odds of unfairly getting more block rewards.

vi) Private Keys

Blockchain uses what are known as private keys to give crypto owners full control over their funds and data. Users need their private keys to access their funds and conduct transactions. This means if you own cryptocurrency, the security of funds is solely on you. In other words, you’re your own bank.  Once a user loses their private key (either by forgetting the seed phrase or misplacing their hardware wallet), their crypto holdings are effectively lost, and there is no recourse.

vii) Inefficiency

Blockchains that, for instance, use proof-of-work consensus mechanisms, are incredibly inefficient. This is because they store the entire history of transactions that ever occurred on the blockchain. This takes up massive storage capacities across devices. To make a transaction, the entire downloading and verification process needs to be completed. This could take several days – spelling crippling inefficiency about the network.

Viii) Storage Issues

As blockchains get more popular, it means more and more users are interacting with the network. This increases the size of the blockchain. We’re talking about hundreds of gigabytes of storage. This puts the network at the risk of losing nodes when people find the ledger too huge to download and store in their devices. And this puts the health of the blockchain in jeopardy since the health of a blockchain partly depends on how many nodes are supporting the network.

ix) Scalability Issues

To demonstrate the scalability issue of blockchain, let’s look at the most widely applied blockchain – the Bitcoin blockchain. It takes around 10 minutes for a transaction to be verified, translating into an average of 7 transactions per second. Compare this with Visa, which processes an average of 2,000 transactions per second. What this means is blockchains are still a long way off from achieving the level of scalability that they would need to be able to serve millions of customers around the world.

Final Thoughts

The idea here is not to discredit blockchain but point out how the technology could improve. Blockchain is not referred to as revolutionary for no reason. Developers are coming up with new solutions for blockchain’s weak spots every other day. Some of these are the Lightning Network, a technology that promises to improve Bitcoin’s scalability by offloading some transaction data off the blockchain so as to facilitate faster transactions. Industries of all types are also exploring technology so as to achieve more efficiency in processes. Despite its weaknesses, blockchain remains a technology to reckon with.

Categories
Crypto Guides

A Simple Guide To Cryptocurrency Fork & Its Types

Introduction

Introduction

Introduction

We have discussed many topics concerning cryptocurrencies in our previous guides. Some of them are basic, and some belong to the intermediate and advanced category. If you have been following us, you would have realized that we have chronologically structured this Crypto Guide series. Because we want you to get a clear understanding of the entire crypto market from a very basic level. Since we have completed most of the basic concepts, let’s go a bit deeper to understand more complex aspects of this space. In our article today, let’s understand the concept of Forking in cryptocurrencies.

What is a cryptocurrency fork?

You must be aware of the software updates that we keep receiving in our smartphones. These software updates typically fix the reported bugs in the existing software version or may add many other features to it to make it more secure and robust. This applies the same for cryptocurrency networks as well. Every network needs an update, and that update is known as ‘Forks.’

However, this is only one of the reasons why Forking is done. There is another crucial reason behind every blockchain Fork that has happened until now. Before understanding that, let’s understand what a Protocol is. It is essentially a set of rules that must be followed by all the existing nodes in a crypto network. Some of the rules in a protocol include Block Size, Rewards, etc. Now, let’s see the actual purpose of a Fork.

The Purpose?

When a significant part of the existing stakeholders like Miners, Developers, etc. do not agree with the updated protocols, the need for the fork arises. In simple words, when a set of important individuals in the network are not ready to follow the newly updated rules, the entire network is forked, and the process is known as Forking. Once the fork is done, a part of the network follows the new rules, and the other set follows the previously existing rules. Now, let’s understand the different types of Forks that occur in a blockchain.

Types of Forks

There are two types of Forks in the world of cryptocurrencies – Hard Fork & Soft Fork.

🍴 Hard Fork

This kind of fork results in the permanent splitting between the existing blockchain. Meaning, the network is completely divided into two and results in two different cryptocurrencies altogether. In a Hard Fork, the old nodes that resist upgrading won’t be able to process the new transactions or add new blocks to the blockchain.

For instance, let’s say after the upgrade, the new block size is changed from 4 MB to 8 MB. If the new node, which is upgraded, processes a block of 6MB, the old nodes consider them as incompatible and reject the block altogether. Each of these blockchains will have a separate community, and developers altogether. One important thing to remember is that all the transactions for the parent blockchain are copied to both of the newly formed ones. That is, if you were a part of a cryptocurrency’s original blockchain, you would be getting cryptos of newly formed ones as well.

To explain this, we would like to take one best example of a hard fork which is the Bitcoin and Bitcoin Cash. Since Bitcoin is the original blockchain, and the hard fork occurred, if you were holding 10 Bitcoins, once the fork is done, you will be receiving ten coins of Bitcoin cash as well.

🍴 Soft Fork

Unlike hard fork, the old nodes that aren’t updated with the new rules can still process the new transactions and add new blocks to the network. Hence there is no need for dividing the entire network into two different networks. The older nodes can upgrade to the new ones whenever they want to, or they can remain the same way. Also, the transaction history will remain intact until the time of the fork.

The only rule here is that the old nodes must not violate the new rules after the soft fork is done. For instance, let’s say a soft fork is done in a blockchain, and the block size is decreased from 8MB to 4 MB. The older nodes can process new transactions and add newer blocks to the network, which are only of size less than 4 MB. If the older nodes try to add a block that is of 6MB, the new nodes will reject it as the updated rules aren’t followed.

That’s about Forking and types of forks in the world of cryptos. These forks are and will continue to be an integral part of the crypto space as the adoption is increasing with time.

Categories
Crypto Guides

Have You Heard of Mimblewimble Blockchain Protocol?

Introduction

Introduction

Introduction

We have been discussing many basics of cryptocurrencies and the groundbreaking tech behind them – Blockchain Technology. By now, we know the properties, features, pros, and cons this revolutionary technology possesses. It is evident that more research is being done on continually improving the blockchain technology, which will eventually make the crypto space better. One such innovation in this space is the Mimblewimble protocol. In this guide, let’s briefly understand what this protocol is all about and its successful applications.

What is Mimblewimble?

Mimblewimble is a protocol that has the potential to improve the scalability and privacy of a blockchain. This tech was published in the mid of 2016, and the first successful application of it was in early 2019. This protocol is built on the principles of advanced cryptography known as Elliptic Curve. The main advantage of using this cryptography technique is that it uses relatively smaller keys. Also, a Mimblewimble network doesn’t have any addresses in them and hence taking lesser space in the block.

To put things in perspective, the maximum block size of the Bitcoin network is 4MB. But the block size of a network that runs on Mimblewimble protocol is a mere 400 KB, which is 10% of the Bitcoin block size. But the pros of this protocol are not just confined to the lesser storage capabilities. As the size of a block is small, the scalability of the network increases. Also, the anonymity factor is an additional advantage this protocol offers.

Working of the Mimblewimble Protocol

To clearly understand the working of this protocol and to know how it’s transactions are different from the rudimentary transactions, let’s understand the inputs and outputs involved in a single Bitcoin transaction. In a typical Bitcoin transaction, if you send ten Bitcoins to another person, the network won’t subtract those ten Bitcoins from your account and add those Bitcoins to another person’s account. Instead, the network considers multiple inputs from the older Bitcoin transactions in order to generate an output. This process doesn’t only consume more space but also reduces the transaction speed.

On the contrary, Mimblewimble protocol works more efficiently by eliminating these inputs and outputs. Instead, a multi-signature is used to replace all of the inputs and outputs. In this case, if you want to send 10 Bitcoins to someone, both of you will get a multi-signature key for verifying the transaction. Also, we have mentioned about the elimination of addresses in the Mimblewimble network. This is made possible by including a Blinding Factor. It is used in the encryption of both the inputs and outputs along with the public and private keys of both the parties.

This blinding factor will remain a secret between you and the person you want to send Bitcoin to. This increases the privacy of the transaction you are making as only you, and the receiver knows about the transactions you made.

Bottom Line

Grin and Beam are the two cryptocurrencies that have successfully implemented the Mimblewimble protocol to their respective networks. So we know that these cryptos are incredibly private and scalable as well. Please do your research to understand the properties of this coin better. Innovations like this bring a lot of hope for us and increase the usage of cryptocurrencies in real life.

Fun Fact: The anonymous inventor of the Mimblewimble technology portrayed himself with the name ‘Tom Elvis Judisor,’ which in French translates to ‘Voldemort,’ the famous Harry Potter character. Also, the name Mimblewimble is taken from the Harry Potter series, which means a tongue-tying curse.

Categories
Crypto Guides

What Should You Know About Security Token Offering (STO)

Introduction

Introduction

Introduction

In our previous guides, we have understood some of the most important fundraising methods like ICO and IEO. These are the ways through which a crypto start-up can raise funds to bring their idea to a reality. But these two methods have paved the way to the raise of one more offering known as STO. STO stands for Security Token Offering, and the entire process behind it resembles the working of an ICO. So in this article, let’s discuss what STO is, how different it is from an ICO, and the pros involved.

What is an STO?

Just like an ICO, a Security Token Offering is launched as a way to raise capital by selling tokens pegged to a firm. As we see, these tokens do not belong to any Crypto company selling their coins. Instead, STO tokens are related to common securities that are speculated by traders and investors across the world. Anything from Stocks and Bonds to Real-Estate Investment Trusts can be offered to the investors in STOs.

Mainly, when we invest in any security, we are investing in a portion of property or company behind that security. For instance, if we are investing in a stock, we are betting on the company behind it. If the company’s performance is better, our stock price will rise, and we make a profit. Using traditional methods, the purchases are documented on a piece of paper, but in STOs, the purchases are recorded in a blockchain.

STOs can be considered as a fusion between the crypto ICOs and the traditional IPOs as its overlays with both of these fundraising methods. It is important to know that SEOs are heavily regulated compared to the ICOs. This is because ICOs are considered utility tokens, and the essential purpose of these tokens is for the usage as an investment, as per the rules. So the ICO platforms do not have to follow most of the strict regulations while reaching out to a broader public.

On the other hand, STOs can only be offered to qualified investors with specific criteria. The fundamental intention to launch as STO is to offer investable asset contracts that are under the purview of securities law. Hence, compared to an ICO, launching an STO is very hard because of the regulations that are in place.

Pros Involved In SEO Participation

💰 Compliance – As discussed, the STO process is heavily regulated compared to ICOs. This will increase accountability and makes sure the entire process is extra transparent because of the transactions being recorded in a blockchain.

💰 Clarity – By now, we know that real-time companies and properties back the security token that has been purchased in an STO. So there is some clarity in the value of the purchase we have made. However, in an ICO, we won’t be sure of the value a token possesses as it is not backed by any asset.  

💰 Low Costs – Just like an ICO, there’s no question of middlemen while purchasing tokens in an STO. Since the transactions are executed in Smart Contracts, there’s no reliability on lawyers and complicated paperwork, which reduces the costs big time while increasing the execution speed.

💰 Increase in Liquidity – As the security tokens purchased in an STO can easily be traded all the time irrespective of the date, the liquidity of many illiquid assets increases.

That’s about STOs and the pros involved in purchasing these Security Tokens. Please make sure to do your due diligence of what STOs to participate in and what security tokens you must buy. All the best.

Categories
Cryptocurrencies

Centralized Vs Decentralized Storage: How Blockchain is Redefining Data Storage

Today, data is more valuable than ever before. Whether it’s individual or company data, we treasure our data because it contains memories, sensitive information, transaction records, and financial records, and so on. In some ways, data is more valuable than money itself. And everyone wants fast and secure access to their data.

Today, data is more valuable than ever before. Whether it’s individual or company data, we treasure our data because it contains memories, sensitive information, transaction records, and financial records, and so on. In some ways, data is more valuable than money itself. And everyone wants fast and secure access to their data.

Today, data is more valuable than ever before. Whether it’s individual or company data, we treasure our data because it contains memories, sensitive information, transaction records, and financial records, and so on. In some ways, data is more valuable than money itself. And everyone wants fast and secure access to their data.

Data storage is the recording of information in a medium such as a computer or another sort of an electronic system. And decentralized storage is the storage of data in multiple servers or computers where files are protected with blockchain and cryptography. Since data is stored across a network of multiple computers, no one authority can regulate or control it.

Centralized storage represents the existing model of storing data where your data is stored on third-party servers. While the centralized storage solution has served us well since the age of the internet, it has inherent weaknesses that make it less than ideal for fast-changing customer preferences on how and when they want their data.

This article prods a little on the evolution of the internet and how it changed the storage function and explores the fallibility of centralized storage in juxtaposition with decentralized storage. We’ll also look at some of the exciting decentralized storage projects that are using blockchain technology to offer more secure, effective, and easy-to-access storage services.

The Evolution of the Internet

In the early days of data storage, we stored and shared data thorough rather rudimentary devices such as floppy disks. Over the years, we progressed to CDs, hard disk drives, and so on. These had a larger space for storage, but the core concept didn’t change. You still had to move around with the data storage device, rendering your data susceptible to loss and damage.

Upon the advent of the internet, the storage and sharing of data got a new form. We can now connect with computers from all over the world and access information, pictures, and data and more anywhere and anytime. We’ve come far from the days when you had to own and maintain your own server to the current pay-as-you-use model, and then to cloud services like Amazon’s S3 that provide better scalability, security, and performance. However, despite all this progress, the current iteration of the internet is still problematic in a number of ways.

The Problems with Traditional Internet

Censorship

The current centralized model of the internet renders it vulnerable to the whims of authoritarianism. An example is China, in which the online encyclopedia – Wikipedia, is blocked. Or when governments of tyrannical countries shut down the internet during an uprising. With decentralized platforms, people from such countries can still access information.

Relinquishing Control of Data

With centralized storage, companies and users usually hand over data to third party services. From then on, the data is beyond their control, as are the privacy settings protecting that data. Also, the party that you’re entrusting to store your data is more than likely only incentivized by profit. As such, they’ll make decisions that advance their bottom-line without much regard for your business model. A good example is Google’s change in the algorithm, which has put many marketing companies out of business.

Mismanaging of Data

Everyone knows about the Facebook and Cambridge Analytical scandal. Due to negligence by the social media giant, the Cambridge Analytica was able to put its hands on the data of millions of Facebook users and use that data to manipulate elections in several countries. The data was so eerily detailed that the psychographic profiles the company created could accurately suggest what kind of advertisement would be persuasive enough for an individual in a given location for a certain political end.

Another mismanagement debacle is the Deep Roots Analytics case in which the data firm stored details of 198 million Americans on a cloud server for almost two weeks without password protection. The data included names, email, and telephone contacts, home addresses, voter IDs, etc.

Expensive

To put it mildly, centralized data storage is expensive. To begin with, renting cloud storage is expensive on its own. And when you access it over and over again, the bills pile on. Also, costs are arbitrarily determined by the hosting company with little or no say from clients, or no incentive to use the service at all.

Advantages of Centralized Storage

Advanced Security

With decentralized storage, users’ files are split across multiple nodes in the network. Since the data is stored in all those nodes, it’s more secure as there’s no single point of failure. 

Higher Liveness

Liveness is a computing term to describe the ability of a system to stay up and running, even if certain parts of that system are not functioning optimally. In a centralized system, once the server fails for any reason, it brings down the entire system with it.

Decentralized Storage Projects

Rootstock (RSK)

Rootstock is a smart contract platform connected to the bitcoin blockchain through a sidechain. It features a technology stack called Rootstock Infrastructure Framework Open Standard (RIFOS). RIFOS is currently working on a storage application called ‘RIF Storage.’ RIF will improve storage in the following ways:

  • It will feature a unified interface that will allow for the encrypted and decentralized storage and streaming of information
  • It will offer a variety of options for users – from decentralized swarm storage to cloud and physical storage

On the RIF platform, you will also access several decentralized storage services such as IPFS and Swarm.

The partnership between RIF and Swarm, a distributed storage platform and content distribution infrastructure, will see to the following:

  • An incentivization system for users, combined with  a settlement and payment mechanism
  • The building of accounting functionalities between nodes
  • Enhance interoperability and antifragility to strengthen Swarm as a multi-blockchain decentralized storage platform.

Sia

Sia is a decentralized, blockchain-based cloud storage platform. Here, users can interact with each other in a peer-to-peer (P2P), secure and censorship-resistant environment. The Sia model works this way: individuals with extra hard drive space can rent it out and earn money from it, and individuals who need storage space can lease it at little cost.

And unlike centralized storage platforms where you pay more when you access your files for more than a preset frequency, the Sia platform allows you to upload and download files however much you want, as long as the contract funds remain in place. Also, renters are protected from fraud thanks to Sia’s proof-of-storage concept that ensures hosts only receive payment when they present proof of storage.

In this peer-to-peer model, the hosts have the right to advertise their services and also turn down storage requests for data that’s too sensitive, ethically ambiguous, or illegal. On their part, renters have the right to split up their files between various hosts, increasing their safety. They can also pay extra to receive special treatment, such as faster upload speeds and other preferential treatment.

Storj

Storj is an open-source, decentralized storage solution built on Ethereum. It features a suite of decentralized applications that allow you to store and share data in a secure environment thanks to encryption, sharding, and a distributed hash table.

Sharding is a process that fragments the files so that they are shared between users in the network. Anytime you want to access a file, Storj locates all the shards and pieces them together using the hash tables. The files are encrypted before they are shared, and only the owner can access or view them. And even if one of the nodes sharing the files goes down, you can still access the file.

Concluding Thoughts

Decentralized storage could turn upside down the storage function as we know it, thanks to a P2P, a highly secure model, and the freedom to access info and data anywhere and anytime. These projects are some of the trailblazers in this space, and we can be assured of other projects with more amazing and user-interactive features. It will be fascinating to see how this space evolves in the coming years.

 

Categories
Cryptocurrencies

A Comprehensive Guide To Siacoin 

Blockchain’s first case was Bitcoin – which hoped to solve the problem of double-spending and the centralization of finance. Since then, thousands of cryptos have mushroomed, each with a promise to solve a problem that we may have not even known existed before, but whose solution we truly need.

Blockchain’s first case was Bitcoin – which hoped to solve the problem of double-spending and the centralization of finance. Since then, thousands of cryptos have mushroomed, each with a promise to solve a problem that we may have not even known existed before, but whose solution we truly need.

Blockchain’s first case was Bitcoin – which hoped to solve the problem of double-spending and the centralization of finance. Since then, thousands of cryptos have mushroomed, each with a promise to solve a problem that we may have not even known existed before, but whose solution we truly need.

Not many people know they can rent that extra space in their hard drive and get paid, and not many know they can buy storage space from someone on the other side of the world, and very affordably for that matter.

This is what Sia promises to do – provide a decentralized, peer-to-peer marketplace that people can sell and buy cloud storage services. Simply put, if you have idle hard drive space, you can rent it via Sia, and if you need cloud storage space, you can purchase it at a fraction of the cost that you would have spent via a centralized platform.

This article breaks down everything you need to know about Sia, including what the platform is all about, the creative forces behind it, how it works, and how to grab Siacoins.

The Team behind Sia

Sia is a brainchild of David Vorick and Luke Champine of Nebuolus Inc, a Boston-based startup. Both developers are graduates of Rensselaer Polytechnic. The two first presented the idea at HackMIT 2013, where it received positive feedback.

The idea was simple – what if all the idle space in hard drives all over the world could be brought together in an affordable, decentralized cloud storage platform?

The Problem with Centralized Cloud Storage

Before we see why Sia is special, let’s see why the existing cloud storage model is fundamentally flawed:

Giving Over Control of Data

When companies hand over their data to third party companies, they also give over control over that data. Not only are privacy protocols beyond their control, but they may also accidentally share data they never meant to in the first place.

Vulnerability to Hacking

Centralized systems usually have a single point of failure and hence susceptible to hacking. A good illustration of this is the 2017 Equifax hack in which the data of more than 145 million Americans was stolen from the credit report service. Another is the Apple iCloud attack in 2014 that saw private images of famous people posted on sites like 4chan, Imgur and Reddit.

Misuse of User Data

Facebook’s Cambridge Analytica scandal illustrates best how third parties can mismanage their users’ data. Facebook’s design allowed the company to get its hands on more than 87 million users’ data, including public profile, city of residence, page likes, and even news feed, timeline and private messages. They then used this information to create psychographic profiles that were used by politicians to sway elections in several countries.

Bring Your Own Device

Bring Your Own Device (BYOD) is another problem with third-party cloud storage. This is the case when companies tell employees to bring their own devices for work. Companies do this because either they don’t have the resources to buy IT equipment or employee devices’ specs are more powerful than the companies’.  The problem is, BYOD poses certain security risks. For instance, when these devices get lost, it puts clients’ privacy at risk. And in the case of security breaches, it’s difficult to identify the point of failure amongst all the employee devices.

How Sia’s Storage Procedure Works

The Siacoin storage procedure features its peer-to-peer storage model, ‘file contract’ system, and ‘proof of storage.’

File Contracts

File contracts are Sia’s version of smart contracts. Through these contracts, renters (clients) and hosts (providers) can conduct business within the context of a predetermined and well-defined set of rules.  If two parties wish to work together, they draft a file contract. The file contract contains the term of storage agreement and is meant to ensure each party meets its obligations. As the contract is stored in a public ledger, the terms set therein are immutable (unalterable) and hence verifiable by both parties at any time.

  • The client pays a certain amount (‘allowance’) of Siacoins that will finance the storage and bandwidth for the contract period. A contract’s default length is 13 weeks. 
  • The allowance is set up within the wallet, after which the renter’s software instantly identifies 50 optimal hosts for them, based on their scoring.
  • The host takes up a fraction of s Siacoins and sets it as collateral. The higher the collateral, the higher the score during a host’s selection process.
  • The client plus the identified 50 hosts sign the file contract, upon which it is submitted to the blockchain.
  • 3.9% of the total funds of the contract is paid as commission to Siafund holders.

P2P Storage System

The Sia ecosystem comprises of two main components – the renters (clients) and hosts (providers). Renters pay hosts with Siacoins for storage space. They can also negotiate the storage fee with hosts directly.

Hosts play a huge and important role in the Sia ecosystem, and as such, it’s within their purview to:

  • Advertise and promote their storage resources
  • Reject a client’s request if they deem the data in question to be especially sensitive, ethically wrong, or illegal

And on their part, renters have the freedom to:

  • Protect their files by splitting them up and sharing them between two different providers – for an added layer of protection
  • Pay more than the stated fees to providers to receive special treatment such as faster upload speeds

Proof of Storage

Sia has a ‘proof of storage’ concept that’s meant to protect clients from bad actors. Before a host receives payment, they must present to the network proof within the time set in the file contract. If they fail to provide the proof of storage within that specified time, the payment goes to a ‘missed proof address’ until they present proof. Depending on the circumstances, the host can even be fined for negligence. And when they miss too many proofs of storage mandates, the contract may be terminated for good.

However, when a host successfully presents proof of storage, they are awarded payment, which is sent to a valid proof of address. But they have to meet certain ‘spend’ conditions, e.g., time locks and network signatures before they can access the funds. 

Tokenomics of Sia

As of Feb 25, 2020, Siacoin registered the following values. A price of $0. 002452, while placing at #58 in market rank. It had a market cap of $192, 546, 342, and a 24-hour volume of $4, 606, 191. Its total supply was 41, 817, 047, 634 SC, with an all-time high of $0.111708 on Jan 06, 2018, and an all-time low of 0.000011 on Dec 01, 2015.

Siacoin and Siafund

Sia’s platform operates on a dual-token system: Siacoin (SC) and Siafunds (SF). Siacoin functions as the utility token, while Siafunds are to help the development of the project without relying on external donations. Siacoin’s supply is not capped, and all the tokens must eventually be mined. In the beginning, miners got 300,000 coins Siacoins as block rewards, but this reward will decrease up to 30,000 coins.

On the other hand, there are 10,000 SF in existence, all pre-mined. The company behind Sia holds 8835 of these coins, while the rest have been distributed in a crowdfund to help fund the project.

Sia Coin Mining

Siacoin uses the proof of work consensus mechanism. This means they have miners mining Siacoins using specialized mining computers called ASICS (application-specific integrated circuit). The history of Siacoin mining has a bit of controversy.

In 2017, David Vorick, lead developer for Sia, announced that Nebulous would launch a company called Obelisk to manufacture ASICS specifically for mining Sia. Members of the community supported the ASIC project by pre-ordering and contributing millions of dollars.

At the same time, ASIC manufacturing behemoths Bitmain and Innosilicon were already in the process of developing Sia ASICS. Some in the Sia community did not want a future where miners monopolized Sia mining. As such, they demanded a hard fork to prevent this. But the hard fork proposition was also opposed by a significant chunk of the Sia community. Ultimately, the hard fork faction won as Sia’s core developers implemented a hard fork.

The hard fork was conducted on Oct 31. 2018. The goal was to lock out Bitmain miners and only allow Obelisk miners to support the network. Vorick stated that the hard fork was a result of the community’s distrust towards Bitmain, as well as Innosilicon’s dominance over Siacoin, which controlled up to 37.5% of Sia’s mining hash rate. 

A large section of the community was content with the results, but others, especially those who had invested in Innosilicon, dissented. This is the group that stuck with the old Sia chain, which they called SiaClassic.

Why Sia?

Sia offers several advantages over existing cloud storage services.

Privacy: All data that passes through Sia is encrypted, meaning you’re always in control over your data. This is unlike current cloud services where the host has access to any data that you commit to them.

Security: The encryption of data means it’s insured from the pitfalls of the traditional model, such as vulnerability to hacking. Also, the ability to split your data between multiple providers boosts its security.

Affordability: Sia’s storage services are way more pocket-friendly than the traditional model. As an example, storing one terabyte of data via Sia can cost you just $200, while the same amount will cost $2300 on Amazon’s cloud storage service.

Where to Buy and Store Siacoin

You can acquire SC by trading Bitcoin for it in several exchanges, including Binance, Bittrex, Kraken, Cointree, Coinswitch, Poloniex, Huobi, and so on.

You can also get SC via mining from Luxor or SiaMining.

The Sia team has customized two wallets for SC: Sia Daemon and Sia UI. Sia Daemon is offered on Github and can be used per a user’s preferred Command Line Interface (CLI). This wallet supports Mac, Linux, and Windows. Sia UI is for the less than tech-savvy and comes with more user-friendly features.

Final Thoughts

In a space full of unfulfilled promises, Siacoin stands out as a service that you can actually access today. It’s a win for everyone involved: hosts can earn from the extra space in their hard drive, while renters can buy space in a decentralized, highly-secure environment for very little cost. What’s there not to like?

 

Categories
Cryptocurrencies

Private, Public and Consortium Blockchains

Bitcoin brought with it blockchain technology – the technology that allows digital information to be distributed but not edited or copied. After it became a hit with Bitcoin, eager innovators from all over the world have made it their mission to replicate it in nearly every conceivable industry. From finance to healthcare to supply chains, industries are experimenting with blockchain to improve efficiency, transparency, and accountability in their systems.

Bitcoin brought with it blockchain technology – the technology that allows digital information to be distributed but not edited or copied. After it became a hit with Bitcoin, eager innovators from all over the world have made it their mission to replicate it in nearly every conceivable industry. From finance to healthcare to supply chains, industries are experimenting with blockchain to improve efficiency, transparency, and accountability in their systems.

Bitcoin brought with it blockchain technology – the technology that allows digital information to be distributed but not edited or copied. After it became a hit with Bitcoin, eager innovators from all over the world have made it their mission to replicate it in nearly every conceivable industry. From finance to healthcare to supply chains, industries are experimenting with blockchain to improve efficiency, transparency, and accountability in their systems.

What is Blockchain? 

A blockchain is a database whose entries cannot be deleted or edited but only distributed. It’s a time-stamped series of transactions that are immutable and whose data is managed by a network of computers.

Cryptocurrency, a form of digital money that prevents double-spending, is so far the dominant application of blockchain. Blockchain as a concept had been floated around the computer science space from as early as 1991, but only materialized 18 years later when Satoshi Nakamoto, the anonymous creator of Bitcoin, employed it as the underlying technology of Bitcoin. 

Now, as its appeal has increased in recent years, it has been borrowed for use in all kinds of digital information.

Today, there are three kinds of blockchains: private, public, and consortium chains. This article sets to exploring each of these. Before that, let’s point out three characteristics all three share. 

☑️ An append-only ledger – this means that on a blockchain, you can’t modify or alter what’s already recorded – you can only add to the last block. This procedure greatly reduces the chances of fraud.

☑️ A network of peers – all network participants (called nodes) hold a copy of the database. This setup promotes fairness and autonomy. 

☑️ A consensus mechanism – a blockchain network must have a mechanism through which nodes can agree upon the authenticity of a transaction. This feature promotes a democratic – everyone-has-a-say – process.

What is a Public Blockchain?

A public blockchain is an open-source blockchain. That means it’s open to the public. Anyone and everyone of every age, nationality, or social status is welcome to join the network, have a say, and take part in core activities. Public blockchains are also called ‘permissionless’ since you don’t need permission from anyone to interact with the protocol.

The idea behind public blockchains is self-governance and autonomy. No one dictates the rules, and anyone can join and leave as they wish. As well, all transactions that take place on a public blockchain are entirely open for anyone to see.

Public blockchains are ‘censorship-resistant’ in that they are run by users all over the world, making it hard for any authority or government to control or shut them down.

Also, public blockchains have a token that incentivizes various participants of the network to keep the network active.

The Good

Public blockchains are highly secure, courtesy of being run by computers from all over the world.

They ensure privacy for users in that you don’t leave your personally-identifying details on the chain, but rather transaction information like wallet number, time, and amount.

Transactions are peer-to-peer, meaning users are in complete control of their money with no one capable of freezing their funds

The Bad

Public blockchains like Bitcoin consume a lot of energy, which is expensive and bad for the environment

The majority of public blockchains are pseudonymous, meaning users do not have absolute and inviolable privacy or anonymity.

Some users of the network might have malicious intent, including hacking, stealing of tokens, or network clogging.

Public Blockchain Use Case

Bitcoin is the first-ever and the most well-known application of a public blockchain. 

Bitcoin transactions can be examined by anyone on the Blockchain Explorer. Other public blockchains are Ethereum, Litecoin, ZCash, Monero, Dash, and so on.

What is a Private Blockchain?

A private blockchain is one in which you need authentic and verified credentials to gain access. A private blockchain differs from a public one in that you need permission, depending on your position in the system’s hierarchy, to contribute and maintain the network. People at the top of the hierarchy or those with express access can also override processes as they deem necessary.

A private blockchain makes sense in a business context where managers want to improve efficiency but don’t want to put company data on the public blockchain. As well, a business has the right to amp up privacy restrictions any time they deem fit.

In a private blockchain, there’s the question of who enters entries, who can see updated transactions, who can begin a process, and so on.

The Good

Since only specific users can control the network, there’s no waiting times or periods of high demand which would slow down the network.

Entities that use private blockchains can keep sensitive data from the public while also realizing improved levels of efficiency.

Private blockchains do not have to provide any incentives to participants; neither do they consume massive amounts of energy. 

There is no possibility of downtimes arising from a spike in demand.

The Bad

Without support from computer users all over the world, a private blockchain is prone to stunted growth. It can also be slow to scale up and meet changing customer needs. 

Since they are centralized, public blockchains are susceptible to human error, manipulation, abuse, and other unfair dealings.

Use Case of a Private Blockchain

The best use case of a private blockchain is Hyperledger Fabric, a permissioned blockchain that businesses can deploy on their platform. The blockchain is also available in a plug and play mode, allowing businesses to set it up anytime and plug off when they don’t need to use it.

Walmart is a well-known user of Hyperledger Fabric. The retail giant can now trace the origin of more than 25 food products, from farm to store, to ensure quality levels and food safety.

What is a Consortium Blockchain?

The consortium blockchain is a type of blockchain that combines elements of both public and private blockchains. This is the distinction between a consortium blockchain and either of the two other types:  in a public blockchain, anyone can contribute to the network by inputting entries, validating blocks, etc. In a private blockchain, only a few entities have access to the chain and have the authority to initiate processes, enter entries, and so on. On a consortium blockchain, it’s a handful of equally powerful participants that can access the chain.

After that distinction, the rules of the system are not cast in stone. Some selected individuals may be the only ones who can view the chain, or it can be everyone in the consortium. As long as decisions are arrived at by consensus, they can be rolled out to the satisfaction of all parties.

Consortium blockchains rely significantly on the integrity of the validators. Provided a certain threshold of the validators can act with integrity, the network will work without issue.

Consortium blockchains make sense in the context where multiple organizations operate in the same industry and see it fit to collaborate on certain aspects of their business. This way, they can save on costs and function better individually and collectively. An organization would be motivated to join such a consortium courtesy of information and insights into the industry that they’d gain from other industry players. Sometimes the organizations involved can be termed “frenemies” since they are working together but also competing against each other.

Use Cases of Consortium Blockchains

There are currently many consortium blockchains that exist all over the world. Let’s briefly look at a few below:

☑️BankChain, a platform for banks whose goal is to explore, build, and implement blockchain software. Members of the BankChain community include Deutsche Bank, Bank of Baroda, Lulu Exchange, Kotak Bank, etc. 

☑️B3i, a community of insurers and reinsurers that attempts to improve industry efficiency through blockchain. Members include Liberty Mutual, Swiss Re, SBI Group, Tokio Marine, Allianz, and so on.

☑️Enterprise Ethereum Alliance (EEA), a consortium that aims to promote Enterprise Ethereum, an organization that delivers both public and private Ethereum blockchain for businesses.

Final Words

Blockchain has evolved a lot from the days when it was associated with Bitcoin only. It’s definitely exciting to see it as the new and hot technology that industries of all types are scrambling to get a piece of. And understandably so, because it embodies features that are a first, and which have the potential to revolutionize not just how we do business but also society itself. 

Companies need to choose what type of blockchain they want to get involved with, depending on their end goal and overall objective. Meanwhile, blockchain enthusiasts will be watching for new developments in this thrilling space.

Categories
Crypto Daily Topic Cryptocurrencies

What is Bumo Blockchain?

Before we say a single thing about Bumo blockchain, we need to talk about blockchain. Blockchain is a publicly distributed ledger that records transactions between parties permanently, transparently, and in a peer-to-peer manner.  

Before we say a single thing about Bumo blockchain, we need to talk about blockchain. Blockchain is a publicly distributed ledger that records transactions between parties permanently, transparently, and in a peer-to-peer manner.  

Before we say a single thing about Bumo blockchain, we need to talk about blockchain. Blockchain is a publicly distributed ledger that records transactions between parties permanently, transparently, and in a peer-to-peer manner.  

The concept of blockchain existed in the developer community for years. Still, it only came to life in 2008 when a person/people under the pseudonym Satoshi Nakamoto created a blockchain to serve as the underlying technology under the world’s first cryptocurrency – Bitcoin.

Since then, numerous cryptocurrencies have been created by developers all over the world – either running on their own blockchains or other cryptocurrencies’ blockchains.  The technology has also broken out of the cryptocurrency application and has been adopted in other industries – from finance to healthcare to supply chain and so on. These applications represent the private, enterprise side, of blockchain.

What is Bumo?

Bumo is a next-generation enterprise-grade public blockchain that hopes to host what it calls a ‘ubiquitous’ value transfer, smart contracts, and decentralized applications platform. The Bumo project is still in beta, i.e., still in development. 

Let’s look at some of Bumo’s unique selling points right off the park:

  • Two or more users can create an account together, thanks to what the platform calls “individual account weightage”
  • A Merkle-Patricia Tree to help store data efficiently
  • A “trailer” system that helps segregate on-chain and off-chain data
  • An ‘Orbit’ infrastructure helping support Bumo’s 2-layer multiform architecture
  • A 2-layer multi-chain consensus structure that’ll enable up to 10,000 transactions per second
  • A “Canal” system to facilitate interoperability
  • A robust and friendly toolkit for developers to create smart contracts
  • The ability for developers to build apps that aren’t necessarily backed by a smart contract

In this guide, we’ll look at these features in greater detail and see what Bumo hopes to do differently for the blockchain ecosystem. To do that, we first need to talk about the inherent problems with blockchain right now.  

Problems with the Blockchain

Scalability

The first and second-generation blockchain’s scalability issue refers to their inability to handle high-volume transactions within a short period of time – hence they can’t be used to serve millions of people all over the world.

One reason for this is the mining-based verification mechanism that requires miners to verify transactions and then record the verified transactions in the blockchain. This creates a backlog of transactions and a slow, overloaded network since a miner can only mine a certain number of transactions at any time.

The other reason is the 1MB sized blocks on the Bitcoin blockchain, which severely limits how much data any one block can hold. This means your transactions have to wait in a queue for roughly 10 minutes. On the Ethereum blockchain, there are no block size limits, but transactions may take an average of 15 seconds before verification. 

Lack of Interoperability

Interoperability, or lack of it, is another issue with existing blockchains. Existing blockchains e.g., Bitcoin and Ethereum, are not built to be able to interact with each other. This is why crypto exchanges have the power that they do since they provide a much-needed portal on which different cryptos can interact with each other.

But exchanges are centralized entities, which goes against the decentralization principle of cryptocurrencies. Besides, centralization makes cryptocurrencies vulnerable to hacking and blackouts, which can stall services.

The lack of interoperability also means mainstream adoption of the blockchain is impossible. This is because, for blockchain technology to be integrated into the mainstream, it needs to be able to interact with existing systems.

BUMO is a next-generation blockchain that’s going to be catering to businesses. It comprises of two-layer chains that will help streamline transactions on the blockchain. The Bumo system will also be interoperable with both heterogeneous and homogeneous blockchain.  

The Team behind Bumo

Bumo is a vision of four core people: Steven Li, Steven Guo, John Zhao, and Yuliang Zheng. This team has between them a wealth of experience in Physics, blockchain, cryptography, and hashing technology.

Core Features of Bumo

Let’s dive deeper into the core features the Bumo blockchain that makes it stand out: 

A Multisig account

A multisig (multi-signature) is an account owned and controlled by more than one party. The Bumo blockchain uses something known as ‘account weightage’ to give more power of access to some signature holders over others. For example, if three people own a business and they have an account on the Bumo blockchain, the CEO’s approval, for instance, will count more than the other two’s.  This is an approach that the Bumo team hopes will appeal to big companies.

The Merkle Patricia Trie (MPT)

The Merkle Patricia Trie is a tool that combines the technologies of Merkle Tree and Patricia (Practical Algorithm to Retrieve Information Coded in Alphanumeric) Tree. This combination makes it easier to find particular transactions by reducing the time that would be taken to ascertain if that transaction belongs to a particular block or not.

Trailer System for Off-Chain and On-Chain Data

Depending on the characteristics of the data, the Bumo blockchain will differentiate data into off-chain and on-chain data, providing a streamlined system for handling heavy and complex data. This differentiation will help reduce the burden on the blockchain and save on hardware costs because the node network will experience less strain.

Interoperability Feature of the Bumo Blockchain

The Bumo blockchain has the Canal system, which is two-layered – with main chains and cross chains. The main chains comprise collection and validation nodes. The validation nodes provide “high-level” consensus for transactions on the cross-chain.

Cross chains are akin to the routers in a traditional network system. They route data from various blockchains towards the target blockchain. 

BUMO and Smart Contracts

BUMO hopes to be the best destination for smart contracts. The platform will feature these properties which are specifically geared to help it achieve this purpose:

i) Turing complete, or ‘computationally universal,’ which means a contract can solve any problem with the right tools

ii) Fast deployment 

iii) Flexible calls

iv) Reliable execution of smart contracts

v) The Bumo platform features a virtual machine called the BuVM (Bumo Virtual Machine). BuVM has the following properties to enable what Bumo calls “Eco-Friendly Smart Contracts.”

  • More advanced smart contract performance
  • Increased security for smart contracts
  • Multi-language support for smart contracts
  • Developer-friendly tools and environment

Also, the Bumo platform will provide a unique space for app developers, thanks to the following features:

  • Native application programming interface tools
  • WebSocket-like features
  • Ability to create an app or tokenize assets without the need for a smart contract. This is what Bumo calls “Account-based Tokenization Protocol,” in which users will be able to issue tokens by the mere virtue of having an account on the Bumo blockchain.

Benefits of Bumo

☑️The ability to tokenize assets quickly, safely and reliably

☑️A friendly environment for developers to create decentralized applications

☑️The ability to handle up to 10,000 transactions per second

☑️Reduce the costs of operation, maintenance, and exchange of data in the blockchain

☑️It will allow the connection of Internet of Things devices that will create value for thousands of people

☑️It is user-friendly

☑️People can exchange smart contract values faster and safely

☑️It promotes the free flow of digital assets

Final Thoughts

The Bumo blockchain is poised to reinvent several aspects of blockchain and stir the crypto space for the better. If Bumo succeeds, it’s very likely the blockchain world will bid goodbye problems like scalability issues, lack of interoperability, and the need to be well-versed in programing language so as to create applications. Will the Bumo team deliver, or is it another overhyped blockchain project? As with many things in blockchain tech, only time will tell. 

Categories
Cryptocurrencies

Exciting Use Cases of Decentralized Finance

Today’s finance landscape is inherently unequal – with millions locked out of opportunities due to their location, being undocumented, or having low economic means.  Few would have foreseen that the technology that brought us Bitcoin could potentially solve this enduring problem.  Decentralized finance (DeFi) is all of these things: an idea, a belief system, a […]

Today’s finance landscape is inherently unequal – with millions locked out of opportunities due to their location, being undocumented, or having low economic means.  Few would have foreseen that the technology that brought us Bitcoin could potentially solve this enduring problem.  Decentralized finance (DeFi) is all of these things: an idea, a belief system, a […]

Today’s finance landscape is inherently unequal – with millions locked out of opportunities due to their location, being undocumented, or having low economic means. 

Few would have foreseen that the technology that brought us Bitcoin could potentially solve this enduring problem. 

Decentralized finance (DeFi) is all of these things: an idea, a belief system, a movement, and a blockchain-based technology that promises to eradicate the aforementioned barriers to financial access, or to put it another way, to democratize finance. Already, decentralized finance is making waves as DeFi platforms and products increase by the day. 

In this guide, we explore some uses cases of this new and exciting technology, as well as some of the real-life applications that are making brave inroads into the space. 

But before we do that, let’s kick off with a primer on what exactly DeFi is, plus why we need it. 

What is Decentralized Finance? 

Decentralized finance is an emerging, blockchain-based ecosystem of finance that seeks to expand finance.  

It aims to make financial services more accessible and inclusive for everyone by making financial markets and products open-source, transparent, and under no particular authority. 

In DeFi world, everyone would have absolute control over their assets and interact with other participants through peer-to-peer (P2P), decentralized applications (DApps). 

What Problems Does DeFi Solve? 

DeFi’s chief goal is to decentralize financial services and make them available to all – an aspect that today’s centralized financial system is sorely lacking. As such, DeFi solves two main problems which we’ll look at in greater detail below: 

Inequality in Finance. Today, millions of people are locked out of access to loans, mortgages, a bank account, savings, insurance, and so on. DeFi aims to eradicate or alleviate this problem by creating a finance system that has no systemic or institutional barriers. All one would need is a smartphone and internet connectivity to access services.  

Financial Censorship. Today’s centralized finance system means that governments, banks, or intermediaries can restrict or prevent an individual’s or a company’s access to their assets. For example, the government could freeze the assets of a company that openly defies it, or an individual that it perceives to be rogue. By contrast, with DeFi, financial products are under no one’s control. Hence no one can arbitrarily restrict an individual’s or company’s assets. 

What Are the Advantages of DeFi?

Why should you care about DeFi? What difference does it propose to the current financial system? These are some of the advantages of DeFi: 

Autonomy: DeFi applications do not need a go-between party in transactions or an arbitrator in case of disputes. All terms are set in the code, and users have complete autonomy over their funds at any time. This eliminates the costs that would go into providing such intermediary services.   

Security: Since DeFi services are set up on decentralized blockchains, single points of failure are eliminated. Data is recorded on the blockchain and distributed across computers all over the world, reducing the chances of services being compromised.

Tradability: Thanks to DeFi, the tokenization of assets is now possible. Tokenization means one can quickly sell an asset that was previously illiquid (not fast-moving), as well as divide an asset into parts that enable many market participants to buy just the portion they can afford, instead of losing out on a whole investment.

Accessibility. The world’s unbanked can access financial services that they previously couldn’t, thanks to DeFi. 

What Are The Use Cases For DeFi? 

The following are some of the potential use cases for DeFi: 

i. Payments

DeFi platforms or applications can be used to create blockchain-based protocols that allow individuals to have wallets via which they can make instant and cheaper payments. 

ii. Borrowing and Lending

DeFi enables open lending structures that have numerous advantages over the traditional borrowing and lending system, including: 

  • Ultrafast transaction settlements 
  • Ability to back up digital assets with real-life assets 
  • Credit checks are not necessary; hence more people can get access to loans
  • Potential standardization and interoperability of financial services, making them frictionless across various providers 
  • Democratizes the borrowing and lending process by providing borrowers with a wider pool of potential lenders.    

iii. Stablecoins

A stablecoin is an asset that attempts to circumvent the price swings in cryptocurrencies, making them suitable as mediums of exchange and stores of value. Stable coins thus provide the stability associated with fiat currencies while maintaining the benefits of cryptocurrency such as security, fast processing speeds, and overall efficiency. 

iv. Tokenization

This is the process of digitizing a real-world asset to increase its liquidity in the marketplace. Tokenization creates asset-backed tokens – which are digital tokens backed by real-world assets. Through tokenization, assets that traditionally have low liquidity, e.g., jewelry, real estate, and art, can quickly move their position in the marketplace. Also, thanks to the ability to divide assets into portions through tokenization, non-high income earners can get a piece of a product or investment that they previously couldn’t afford.  

v. Decentralized Exchanges (DExes)

Decentralized exchanges are platforms where users can exchange digital assets without relying on a third party, as in a centralized exchange. Instead, trades occur between parties in a P2P, automated process. Examples of DExes include Binance DEX, Radar Relay, and EtherDelta. 

vi. Issuance Platforms

An issuance platform is a service that allows people to tokenize their assets by providing them with the tools to create digital tokens. An issuance platform provides the necessary technical and legal infrastructure to ensure a seamless tokenizing process for users.   

Thanks to these platforms, individuals and companies can raise funds without the costs associated with intermediaries such as banks, credit unions, lawyers, etc. They also open up investment opportunities for investors of all net worth levels, origin, or geographical location. 

vii. Open Marketplaces

With open marketplaces, DeFi reimagines the age-old idea of a marketplace by turning it into a decentralized platform where people can exchange things of value. 

People can buy and sell non-fungible tokens (ones that are unique and thus not interchangeable, as opposed to fungible tokens such as Bitcoins that are interchangeable) such as trading cards, collectibles, domain names, game items, and so on. All transactions take place via blockchain-based smart contracts, removing the need for a central authority who would normally dictate the rules of the marketplace.  

viii. Prediction Markets

A prediction market is a group of participants who speculate on the outcome of future events – from elections to games to weather to natural disasters to commodity prices to major political events. 

DeFi provides a decentralized take on traditional betting markets such as casinos. Decentralized prediction markets are censorship-resistant, thus democratizing the betting space. For instance, individuals can participate in betting on their favorite sports events even if they live in jurisdictions where betting is restricted. It also means that anyone can create a bet without the approval of a central authority like, for instance, the administrator of a betting platform.

ix. Decentralized Autonomous Organizations (DAOs)

These are organizations that allow individuals to create organizations whose rules and bylaws are encoded on the blockchain. DAOs represent the highest degree of organizational transparency, with every process automated and with minimal to no human input needed. They solve the problems of centralized, hierarchical setups such as corruption, arbitrary decision making, delayed decision making, and so on. 

Real-Life Applications of DeFi

The DeFi world is up and running with applications that are already making their impact felt. The following are some of the most popular DeFi use cases out there today:

☑️MakerDAO. This is a decentralized autonomous organization running atop Ethereum’s blockchain. It has a dual coin system that aims to mitigate the volatility of cryptocurrency. The MakerDao platform has two tokens: Maker – which is volatile and fluctuates like any other crypto and is used to govern the Maker platform, and DAI, a decentralized stablecoin whose value is fixed in a 1DAI = 1USD formula. Makercoin utilizes external market economics to allow DAI to be a stablecoin.  

☑️Dharma Protocol. This is a finance application based on the Ethereum blockchain that democratizes borrowing and lending. As a lending platform, Dharma has all the works of a traditional lending platform – except that it expands finance in that anyone, anywhere, can access the Dharma platform as long as they have an internet connection. 

☑️Uniswap. Uniswap is an Ethereum blockchain-based decentralized exchange that allows individuals to trade ether and ERC-20 tokens. Thanks to its decentralized protocol, there is no need for middlemen – which saves costs, and users have complete autonomy over their crypto holdings.

☑️Bloom. Also, Ethereum-based, Bloom is a credit scoring and identity verification platform that aims to reduce credit fees, increase credit access, make credit histories shareable across countries, and make credit risk assessment fairer. Through Bloom, individuals with little to no credit stand a better chance to get access to loans. 

☑️dYdX This is a DEx that allows traders to exchange cryptocurrency derivatives. Derivatives are financial instruments that derive value from an underlying asset, e.g., Bitcoin futures. Via dYdX, traders can exchange their crypto derivatives of choice in a censorship-free, peer-to-peer, and fairly priced environment. 

Final Thoughts

By creating a financial system that’s open to all, accessible, affordable, and transparent, DeFi promises to wrestle economic power from those at the top and give it back to the people. And it proposes a powerful use of blockchain technology – decentralized financial services ranging from lending to asset issuance, to open marketplaces, to prediction markets, to censorship-free crypto exchanges, and more.

Categories
Crypto Guides

What Is SegWit & Why Is It Required?

Introduction

Introduction

Introduction

There are over two thousand cryptocurrencies and tokens in the market, and all of them have a set of rules to ensure they work properly. These rules are also referred to as protocols, and they are continuously in progress. Similarly to any computer code, mobile phones, and apps, the cryptocurrency protocols must be updated and improved, which means teams of programmers work every day to detect code errors, improve their performance and add new functionality. And SegWit is one of the updates that has been implemented in the Bitcoin protocol.

What is SegWit? 

Pieter Wuille was the man who came up with the idea of SegWit at a Bitcoin conference in 2015. Wuille claimed that SegWit was a possible solution to the flaw in the Bitcoin protocol. SegWit was a proposed solution to the problem of transaction malleability. Transaction malleability is a way of saying that coins can be stolen from the user just by changing tiny pieces of transaction information.

How does transaction malleability work?

Let’s say Bob sends 10BTC to Billy. But, with transaction malleability, Billy can trick Bob into sending him 20BTC instead of 10. The transaction malleability flaw in Bitcoin’s code enables Billy to tamper Bob’s witness before the transaction is confirmed on the blockchain network.

In this case, the transaction ID changes, but the transaction does not (10BTC were still sent from Bob to Billy). Now, Billy contacts Bob, saying that he hasn’t received 10BTC, though he actually has. Since the transaction id was altered, Bob checks and sees that the original transaction hasn’t been confirmed. So, seeing this, Bob sends 10BTC again to Billy. And Billy now receives 10 BTC more and 20 BTC in total.

The patch to transaction malleability

As mentioned earlier, a patch is a solution to this glitch in the Bitcoin protocol. SegWit is a patch designed by Pieter Wuille to bring a stop to transaction malleability. To prevent witness data from being used to alter the transaction ID, Peiter suggested removing it from the transaction. Hence, it is given the SegWit, which is the abbreviation for segregated witnesses, means to remove or separate the witness data.

A segregated witness creates something called as sidechain where witness data is stored aside from the main blockchain. This method efficiently prevents transaction IDs from being changed by dishonest users. Also, a smart thing about SigWit is that it’s backward compatible. So the nodes that are updated with the SegWit protocol can still work with nodes that are not updated yet. Such an update is called a soft fork, as opposed to updates that are not backward compatible, which are called hard forks.

Wuille wanted SegWit to be backward compatible so that the witness data was still recorded on the main blockchain. To solve this problem, he encrypted all the witness data of a block on the SegWit sidechain and then stored this root code on the main blockchain. Hence, transaction malleability was successfully patched without a hard-fork update.

The Pros on SegWit

💡 Patch to the transaction malleability – The problem of the malleability of transactions was solved by SegWit.

💡 Faster Blockchain transactions – SegWit makes the network much lighter. More transactions can be performed without increasing the overall block size.

💡 Room for more development – Things don’t end just at transaction malleability. If the use of blockchain increases drastically, the issue of scalability must be figured. And SegWit helped lightning network technology come to reality.

Conclusion

The problem of transaction malleability was a real concern to Bitcoin. A patch to it was really in need. Hence, Pieter Wuille came up with a successful patch to it. And this brought talks about the bright future of the Bitcoin platform. We hope you understood the concept of segregated witness (SegWit). If you have any questions, let us know in the comments below. Cheers!

Categories
Crypto Guides

Lightning Network – A Potential Solution To Blockchain Scalability Issue?

Introduction

Introduction

Introduction

Cryptocurrencies that were in the boom a few years back are still in the business, and it is believed that their decentralized blockchain technology will keep them alive for a very long time.

The transactions on credit cards and debit cards are different from that of transactions on cryptocurrencies. VISA (a payment provider) processes about 4,000 transactions per second. In fact, it has a capacity of 65,000 transactions to process per second. But, a typical Bitcoin Blockchain, on the other hand, can process only up to seven transactions per second with a block size of 2MB. Hence, there is a clear issue of scalability. Also, the Bitcoin transaction costs are pretty high when compared to other traditional transaction methods. Thus, to solve this issue, the ‘Lightning Network’ technology came into existence.

What is the Lightning Network technology, and why do we need it?

The Lightning Network technology is a system that is used to process a transaction instantly. This technology was developed to send and receive payments instantly without any hassle and also to reduce transaction fees. In the next section, let’s see the backend of this technology.

Working of the Lighting Network Technology

⚡ A multi-signature wallet with some amount of Bitcoins is set up either by the sender or the receiver.

⚡ The public blockchain network keeps a record of the user’s wallet address and the balance sheet* (smart contract). This process is referred to as the payment channel.

*Balance sheet – An agreement that proves how much Bitcoin belongs to whom.

⚡ When the payment channel is wholly set, the parties can make any number of transactions without the involvement of the blockchain network.

⚡ On each transaction, the parties update their multi-signature wallet to keep track of how many Bitcoins were sent to whom.

⚡ So, basically, the balance sheet is the one that is always updated and not the blockchain network. A copy of this balance sheet is maintained by both parties.

⚡ Finally, when all the transactions are completed, the payment channel is closed. The most recent balance sheet is presented to the blockchain network for verification. And when the transaction is confirmed, the users receive their share of Bitcoins into their wallets.

The Interconnected Lightning Network

A great feature of the Lightning Network is the interconnection in the network. Let us understand this with an example. For instance, let’s say there is a payment channel between P1 and P2. And there is P3 who has a payment channel with P2. Now, if P3 wants to transact with P1, a separate channel need not be created between P3 and P1. P3 can send the coins to P2, and P2 can, in turn, send it to P1 and complete the transaction. Hence, making the Lightning Network interconnected.

The Present and Future

Presently, the proof-of-concept is being implemented on the Bitcoin Testnet. And an experimental implementation is being carried on the Bitcoin Mainnet. In fact, this technology has come into the real world in a few countries, and it ought to grow in the coming years. That’s about Lightning Network and its working. Let us know if you have any questions in the comments below. Cheers!

Categories
Crypto Guides

Use Cases Of Blockchain Technology – Part 2 (Food & Diamond Industries)

In our previous guide, we have discussed some of the real-life applications of Blockchain technology. Some of the critical use cases of this technology that we have discussed in the Part-1 article include Asset Tokenization, Supply Chain Management, Energy Market & Healthcare. In this guide, let’s talk Food Safety & Diamond Industry, where the blockchain technology is being used extensively to solve more significant problems.

In our previous guide, we have discussed some of the real-life applications of Blockchain technology. Some of the critical use cases of this technology that we have discussed in the Part-1 article include Asset Tokenization, Supply Chain Management, Energy Market & Healthcare. In this guide, let’s talk Food Safety & Diamond Industry, where the blockchain technology is being used extensively to solve more significant problems.

In our previous guide, we have discussed some of the real-life applications of Blockchain technology. Some of the critical use cases of this technology that we have discussed in the Part-1 article include Asset Tokenization, Supply Chain Management, Energy Market & Healthcare. In this guide, let’s talk Food Safety & Diamond Industry, where the blockchain technology is being used extensively to solve more significant problems.

🥗 Food Safety 

Do you know where your food is coming from? Any idea on where it is being produced or who produced it? Have you seen some of those viral videos where artificial cabbages are made out of some chemicals in China? Or many scams in third world countries where various food items such as cooking oil, eggs, milk, etc. are mixed with dangerous chemicals to extend the storage capacity of perishable items? Yes. All of these are true. Food companies commit some of the biggest sins on this planet.

Hence it is essential to know what kind of food you eat and how pure it is. The supply chain of food items is always complicated and opaque. There is no transparency regarding where the food is produced, packed, re-packed, etc. So there are high chances of fraud happening with the tracking technology we have as of today. But with blockchain tech, users can verify the history of the food items very quickly.

Various other details such as batch numbers, location of production, storage temperatures, where the item is packed, its expiry dates can easily be recorded as well. Since the entire blockchain is transparent, anyone who has access to the respective blockchain can gain access to all those details. If executed correctly, the efficiency of the food supply chain can easily be improved. IBM Food Trust is one such blockchain that deals with most of the problems we discussed above.

💎 Diamond Industry

We all know how precious the diamonds are. They are incredibly scarce, and that makes them one of the most luxurious jewelry items. But the Diamond industry is currently facing a lot of problems such as insurance fraud, smuggled diamonds, etc. Diamond companies are following different complex procedures to make sure quality control is in place. Also, insurance companies are taking various measures to make sure the fraud doesn’t happen. However, these measures and procedures consume a lot of time and money. But what if we say there is one simple solution to all these problems?

Yes, the solution is Blockchain technology. Using this tech, provenance tracking can be done for the diamonds at every stage of its production, like from where they are mined to the retail stores. Typically, a serial number is given to the diamonds, which capture close to 40 properties of it. This serial number is embedded on the diamond while cutting & polishing it. All of these parameters related to a particular diamond can be stored in a blockchain. There’s a company known as EverLedger, who does exactly this. Essentially they convert the physical asset into a digital asset by taking all of its information for provenance tracking. As of today, they are tracking over 2 million diamonds, and by these services, users are sure that they have made the right purchase.

Some of the biggest problems in the world like terrorism can be tackled if companies like EverLedger prevail in the market. Blood diamonds are one of the largest ways of funding terrorist groups around the globe. Illegal mining of diamonds can completely be eliminated with the help of blockchain technology.

These are just two of the many industries where blockchain is being used for improving the existing conditions. Some of the other major industries include Real-Estate, Intellectual Property, e-governance, etc. We hope you enjoyed reading this article. Cheers!

Categories
Crypto Daily Topic

2local – Environmentally Conscious, Blockchain-Powered Marketplace

Environmental sustainability is an issue that keeps a lot of environment-conscious people awake at night these days. With scientists ringing the alarm louder than ever before, many people are becoming more aware of the need to participate in actions that contribute to a safer, cleaner environment. And with blockchain slowly taking over industries, it was […]

Environmental sustainability is an issue that keeps a lot of environment-conscious people awake at night these days. With scientists ringing the alarm louder than ever before, many people are becoming more aware of the need to participate in actions that contribute to a safer, cleaner environment. And with blockchain slowly taking over industries, it was […]

Environmental sustainability is an issue that keeps a lot of environment-conscious people awake at night these days. With scientists ringing the alarm louder than ever before, many people are becoming more aware of the need to participate in actions that contribute to a safer, cleaner environment.

And with blockchain slowly taking over industries, it was only a matter of time before we heard of the technology being tapped to mitigate the climate crisis. Its immutable record-keeping, transparency, and accuracy are just some of the qualities that make it an excellent tool for this end.

2local is a Netherlands-based entity that’s leading the way in the environmental-sustainability endeavor – while relying on a powerful blockchain-powered system. But 2local also seems to have other high ambitions in addition to saving the environment.

Let’s dig into the organization’s background, the intriguing way it hopes to integrate blockchain to promote environmental sustainability and its cryptocurrency, the L2L token.

What is 2local?

2local is a blockchain-enabled platform running on the Stellar platform that seeks to promote environmental sustainability and growth and prosperity for all. On the platform, consumers can connect with companies that sell sustainable, locally produced, high-quality goods, and services. The platform operates on a cashback and loyalty system in which consumers, via the use of the native L2L stablecoin, can receive a cashback for purchasing goods from these companies. 

Backed by professionals from the maritime, finance, tech, business, market research, entrepreneurship, and so on, the project seems poised to benefit from a wealth of experience.

2local operates on a three-pillar model to address what it terms as a “man-made crisis” of hunger, inequality, and climate change. These are “a local lens, a cashback system, both deeply rooted in blockchain.” Its local lens encourages companies to go local while encouraging people to buy these locally made products. The cashback system compensates people for purchasing locally made products, while the platform’s blockchain provides a fast, secure, and transparent system.

2local is the first company in the blockchain space to design a smart market model that connects businesses with the end-user, with both parties being given an incentive to preserve the environment.

The L2L Token

All transactions on the platform are conducted via the platform’s native L2L token. L2L tokens can be stored in digital wallets specially designed for the platform. Set to be launched in 2021, L2L is an algorithm-based stablecoin, ensuring users can trade with it without the risk of volatility-triggered losses.

Using the L2L token gets users rewarded with a monthly cashback. Also, when you use the token, you save on high transfer fees. 

The Environment, Blockchain, and 2local

Countless studies continue to show that global temperatures have reached new highs thanks to man-made carbon emissions. Blockchain has been touted and is being explored as one of the potential solutions to this problem. Thanks to its verification potential, the technology could bring a different way of doing things when it comes to mitigating the effects of climate change.

2local is one of the organizations tapping into this potential. Thanks to a blockchain-powered system, it’s easy to track the origin of a product and verify if it’s indeed made with local materials. Locally made goods help promote sustainability by reducing transport miles.

This is because the more the transportation miles, the more harmful gases are released into the environment. The need to transport materials across territories also drives the need for more fuel consumption, which ravages the environment even more.

Conclusion

2local couldn’t be more an organization of the times (or is it the future?) than with its ambitious plans of making the world a better place – while being aided by blockchain, a revolutionary idea in itself. The truth is, blockchain and the need for environmental sustainability are both ideas that simply refuse to be ignored. For this reason, we think 2local is one to watch.

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Crypto Guides

Some Of The Top Use Cases of Blockchain In Real Life – Part 1

Introduction

Introduction

Introduction

Blockchain is a new revolutionary technology. Its features have guided technologists to look at the technology efficiently and innovatively. Before getting right into the use cases of blockchain, let’s see some of the primary technical features of this technology.

The technical features include,

  • The use of distributed ledger technology
  • Security through cryptography
  • Ability to have smart contracts logic embedded into it

With these features, there are several compelling uses cases of blockchain that we believe will reduce inefficiency and unlock more valuable areas in the existing industries. Here are some of the most compelling use cases of this technology.

💰 Asset Tokenization

Without any doubt, the most compelling use cases of blockchain are the application in financial services and asset tokenization in finance in particular. Using blockchain technology, illiquid assets can easily be converted into its tokenized form and can be efficiently fractionalized. It can even be traded and settled on-chain. In this way, it does not have to go through the lengthy process of clearing and settlement processes. TOkenization will also unlock liquidity for small business owners, entrepreneurs, and real estate owners.

Alphapoint, Polymath, Harbor, Smart Valor are working on a platform for asset tokenization.

🚚 Supply Chain Management

Supply chain management is another great use case of blockchain technology. Transparency in the supply chain is one of the biggest problems firms tend to face. But, one of the features of blockchain eliminates this issue. Blockchain allows anyone in the network to access the database and act as a single source of truth referred to as consensus. From a consumer’s point of view, blockchain can help find the genuineness of products that are claimed to be.

Vechain and Origin Trail are examples that are currently working in this domain.

⚡ Energy Market

A few large corporations control the energy market in any given geography. To decentralize the market, blockchain technology can be of great use. If electricity is traded like any other commodity, prices in the commodity market would be affected by forces like demand and supply as well, instead of being a fixed regulated price.

Power Ledger and Grid+ are examples of peer to peer energy trading.

🚑 Healthcare

In the present state of healthcare technology, patient data is held across different institutions in legacy silos in several different formats and standards, making sharing of information ill-suited for the modern world. Although the healthcare industry has improved a lot over the years, blockchain technology can make the situation better. This generation requires data to be available to the users instantly. And Blockchain can get this into play. Blockchain technology can record patient information on a distributed ledger, which allows different institutions to access data as a single source of truth. Also, with blockchain, the access to patient’s health records is more secure as it is encrypted.

Medicalchain is an example of a healthcare data exchange platform.

These are only some of the most compelling use cases for blockchain technology. In our upcoming article, we will be discussing the applications of this groundbreaking tech in different other industries. So, stay tuned!

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Crypto Guides

Architecture and Operation of Blockchain Technology

Introduction

Introduction

Introduction

We can obtain the definition of Blockchain by dissecting it into its two words: block and chain. Hence, Blockchain is a chain of blocks having some information in it. Using a blockchain is a way of time-stamping digital documents so that it’s not possible to backdate or tamper them. This secure technology can be used for the transfer of various items such as digital currency, property, contracts, etc. And the primary feature of any blockchain is its decentralized nature. There is no central authority or banks to control the transactions.

Blockchain Architecture and Operation

The architecture and functioning of blockchain go hand in hand. As already mentioned, blockchain is a chain of blocks containing some valuable information. The type of blockchain depends on the data that is present inside a block. For example, a block in a Bitcoin blockchain contains information on who is sending how many bitcoins to whom. Another essential piece in the blockchain is the hash.

Understanding Hash

In simple terms, the hash is the fingerprint of a block. It is unique to each block and is mainly used for the identification of a block. If the content in the block changes, the hash of block changes as well. So, a block has three components:

  1. Data (Sender, Receiver & Amount)
  2. Hash
  3. Hash of the previous block

In technical terms, blockchain is designed using the principles of a linked list. Blocks containing a hash of the previous blocks is what makes blockchain so secure.

Proof of Work

Hashes are an excellent way to avoid tampering of data. But, computers today are fast enough to calculate hundreds of thousands of hashes per second. This makes it pretty convenient for a hacker to tamper a block, and recalculate all the hashes of other blocks and the blockchain valid.

To avoid the occurrence of this situation, Bitcoin blockchains use the concept of Proof-of-Work. This concept is a computational problem that takes efforts to solve. In the case of Bitcoin, it typically takes 10 minutes to calculate the required proof-of-work and add a block to the blockchain. So, this makes it extremely time consuming and challenging for hackers to tamper a block.

Distributed P2P Network

Blockchain is known for its distributed peer to peer network. Anyone is allowed to enter the network. When someone enters the network, he will get a full copy of the network.

When a new block is created, it is broadcasted to all the nodes in the network. Each node verifies this block and makes sure it hasn’t tampered. After verification, each node adds this block to its blockchain. Later, all the nodes create a consensus. They agree about the legitimacy of the blocks and accept or reject it. If the block is verified successfully by consensus, it is added to the main blockchain. This is when the block gets its first confirmation. And when around four confirmations are received, the transaction is said to be completed successfully.

Summary

  1. There are four steps involved in the working of a blockchain.
  2. Some person makes a cryptocurrency transaction.
  3. The transaction is broadcasted to a distributed P2P network.
  4. The nodes in the network validate the transaction with the help of some algorithms.
  5. Once the transaction is verified, the new block is added to the existing blockchain.

This is how the blockchain technology works. Let us know if you have any questions below. Cheers.

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Crypto Guides

Understanding The Fundamentals Of Blockchain

Introduction

Introduction

Introduction

We have understood the basics of DLT in the previous guide. In this article, let’s see one of the most popular applications of DLT, which is known as the blockchain. Many say that the blockchain technology is the new internet. By allowing information to be distributed not copied and tampered, blockchain did create the backbone of a new type of internet. Initially, blockchain found its application only in digital currencies, but today’s tech has now found other potential uses for the technology.

Blockchain, a distributed ledger, is a time-stamped series of immutable records of data that is controlled by different nodes in the network and not owned by any single entity. The records are stored in blocks that are secured and bound to each other by cryptographic principles.

The blockchain technology is completely decentralized. There is no central regulatory body on the blockchain network. The ledger on the blockchain is shared and immutable. The information in it is open to anyone to access. Hence, the blockchain is transparent in nature, and everyone involved in the network is accountable for their actions.

How does the Blockchain function?

In a blockchain, information is passed from one source to another in a fully automated and secure manner. When a party makes a transaction via blockchain, the peers in the network create a block for this transaction, which is secured using cryptography. This block is verified by several nodes (computers) distributed across the network. Once the block is successfully verified, it is added to the chain. Each block in the chain has a unique record with a unique history. Falsifying a single record means to falsify millions of instances in the chain. This is virtually impossible.

Features that hold Blockchain Strong

There are three properties of blockchain technology, which have helped it gain widespread applause.

  • Decentralization
  • Transparency
  • Immutability

📌 Decentralization

Before the appearance of Bitcoin, the public was used to only the centralized systems. And the idea of centralized systems was simple. There is a centralized entity that stores user’s information. To get this information, the user must interact solely with this entity. The main drawback of centralized systems is the absence of transparency.

Imagine if the centralized system was taken out. Everyone in the network can now view the data. It simply eliminates the existence of a third party. The data now can be shared one to one without any intermediary. This will eradicate the costs to be paid to the intermediaries as well. And this system is referred to as a decentralized network, making it a great property of the blockchain.

📌 Transparency

Transparency is another property that makes blockchain much appealing. Some say that blockchain is transparent, while some say it is private. Though it may sound counter-productive, blockchain is both transparent and private. When a transaction is made between two parties, one cannot see ‘who’ has sent it to ‘whom.’ Instead, we will be able to see something called the hash of a transaction. And this will be visible to everyone. Hence, this brings both transparency and privacy in the blockchain.

📌 Immutability

The blocks in the blockchain are immutable. It is impossible to tamper with. Technically speaking, blockchain is a linked list whose structure contains data and a hash pointer to the next block, hence creating a chain. This chain makes blockchain immutable.

For instance, let’s say a hacker hacks block 3 in the chain and tries to change the data. But, a slight change in the block will affect the other blocks drastically. That is, a change in block 3 will change the hash stored in block 2. This continues up to block 1. This will change the entire blockchain, which is impossible. Hence, making blockchain immutable.

Above are just the primary properties of the blockchain. There are other beneficial properties too, which is the reason blockchain has still sustained and is developing at a rapid pace.

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Crypto Daily Topic

Will dot Crypto Domains Phase Out The Cryptocurrency Wallets?

Sending and receiving cryptocurrencies has always been complicated. You always have to deal with the rather complex crypto addresses. But all this is about to change with the introduction of .crypto domains by Unstoppable Domains to the crypto world. According to the software company, the .crypto domains will gradually phase out the need for complicated wallet addresses.

Sending and receiving cryptocurrencies has always been complicated. You always have to deal with the rather complex crypto addresses. But all this is about to change with the introduction of .crypto domains by Unstoppable Domains to the crypto world. According to the software company, the .crypto domains will gradually phase out the need for complicated wallet addresses.

Sending and receiving cryptocurrencies has always been complicated. You always have to deal with the rather complex crypto addresses. But all this is about to change with the introduction of .crypto domains by Unstoppable Domains to the crypto world. According to the software company, the .crypto domains will gradually phase out the need for complicated wallet addresses.

Instead of sending Ethereum to such wallet address as 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy, you will now be able to send it to the easy to remember ‘ABC.crypto.’ But there is more to the domain registry than just simplifying the art of sending and receiving cryptocurrencies. And we highlight them all here while looking at the revolutionary impact these .crypto domains have on the way we transfer crypto.

What is a .crypto domain?

.crypto is ideally a blockchain-powered domain registry. It was created on the Ethereum Blockchain and was initially supposed to help simplify the art of sending and receiving cryptocurrencies. It was developed and introduced to the crypto community by Unstoppable Domains software company to complement and eventually replace the complicated wallet addresses.

With a .crypto domain, you no longer need to deal with complex wallet addresses when sending or receiving crypto coins, all you need to know is the receiver’s domain name. You then proceed to pay the domain, just as you would pay the crypto wallet address.

While explaining the simplicity of.crypto domains, Mathew Gould – co-founder and CEO of Unstoppable Domains had this to say,

“We believe that tribalism in the crypto community is slowing down adoption of the technology. .Crypto is a domain name system meant to be used for any cryptocurrency payment and with any cryptocurrency wallet. Sending money to a .crypto domain is a way simpler user experience for the millions of cryptocurrency users that currently have to copy/paste and type in long addresses in order to transact.”

What challenges does the .crypto domain seek to solve?

Crypto tribalism:

Crypto tribalism refers to the existing identity differences between different cryptocurrencies. This is, to a large extent, based on the perceived technological superiority of particular cryptocurrencies and their underlying blockchains. It is evidenced in the fact that different wallets will only host-specific cryptocurrencies making it virtually impossible for a single crypto wallet to support all cryptos in existence today. .crypto domain, however, seeks to eliminate this tribalism by creating a one-fits-all wallet that is supportive of virtually every coin.

Complex wallet addresses:

Crypto wallet addresses are complicated and hard –if not impossible – to memorize. This means that you are always copy-pasting or referencing from different sources every time you wish to send or receive cryptos. With a .crypto domain name, you only need your easy-to-remember domain name.

Need for escrow:

One of the primary advantages of the .crypto domain in cryptocurrency exchange is its speedy cash transfer and the integrity of the system. This implies that crypto transfer can be initiated by virtually anyone from any part of the world and have them in your name within a minute. The fact that these domains are created on a blockchain platform means that they are highly secure and thus no need for an escrow agent to guarantee the secure exchange of funds over the domain.

Other things you need to know about .crypto domain

As mentioned earlier, there is more to .crypto domain than just the facilitation of secure cryptocurrency payments:

No renewal fee:

The .crypto domain differs from the traditional domain in several ways. Unlike traditional domain registries, .crypto is built on the highly secure and immutable blockchain infrastructure. More importantly, it isn’t a subscription but a purchase where you get to pay once and own the domain for life.

No website censorship:

Traditional websites are subject to censorships from governmental agencies and other higher authorities. On the .crypto domain where you get to own the domain, neither the governmental agencies or any other institutions have control over the content you write or is affiliated with your domain.

Independent registry:

For the longest time, domain registries and the entire domain registration process has been regulated and controlled by ICANN. The blockchain-powered domain registry, however, presents crypto enthusiasts with an independent registry outside ICANN’s grip. The domain regulatory body does not get to approve names on this registry or regulate the issuance of domain names.

No third-party custodians:

Simply put, there are no custodians of the .crypto domains. By buying the domain name, you assume full control over the blockchain domain. You get to store your domain, and no one can get access to either move or seize them without your authorization. And this comes off as one of the many problems that the .crypto domain seeks to address.

Who owns .crypto domains?

The .crypto domain registry was started by San Francisco based software company – Unstoppable Domains. It was launched by the brand in partnership with Draper Associates and Boost VC, who have been backing the company. The registry is built on the Ethereum blockchain. It started as part of the Ziliqa foundation that established the Ziliqa domains (.zil domains) whose evolution would see the birth of .crypto domains.

The Ziliqa Foundation is constituted by the website hosting blockchain that exploited several decentralized storage networks as well as the Interplanetary File System in storing the web content. It also included a payment system. In .crypto domains, Mathew Gould and his company are merging both the website web content and crypto payment processing capabilities into one.

Where to buy them:

The sale of .zil domains that kicked off in early 2019 would go on until late October in the year. By this time, Unstoppable Domains reported huge interest in these blockchain-powered domains, adding that they managed to sell over 100,000 .zil extensions during this period.

.crypto domain registration went live in November 2019, and you can now register this 8-character web extension on the Unstoppable Domains website. The good thing is every one that purchased the .zil domain extension can upgrade to a .crypto extension of the same name for free.

Possible challenges facing .crypto domains

Squatting and trolls:

Interestingly squatting and trolling challenges aren’t an exception of the conventional domain industry. Right after the launch of the .crypto domain, a hacker was able to exploit a bug within this blockchain technology that they used to gain permanent ownership of key domain names. Some of the trolled names include apple.eth, defi.eth, wallet.eth, and pay.eth. The company, however, claims that it was able to detect and fix the bug in time and negotiate for the surrender of these domain names.

User-education:

Blockchain and cryptocurrency are already complicated subjects. And while crypto exchanges may be accused of perpetuating the highest cases of crypto tribalism, they have done a commendable job in providing the crypto community with free and relatively secure online wallets.

It will take a lot of time and resources to convince this crypto community on the need to migrate from these free wallets to the paid domains. The case of domain trolls makes this even harder given the sensitive nature of the crypto traders and investors on matters security.

Bottom line

Unstoppable Domains, the San Francisco based software development company, has come up with a solution to the complexity posed by different crypto wallets. The .crypto blockchain-powered domain will not only serve as an independent website free of censorship but will also serve as a universal crypto wallet. It will not only support all the cryptocurrencies currently available, but the fact that it is built on the blockchain technology gives it an extra layer of security and integrity not common with the conventional crypto wallets.

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Crypto Guides

Distributed Ledger Technology (DLT) – The Back-end Of Decentralized Systems

Introduction

Introduction

Introduction

A distributed ledger or DLT is simply a database that exists across several locations or among various participants. But, in the case of centralized databases, it lives in a fixed location. A distributed ledger eliminates the need for a central authority or intermediary to validate or authenticate transactions. This property makes DLT a trending technology.

Technically speaking, DLT is a digital system for keeping track of transactions in which the transactions and its details are recorded in multiple places at the same time. Here, there is neither a central data storage system nor an administrating functionality. Each node in the distributed ledger processes and verifies each item and creates consensus on each item’s veracity. Also, transaction information is securely stored using cryptography that can be accessed using keys and cryptographic signatures.

Blockchain and DLT: Are they the same?

The most popular application of the distributed ledger is the Blockchain. However, blockchain and distributed ledgers are not the same. Blockchain is just a type of distributed ledger. Blockchain is basically a sequence of blocks, which is in a chain. But, distributed ledgers don’t really require a chain. Therefore, Blockchain is a bit different from the typically distributed ledger. So, note that all blockchains are distributed ledgers, but all distributed ledgers are not blockchains.

Benefits of Distributed ledger

  • The primary feature of DLT is itself a great advantage. A distributed ledger gives full control to the information and transaction to the users. This promotes absolute transparency.
  • Distributed ledgers such as Blockchain find great applications in financial transactions. They cut down operational inefficiencies, which ultimately reduces cost on transactions. Moreover, it provides greater security due to its decentralized nature.
  • DLT offers means to securely and efficiently create a tamper-proof log of activities. Be it international fund transfer or shareholders records, its security and efficiency are unmatchable.

Types of Distributed ledgers

Blockchain hit the headlines when Bitcoin, the first cryptocurrency, surged in the market. Several interesting developments were made in the past decade. However, due to systematic inefficiencies and scaling issues, developers were in search of new solutions outside the blockchain. This search led to the development of Holochain, Hashgraph, and Directed Acyclic Graph.

With the arrival of these solutions, which significantly differ from the blockchain technology, has brought discussions regarding which is the best. Below is a brief comparison of these different types of DLTs.

The use cases of DLT are tremendous. Here, we shall take into account the use cases across the industrial, financial, and consumer sectors.

  • Using Smart Contracts to streamline Industrial processes
  • Immutable ledgers enable more secure financial transactions
  • Blockchain Authentication for identity theft prevention

While the distributed ledger has great advantages, which can considerably affect the present technology, it is in a growing stage and is still being explored to bring the best out of it. However, the decentralized future has at least begun for real.

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Crypto Daily Topic

CDC Turns to Blockchain to Keep Track of Outbreaks

The United States government has been one of the first governments in the world to embrace the blockchain technology. While it was very apprehensive of it largely because of the threat of blockchain, but it has not been long before it realized its many other benefits.

The United States government has been one of the first governments in the world to embrace the blockchain technology. While it was very apprehensive of it largely because of the threat of blockchain, but it has not been long before it realized its many other benefits.

The United States government has been one of the first governments in the world to embrace the blockchain technology. While it was very apprehensive of it largely because of the threat of blockchain, but it has not been long before it realized its many other benefits.

Blockchain’s capability to build trust in public service provision through transparent and collaborative networks makes it an ideal system to use in governance and critical information distribution. The Center for Diseases Control and Prevention (CDC) has figured out how blockchain can be leveraged to track patient health data, monitor infectious diseases, and track prescription medication.

The CDC launched a pilot project late in 2018 to explore ways in which the distributed ledger technology – that is blockchain – can be used to manage patient data over a period of time efficiently, and across different settings. This is particularly important in this age when artificial intelligence presents a huge potential to detect, track, and stay on top of outbreaks and threats to public health.

The department has partnered with various leading technology companies, including IBM, to provide the artificial intelligence technology for the blockchain project and Intel to develop the backbone on which the new blockchain platform will run.

How blockchain works in health

You probably already know blockchain as the underlying technology for cryptocurrency. Blockchain is a distributed ledger technology (DLT) with great potential across almost every industry, including healthcare. Simply put, ‘blockchain’ is a ‘block’ of transactions or data linked together using cryptographic signatures called hashes to form a ‘chain.’ The blockchain is a ledger in which the blocks are verified and stored by a network of connected computers or processes known as ‘nodes.’ Every node in the blockchain network maintains an entire copy of the blockchain that is constantly synced and updated.

Various governments, organizations, and private companies are exploring how the new technology can be used to boost access and quality of healthcare as well as cut costs. Blockchains and their applications differ depending on the underlying specifics such as networking type, encryption, hashes, and intended applications.

However, in general, all blockchain platforms offer the same benefits, including transparency, secure collaboration, faster transactions, automatic and real-time reconciliation of accounts, and transactions without the need for intermediaries or third-parties.

Blockchain strategy to manage and analyze patient data

To demonstrate how committed it is to integrate the newest technologies to improve the welfare of its people, the United States government last year pledged to spend as much as 20 percent of its GDP on healthcare.  The CDC is already tapping the blockchain technology to track and stem the rising cases of opioid addiction in a project that looks to streamline the traditional long-running surveys used to track patient symptoms and treatments.

The new system has proven to be easier for the CDC to collect data through surveys from such institutions as the National Hospital Ambulatory Medical Care Survey, which collects patient health data and visit information from hospitals and doctors all over the country. Presently, the government relies on data collected and analyzed by the CDC to make many determinations from how doctors prescribe opioid painkillers and antibiotics to how frequently Americans are seeking medication for stress management.

The new blockchain-based health surveillance system set to be rolled out by the CDC will make it easier for public health agencies to survey the hospitals and physicians to acquire important information about their patients as well as their prescription practices. In addition to collecting the data, the system will also track, secure, and a log of who accesses which parts of the data and when.

The transparency that the blockchain platform brings to the operations of the CDC is unparalleled and comes at a time when data security is just as sensitive as it is open to how it is used. While the technology itself does not store the patient data, it simplifies the process of keeping track of which data was collected from whom and where it is stored. This helps safeguard sensitive patient information while allowing medical providers access and update the information on the blockchain.

The blockchain platform the CDC is testing stores its data in encrypted electronic records in IBM’s cloud servers. Only authorized individuals in specific agencies would be able to obtain the encryption keys required to access the data.

Managing breakouts and epidemics

One of the most anticipated uses of the blockchain platform in the health industry is to help health workers respond to crises faster and more effectively. The agency is testing how it can use blockchain to study and monitor trails of any reported outbreaks of diseases to help its scientists find their origins and patterns. 

The new platform is very convenient, largely because of the timestamping feature. Coupled with the benefits offered by distributed data processing tools on the cloud, the CDC is certain that proper implementation of blockchain will better help in suppressing the spread of diseases.

When a person contracts an infectious disease such as hepatitis A, the CDC needs to be among the first to know about it in order to take action and contain it. Institutions under the Health Department within the neighborhood in which the diagnosed patient comes from must also be notified. This is important since the patient may have contracted the virus that causes the disease from contaminated food or water in that area, and drastic measures must be taken to prevent further contamination.

The CDC will make use of the blockchain platform to routinely share public data with local and national health organizations besides institutions under the health department. This communication revolution in the health industry has enabled easier and more efficient ways to coordinate the mitigation of the spread of infectious diseases. The institution has already developed special applications that are specially designed for improved public health surveillance and public health data management. The CDC believes that moving such crucial data from one peer to another – faster, securely, and in a compliant manner – is the key to its success in dealing with outbreaks and epidemics.

IBM is not the only company that strongly believes that the blockchain technology has proven invaluable in suppressing epidemics and generally making work easier for the CDC. Intel, too, is partnering with private giants in the pharma industry, including Johnson & Johnson and McKesson, to develop blockchain platforms that would help the CDC. One particular way is helping them better trace how prescription pills are distributed from the manufacturer to the patients.

With such a formidable tool, the CDC will better understand, from a supply chain management perspective, which physicians prescribe which medications and whether they are culpable of malpractices.

Other future blockchain applications in health

There is presently a serious problem in the way health institutions keep public health records. The storage and data distribution system is incoherent and not fully utilized. The confusion arises because the CDC expects the institutions that collect them to file the same data with different institutions, often using different documents.

With the blockchain technology, the CDC will be able to eliminate delays and inaccuracies in data collected from different sources while ensuring that sensitive data is protected from unauthorized individuals.

Another way in which the CDC is exploring the use of blockchain is in consent management. In the current healthcare environment, every state has its own patient and privacy consent regulations. A blockchain-based system would be used to record data sharing consent to ensure that no patient’s privacy is breached on purpose or unintentionally.

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Blockchain and DLT

Distributed Ledgers – The Technology That Could Revolutionize Industries 

If you’re regularly tuned to cryptocurrency subject, no doubt you’ve heard the term ‘distributed ledger’ or DLT, thrown around once or twice. You’ve probably also heard some people use the phrase to refer to blockchain – the technology underlying everyone’s most familiar cryptocurrency. But does a distributed ledger and blockchain mean the same? And what is this distributed ledger thingy anyway?

If you’re regularly tuned to cryptocurrency subject, no doubt you’ve heard the term ‘distributed ledger’ or DLT, thrown around once or twice. You’ve probably also heard some people use the phrase to refer to blockchain – the technology underlying everyone’s most familiar cryptocurrency. But does a distributed ledger and blockchain mean the same? And what is this distributed ledger thingy anyway?

If you’re regularly tuned to cryptocurrency subject, no doubt you’ve heard the term ‘distributed ledger’ or DLT, thrown around once or twice. You’ve probably also heard some people use the phrase to refer to blockchain – the technology underlying everyone’s most familiar cryptocurrency. But does a distributed ledger and blockchain mean the same? And what is this distributed ledger thingy anyway?

In this guide, we dive full form into the world of DLTS: some of their popular examples, how they can be integrated into real life, and that burning question – whether they are the same thing with blockchain. But first, a little background is in order. 

What Are “Distributed Ledgers”? 

A distributed ledger is simply a database that is shared and replicated across multiple locations or institutions and among multiple participants. No central authority or third party is involved. Every entry in a distributed ledger is immutable – that is, it cannot be changed, and every participant in the network has an identical copy of it. 

We can think of a distributed ledger in terms of its opposite – a centralized ledger. A centralized ledger has one point of control and has a single point of failure. On the contrary, it’s hard to attack a distributed ledger because all the distributed copies would have to be attacked simultaneously for the attack to be successful. 

Ledgers have existed for centuries. People in the early days would record transactions on clay or papyrus. Over time, these were replaced by paper, and then computers, and now we’re entering into the realm of distributed ledger technology. 

In the past, the word ledger referred to financial records. Distributed ledgers are used to refer to the database, without any specific inference for the contents. Nowadays, the uses cases of distributed ledgers are numerous and varied. 

How Do Distributed Ledgers Work?

Distributed ledgers function via nodes – which, in simple terms, are connection points within the network that can receive, store, share, or synchronize data. The connection points allow users within the network to be linked to each other – facilitating peer-to-peer, decentralized transactions between individuals on the network. 

All updates to the ledger are first agreed upon by the nodes via a voting process known as consensus. Once consensus has been reached, the distributed ledger automatically updates this, and the latest version of the ledger is saved on every single node. 

Blockchain vs. DLT

A lot of people use the terms ‘blockchain’ and ‘distributed ledger’ as if they meant one and the same thing. However, it helps to remember something simple: all blockchains are distributed ledgers, but not all distributed ledgers are blockchains. Any database that’s shared across multiple sites and participants, decentralized, and that needs consensus among nodes can be described as a distributed ledger.

A blockchain is simply a subset of DLTs. It’s a series of blocks of data chunks known as ‘blocks,’ which are encrypted after every transaction. ‘’Miners’ validate transactions and ensure they are accurate – that is, ensuring a coin is not being double-spent. Miners then get rewarded with coins of the native cryptocurrency or a fraction of the transaction fees.

On the other hand, DLTs do not feature or require such a chain, nor are there miners to validate transactions. DLTs also do not need to have a data structure in the form of blocks.

Suffice it to say, many DLTS today were designed to circumvent the shortcomings of blockchain – issues like scalability, processing time, massive computational power, transaction fees, and so on.

Types of Distributed Ledger Technologies

There are a few types of distributed ledger technologies today, with some being more popular than others. We’ll look at four of these – specifically blockchain, Directed Acyclic Graph (DAG), Holochain and Hashgraph.

Each of these DLTs has their strong and weak points, but they all aspire to offer the same solution – a decentralized, transparent, fast, and safe avenue for relaying transactions and/or data. Let’s take a look at each, starting with the most familiar one – blockchain.

1. Blockchain

Satoshi Nakamoto, the creator of Bitcoin, noted that a network would collect and record information in blocks – which would be linked to each other, hence blockchain. Each block in the blockchain is identified by a unique hash generated by the SHA256 cryptographic hash algorithm. Due to the uniqueness of each block, it’s impossible to alter a transaction since that would result in the creation of a new block – indicating an invalid transaction.

In addition, transactions are added on a public ledger and are accessible to every participant in the network. This distributed and transparent nature of the ledger makes it even more difficult for any actor to modify the details of a transaction.

These qualities of immutability (unchangeable, and hence tamper-proof) and transparency are the major factors that make the blockchain so revolutionary. Its ability to inject integrity and transparency in processes and data storage is the chief reason blockchain is disrupting entire industries.

2. Hashgraph

Hedera hashgraph is a type of distributed ledger that works like blockchain but uses a different kind of consensus mechanism that relies on the concept of gossip, gossip about gossip, and virtual voting. Gossip here means that information is relayed by each participant repeatedly to another randomly selected member – informing him everything about the transaction.

This “gossip protocol” utilizes this mechanism for building network consensus as more and more people become aware of the information, whether in full or partially. In hashgraph, transactions are arrived at fully by consensus. As such, unlike blockchain, nodes or members do not have to validate transactions that are conducted on the network, and service requesters do not have to submit “proof of work.”

With the blockchain, proof of work causes transactions to be bulky, leading to very low transactions per second (transactions take place every 10 minutes.) By contrast, the gossip protocol enables hashgraph to support up to 10.000 transactions per second.

Hashgraph’s creators claim that it has overall efficiency than blockchain, “making it suitable for enterprises and commerce.” The CEO maintains that “…it’s a different data structure, different technology and looks nothing like blockchain, but solves the same kind of problems with better security and better performance.”

3. Directed Acyclic Graphs

Directed acyclic graphs are a type of distributed ledger that requires newly added data to be validated previously entered data. Usually, every new transaction involves the confirmation of at least two previous transactions before it is added onto the network. As more transactions are submitted, more are validated and recorded, and we end up with a mesh of doubly-confirmed transactions.

Directed acyclic graphs are by no means a new concept. In Mathematics, a DAG is a graph that has no cycles connecting to the other edges. As such, it’s impossible to navigate through the entire graph by starting from one point.

In a DAG ledger, all transactions are linked to at least one transaction in the following way: 

  • Directed – all links are in the same order and point in the same direction, with previous transactions linked to subsequent ones
  • Acyclic – A ‘cycle’ or loop is not possible. A transaction cannot circle back on itself after being linked to another transaction
  • Graph – the connected transactions can be represented on a graph, with nodes being linked to each other by links.

DAGs do not require miners to validate the authenticity of transactions since each transaction is automatically verified by at least two earlier transactions. The result of this process is that transactions are confirmed almost instantaneously, and it also removes the need for miner’s fees, helping to keep transaction fees at a minimum. 

DAG is commonly applied to processes dealing with data processing, scheduling, navigation, and data compression. ByteBall, Nano, and Fantom are some of the cryptocurrency projects utilizing the technology. 

4. Holochain

Holochain, according to the project’s white paper, is an amalgamation of blockchain, BitTorrent, and Github. With the DLT, each node runs on a chain of its own. It has a feature known as distributed hash table (DHT) where users can store data using certain keys. However, the data stays in actual locations “distributed” globally.

The distribution of locations around the globe decongests the network – rendering it a good candidate for scalability and poising it to achieve even millions of transactions per second.

Scalability is an issue that’s been dogging the traditional blockchain – since developers need validation from a majority of the network participants. On the other hand, a developer only needs confirmation from the single chain that makes up the whole Holochain network, dramatically reducing the wait time that is associated with the traditional blockchain.

Use Cases of Distributed Ledgers

Distributed ledgers can be applied across many industries – both as the driver of processes or to improve existing processes.

Blockchain, thanks to the world’s most popular cryptocurrency – Bitcoin, is the mostly applied DLT today. The most obvious application of blockchain is Bitcoin. The technology is also being applied in finance to reduce duplication of information that creates delays and confusion in many aspects of financial services.

The blockchain is also helping to reduce intermediaries in international remittances who not only prolong waiting times but are also expensive. Furthermore, blockchain allows securities trades to be settled within minutes – instead of the traditional several days.

DLT networks are also being used in supply chains to increase transparency and enhance accountability by tracking and logging details, flow, and payment of goods in real-time.

They can also be used to prevent fraud in financial transactions by providing immutable – and hence unchangeable audit trails and demanding more transparency and a higher standard of data integrity than the existing system.

DLTs could also be used in the food industry to prevent food fraud. Food can be tracked ‘from farm to plate’ so that customers can see the origin and handling of food.

Smart contracts – which are pieces of code on a DLT are another case of use of DLTs. Smart contracts define the terms of the agreement between parties – with the agreement unalterable and available for every party to see and refer to. They can be used in such cases as invoicing, shipping, procurement systems, quality assurance, compliance, and so on.

Benefits of DLTs

  • The immutability, i.e., permanent nature of DLTs records, leads to improved transparency, improved speed of processes, reduced costs, and so on. Also, it removes the need for paper trails that are not only labor-intensive but are vulnerable to damage, theft, or loss.
  • DLTs consensus mechanisms allow processes to be more consistent – facilitating reduced errors, real-time data, and flexibility for network participants to take part in decision making
  • Decentralization of DLTs removes the need for a central authority which means increased trust and integrity and multiple sources of authentication
  • Their distributed nature removes the single point of failure since the data is backed up by every node in the network – multiple participants
  • DLTS are less complex to build and operate, and they need very minimal work to maintain – which makes them less costly than many current systems
  • Distributed ledgers can manage real-time data across varying scenarios, places and contexts, eliminating the clutter that is associated with managing multiple centralized ledgers

The Future of DLTs

DLTs are still a nascent technology. However, they present a fundamentally new way to run processes, conduct business, and carry out transactions. For now, it remains to be seen if they will gain mainstream traction and change how businesses, institutions, and industries operate. 

As of now, academic and financial experts question whether DLTs – in their current form, are reliable enough to be adopted for full-scale use. Still, influential finance institutions such as the World Bank recognize their potential to transform various sectors such as manufacturing, government financial management systems, and clean energy.” 

What’s clear, though – their incorporation into systems will likely be done incrementally – by first replacing redundant and manual procedures and activities. They could come handy in areas such as record-keeping in payment and settlement processes, tracking agricultural systems, syndicated loans, and so on.

Conclusion

DLTs hold vast potential for changing the way we organize our lives and societies – thanks to their radically transparent, unalterable, and democratic nature. From food to finance to supply to negotiations – incorporating DLTs could transform our very lives and societies. This, however, is entirely contingent on whether they will transcend the current scalability issues, or whether they will gain widespread acceptance across industries.

Categories
Crypto Daily Topic

Luxury Car Lamborghini Embraces Blockchain

Ten years after blockchain came to life, we’re seeing new adoptions of the technology on a larger scale than ever before. These days, barely a week passes without hearing another blockchain application in news headlines. The latest to enter the fray has been none other than sports car favorite Lamborghini – which is now using Salesforce blockchain to authenticate cars.

Ten years after blockchain came to life, we’re seeing new adoptions of the technology on a larger scale than ever before. These days, barely a week passes without hearing another blockchain application in news headlines. The latest to enter the fray has been none other than sports car favorite Lamborghini – which is now using Salesforce blockchain to authenticate cars.

Ten years after blockchain came to life, we’re seeing new adoptions of the technology on a larger scale than ever before. These days, barely a week passes without hearing another blockchain application in news headlines. The latest to enter the fray has been none other than sports car favorite Lamborghini – which is now using Salesforce blockchain to authenticate cars.

One of the most recognized luxury car brands, Lamborghini, has been leading from the front in innovation in the automobile industry since 1963. And the brand is now tapping into blockchain’s potential to streamline its processes, enhance customer experience, and maintain the value of its legacy autos.

“Innovation has been at the core of our company since its founding,” said Paolo Gabrielli, Head of After Sales at Automobili Lamborghini, adding “Salesforce Blockchain will allow us to take our innovation a step further, accelerating the authenticity of our heritage vehicles faster than ever.”

And Adam Caplan, senior vice president of emerging technology at Salesforce, said: “Blockchain is changing the way companies approach trust and transparency. Lamborghini is a perfect example of this – we’re excited to see how such an iconic brand is able to innovate and transform the vintage car market with cutting-edge technology like Salesforce Blockchain.”

A Brief Background

Lamborghini’s application of blockchain follows a recent pilot project involving its first car to be certified using the technology. In August, Lamborghini Aventador S was certified on Salesforce Blockchain for a show at the Monterey Car Week in California – to protect the authenticity and art of the car. Salesforce announced that the process was one of “authenticity certification, which makes use of Salesforce Blockchain to guarantee data security and incorruptibility.”

The goal, the company announced, was to “prevent counterfeiting; to trace and certify all the information related to the model, and at the same time favor an increase of value for all the stakeholders.”

What is Salesforce Blockchain?

Salesforce is an American digital marketing automation and analytics company. In May this year, the company announced a Blockchain-powered solution that “extends the power of client relations management.” The answer would help users build and maintain the blockchain network, apps, and smart contracts.

The Salesforce Blockchain is built on the Hyperledger Sawtooth Platform – an open-source blockchain platform that allows companies to develop distributed ledger applications and networks.

Salesforce and Blockchain: a History

Salesforce and blockchain go back a year ago – when the company announced its blockchain plans at TrailheadDX. Marc Benioff, the company’s CEO, told Business Insider that he had been thinking about the idea after an attendee at the World Economic Forum approached him and suggested Salesforce should incorporate blockchain in its services. Benioff said he was intrigued by the idea, stating, “And it’s like you know if you did this, this and this you could add blockchain and cryptocurrencies into Salesforce…and I’m like ‘wow,’ and that’s kind of how it works.”

The company had had a dalliance with blockchain before, partnering with the blockchain startup Dapps Inc, which in May 2017 had announced the release of a product allowing users to integrate the Salesforce system with the Hyperledger, Ethereum, and Bitcoin blockchains.

This year, the company joined the Blockchain Research Institute, the global blockchain think tank, which boasts members like Microsoft, IBM, the Bank of Canada, PepsiCo, and other influential companies. In November, Salesforce secured a patent for a blockchain system that would enable it to filter spam and verify the authenticity of emails after they were sent. The patent spoke to the immutability (unchangeable nature) and distributed nature of blockchain that makes it impossible to modify information once it’s been committed to the blockchain.

On May 23, the company published a brief primer of the technology on its blog – recounting the basic principles of blockchain-like its ability to facilitate faster money transfers, improve medical storage procedures and increase transparency in supply chain management. It also explained how blockchain could help Salesforce in its customer relationship management field.

“Blockchain is a technology that promises to fundamentally change how we share information, buy and sell things and verify the authenticity of the information we rely on every single day – from what we eat to who we say we are. And because it can facilitate all of this in a secure, efficient, and transparent ways across many different domains, the effects can be transformative –every business, government, and individual can benefit.”

How Lamborghini Uses Salesforce Blockchain

As a high-end luxury car brand, Italian car manufacturer Automobili Lamborghini has been at the forefront of innovation all its existence. The brand is known for its agility in adopting innovative technologies to transform operations.

Its latest move to leverage blockchain has shown the auto industry that utilizing novel technologies can streamline processes, increase value for customers, and uphold brand value.

In the official press release on November 19, Salesforce gave some insights into how the car brand is using blockchain to improve processes. Divulging that each Lamborghini vehicle undergoes at least 800 certification checks before being released, they stated that the inspections require a massive network of people – “photographers, auction houses, dealerships, repair shops, newspapers, magazines, and other media sources – to curate the full history and most importantly verify all of the parts and service of each unique vehicle.”

The Blockchain Approach

In light of how grueling the process is, Salesforce is stepping in to create trust between all the partners involved and to enable Lamborghini to authenticate each vehicle faster and more securely than ever before.

Blockchain is designed to increase trust, transparency, and accountability with every player involved receiving secure, verified, and tamper-proof information. Any change to the chain is immediately recorded on the blockchain and is visible to everyone.

But getting every party involved on board has always been challenging– as it requires heavy-duty data integration at each stage. To resolve this, Salesforce uses clicks – rather than code, to achieve a faster set-up process. This saves the time that would have been used building up lines and lines of code as well as helps to integrate partners who are aren’t Using Salesforce applications.

Lamborghini has named its blockchain system “sicura” – which means safety in Italian. Sicura is the layer that links all the parties involved – dealers, logistics companies, auction houses, media houses, dealerships, photographers, and the car manufacturer itself – so that data can be gathered and shared faster and in a trustworthy manner. Before, the verification process for a car was three to six months, but thanks to Sicura, the process now takes place in a matter of days.

Customers can also download an app that allows them to request a certification or hire a car. And partners can access real-time info, enabling everyone to track progress every step of the way. Once authentication is complete, data is stored on the blockchain where all current and future owners of a vehicle can access it.

Conclusion

Lamborghini is only one in a growing field of companies that are adopting blockchain to make processes quicker, more transparent, and make information permanent and hence tamper-proof. By utilizing the technology, plenty more companies could cut on costs, increase accountability, and enhance the customer experience. One thing is clear, though – the technology is here to stay, and we can expect to see it being adopted on a larger scale in the coming years. 

Categories
Cryptocurrencies

How Exactly Does Blockchain Work?

Anyone who’s heard of cryptocurrency has most probably heard of blockchain. If you ask most people, they’ll tell you blockchain is cool. But they probably won’t tell you much beyond that. That’s because not everyone understands how blockchain works.

Anyone who’s heard of cryptocurrency has most probably heard of blockchain. If you ask most people, they’ll tell you blockchain is cool. But they probably won’t tell you much beyond that. That’s because not everyone understands how blockchain works.

Anyone who’s heard of cryptocurrency has most probably heard of blockchain. If you ask most people, they’ll tell you blockchain is cool. But they probably won’t tell you much beyond that. That’s because not everyone understands how blockchain works.

Not that it’s a hopelessly complicated concept. On the contrary. It’s just a groundbreaking technology with many firsts that might take some getting used to. In this article, we break down what’s blockchain, its history, how it works, and the properties that make it so revolutionary.

What is Blockchain?

The concept of blockchain is credited to computer scientist Stuart Haber and physicist W.Scott Stornetta. In a 1991 white paper, the two wrote a white paper that proposed the idea of time stamping and using private key signatures (based on cryptography) on submitted data.

This idea inspired the work of many other computer scientists and cryptography enthusiasts – leading to the creation of the first blockchain application – Bitcoin.  

‘Blockchain’ can be defined in several ways. Some people may understand it as a literal chain of blocks – though not in the real sense of those words. Others would understand it as a decentralized digital diary or ledger. (Decentralized means everyone can have access, and no single authority makes the rules.)

Both are correct. In this context, ‘block’ is essentially transaction data stored on a ‘chain,’ which is the public database. Every block in the blockchain contains several digital pieces of information, which we’ll detail below:

☑️ Information about transactions including date, time, and the amount of cryptocurrency in the transaction

☑️ Information about the participants of transactions, i.e., a digital signature (not their real name)

☑️ Distinct information that distinguishes it from other blocks, known as a ‘hash.’ (a hash is a string of letters and numbers generated by a ‘hash function.’ A hash function is a mathematical function that converts random letters and letters into an encrypted text of fixed length.)

A single block on the blockchain can only store up to 1MB of data. Depending on the size of transactions, a block can hold a few thousand transactions.

How Blockchain Works

When a block is validated (that is, the transactions in a block are verified), it is recorded on the blockchain. But for a block to be added on the blockchain, four things must happen: 

A transaction must take place.  

That transaction must be verified. After you pay for goods in a store with crypto or you send cryptocurrency to your loved one, that transaction must be confirmed as accurate and legitimate. Unlike with other public records of information like Wikipedia or your local library where there’s someone in charge of verifying new data entries, the blockchain relies on a network of computers for that task.

Verifying means checking if the transaction is as you said it was, in regards to the details of the purchase, time, amount, and participants. 

The transaction must be stored in a block. After a transaction has been confirmed as legitimate, it gets the approval to join a block where there are many others like it.

The block is given a unique identifier called a hash. Once all transactions of a block have been verified, it’s given a distinctive code that will differentiate it from all other blocks on the blockchain. Then, that block is added to the blockchain. 

When a block is added to the blockchain – it becomes a public matter of record available for anyone to see. A quick look at Bitcoin’s blockchain, for instance, will show you traction data along with the info about when (“Time”), where (“Height”) who (“Miner”) added the block to the blockchain. 

The blockchain network is maintained by network participants. These participants are also called nodes and is composed of a myriad of interconnected computers spread across the globe. Every node has a copy of the blockchain, and all participants are equal in authority. 

Therefore, blockchain transactions take place within a global, peer-to-peer network. Its peer-to-peer characteristic makes it decentralized, borderless, and censorship-resistant. (Censorship resistant means anyone can interact with the blockchain on the same terms as anyone else, and no one person can singly modify the content on the blockchain.)

A central part of many blockchains – including Bitcoin, is mining, which relies on computers to run a series of hashing algorithms to “mine” or process the most recent block. Each blockchain uses a different type of hashing algorithm. For example, Bitcoin uses the SHA-256 algorithm. ‘SHA’ stands for Secure Hash Algorithm. The SHA-256 takes an input of alphanumeric characters of any length and converts it to an output of 64 characters (256 bits). 

Once a block is mined, the miner broadcasts it to all miners (nodes) in the network. They then confirm its validity before adding to it to their copy of the blockchain. They will also include the hash from the previous block onto the new block – hence the name blockchain. 

The model of producing new blocks by running a series of hashing algorithms is called Proof of Work (PoW). PoW is the model used by Bitcoin, the first application of blockchain and the world’s first cryptocurrency. PoW, however, uses extremely high computing power and hence, electricity – leading to the development of other models meant to improve on it – for example, Proof of Stake (PoS). 

The Principles of Blockchain

Blockchain has three main inherent characteristics that have made it such a revolutionary technology. These characteristics are as follows:

  • Decentralization
  • Transparency
  • Immutability 

Decentralization 

On a blockchain, each participant in the network has access to the whole blockchain. No one participant has control over or regulates its information. Also, every participant can validate the records on the chain.

You can also transact directly with other users on the blockchain – send money, receive money, etc. without an intermediary.

In the same way, the blockchain is also architecturally decentralized such that there’s no one single or even several points of failure. For an attacker to gain control of the blockchain, they would have to gain control of more than half (at least 51%) of the network – which is almost impossible.

Transparency

Blockchain technology came with an unprecedented level of transparency. If speaking from a cryptocurrency viewpoint, for example, all transactions are recorded on the blockchain and identified by the owner’s public address. In cryptocurrency, this is what is referred to as pseudonymity, i.e., while their public address is open information, their real identity is not disclosed.

In real-world blockchain applications, for instance, the supply chain, every single step of the process is available for all to see. This introduces transparency never before seen in the world.

Immutability

In the context of blockchain, immutability means that once something has been recorded on the blockchain, it cannot be changed or altered.

Blockchain achieves this via a cryptographic hash function – which is taking an alphanumeric input of any length and giving it an output of a fixed length.

The immutability of blockchains means it can be applied to many situations to encourage accountability when people know that they can’t manipulate information or accounts.   

Conclusion

The technology behind cryptocurrencies is interesting and revolutionary. It’s decentralized, transparent, and immutable nature is what makes it so unique. It’s what has made Bitcoin a household name and pushed cryptocurrencies to the fore. The next time you’re talking about blockchain, hopefully, you’ll be doing so with much more confidence.

Categories
Crypto Daily Topic Cryptocurrencies

Hyperledger Fabric – A blockchain based enterprise solution

Blockchain is the future. Yes, the technology powering cryptocurrencies has incredible potential to change how institutions and industries work – and our very lives. When you’re talking about radical transparency

Blockchain is the future. Yes, the technology powering cryptocurrencies has incredible potential to change how institutions and industries work – and our very lives. When you’re talking about radical transparency

Blockchain is the future. Yes, the technology powering cryptocurrencies has incredible potential to change how institutions and industries work – and our very lives. When you’re talking about radical transparency in supply chains, no more annoying red tapes, and contracts without a horde of lawyers – you’re talking about blockchain technology.

These are just examples of what blockchain is capable of. It’s a revolutionary technology that could be used for good. And no entity or organization recognizes this more than Hyperledger – a global coalition of forward-thinking organizations whose aim is to advance blockchain.

It’s one of the most exciting organizations in the blockchain sphere – and whose work is incredibly important. But what is Hyperledger? Let’s dissect everything about it – from members to its architecture to its exciting projects, to companies that are already utilizing its platform. 

What is Hyperledger?

Hyperledger is an umbrella network of institutions that seeks to support the collaborative development and improvement of distributed ledger systems so that they can support global business transactions.  The project was founded by the Linux Foundation in 2015, with the founding members announced in February 2016. Hyperledger calls its design ‘’The Greenhouse for Enterprise Blockchains” – as it aims to incubate and develop practical blockchain-based solutions and applications to today’s challenges

The project is backed by a global alliance that includes over 200 leading organizations from the blockchain technology, finance, technology, software, academia, system integration, manufacturing, Internet of Things (IoT) and more fields. They include big names such as Accenture, Airbus, American Express, Cisco, Consenys, SAP, Huawei, Samsung, Microsoft, Oracle, Ripple, YaLE, UCL, University of Cambridge, and more.

The Hyperledger Architecture

Hyperledger’s architecture utilizes the following business components:

☑️ Consensus layer – which deals with creating agreement on the priority of transactions, as well as the accuracy of transactions contained in a block

☑️ Smart contract layer- which takes care of processing transaction requests and authorizing valid transactions

☑️ Communication layer – which deals with peer-to-peer communications

☑️ Identity management service – the function that maintains and validates the identity of users and maintaining trust on blockchain

☑️ API (Application Programming Interface) – a software that facilitates external applications and users’ interaction with the blockchain.  

What Hyperledger Is Not

When talking about Hyperledger, it’s important to get it right about what it’s not. Hyperledger is not a company, a cryptocurrency, or a blockchain. Hyperledger is something of an open hub for pushing enterprise blockchain development. The platform does not endorse any cryptocurrency. Its focus is on blockchain technology and how to harness it for the good of the world.

Its website tells us: “Not since has the web itself has a technology that promised broader and more fundamental revolution than blockchain technology. Blockchain can be used to build a new generation of transactional applications that establishes trust, accountability, and transparency at their core, while streamlining business processes.”

Hyperledger wants to ensure that blockchain thrives, stating, “Only an open-source, collaborative software development approach can ensure the transparency, longevity, interoperability, and support required to bring blockchain technologies forward to mainstream adoption.”

In short, the project is about bringing minds and brains together to further the blockchain idea. It’s not about commercial incentives or a get-rich scheme. That’s why Hyperledger has no plans for developing a cryptocurrency. Executive Director Brian Behlendorf made this clear from the start, saying, “You’ll never see a Hyperledger coin. By not pushing a currency, we avoid so many of the political challenges of having to maintain a globally consistent currency.” (source: https://www.bitcoininsider.org/article/43420/wtf-hyperledger)

Hyperledger Projects

The Hyperledger ‘greenhouse’ incubates and promotes a range of industrial blockchain technologies, frameworks, tools, interfaces, and applications. As of November 2019, Hyperledger projects are as follows:

Hyperledger Aries

This is the youngest project by Hyperledger. Its goal is to advance the use-case of blockchain to provide identity solutions. It does this by providing an open-source, interoperable tool kit for creating, transmitting, and storing genuine identities. It relies on another Hyperledger project – project Ursa, for cryptographic support to achieve security and safety for identity credentials.

Hyperledger Avalon

Avalon is the project’s implementation of the Trusted Compute Specifications published by the Ethereum Enterprise Alliance. Avalon is intended to provide safe and trusted off-chain computing resources to improve the scalability of public blockchains, all without compromising on the privacy accorded by these blockchains. 

Hyperledger Besu

This is the first public blockchain project to join the Hyperledger fold. It was formerly known as Pantheon, a project by the blockchain company ConsenSys. Besu is an Ethereum client (software that executes Ethereum’s protocol) that allows users to create decentralized application (DApps), smart contracts, and mine ether. The project is keen to separate concerns between consensus algorithms and other blockchain features.

Hyperledger Burrow

Burrow is a permissioned Ethereum smart contract machine that handles transactions and executes smart contracts on the Ethereum Virtual Machine.

Hyperledger Caliper

Caliper is a framework meant to measure the performance of multiple blockchain solutions. It contains several performance indicators such as Transactions per Second, transaction latency, resource consumption (CPU, memory, etc.), and so on. The resource is meant to be used by various Hyperledger projects as they roll out frameworks.

Hyperledger Cello

This is a tool designed to be the operational dashboard for Blockchain – to minimize the effort applied while creating, managing, and using blockchains. It can be used as a reference tool by blockchain developers.

Hyperledger Explorer

This a dashboard utility module that lets users create various user-friendly applications on which others can view, monitor, search, organize, or query various artifacts and developments in blockchain. It includes details such as name, chain codes, details of blocks, transaction data, and other relevant information on the blockchain network.

Hyperledger Fabric

Hyperledger fabric is a framework that acts as a foundation for creating blockchain-based products, solutions, and applications. Its components, such as membership and consensus, can be used on a plug and play basis. It fills the privacy and confidentiality gap that makes traditional blockchains less than ideal for enterprise-level blockchain solutions.

Hyperledger Grid

This a set of tools that allows developers to select the most optimizable components for developing supply chain blockchain-based solutions.

Hyperledger Indy

This is a distributed ledger that provides tools, libraries, and components for decentralized identities to address issues of identity management. Indy can be used solely but is interoperable with other blockchains.

Hyperledger Iroha

Iroha is a distributed ledger software that infrastructural and IoT projects can easily incorporate into their systems. It features simple construction, a crash tolerant consensus algorithm, and other characteristics that make it easy to integrate into such systems.

Hyperledger Quilt

This is a Java version of the Interledger protocol that allows payments across any payment network, whether with fiat or crypto. It has an implementation of all core functions required to send or receive payments. 

Hyperledger Sawtooth

The Sawtooth project aims to keep ledgers truly distributed and make smart contracts more secure. It is designed for use across many fields, including IoT and finance. Its dominant characteristics include being both permissioned and permissionless and using the Proof of Elapsed Time (PoET) consensus algorithm.

Hyperledger Transact

Hyperledger Transact is a library that provides a standard interface for writing distributed ledger software – in order to simplify the task for developers.

Hyperledger Ursa

Ursa is a shared cryptographic library that seeks to assist developers not to duplicate cryptographic work and hopefully increase security for future developer applications.

Real-Life Applications of Hyperledger

Hyperledger is already in application across industries – from food to diamonds to healthcare. Companies are using the platform to achieve more transparency, eliminate fraud and streamline processes. Here are examples of such companies:

Everledger is a company that uses a blockchain solution based on the Hyperledger platform to inject more transparency in the diamond supply chain – and thus help prevent fraud and illicit trading. The diamond community shares concerns over stone’s origins and authenticity – and this is where Everledger comes in. It traces the journey of every stone from mining to the consumer so that customers are assured of the integrity of their diamonds.

DigiPharm is a company that aims to promote fair pricing in the healthcare sector. It has built its platform on the Hyperledger Fabric protocol to enable seamless implementation of fair pricing agreements, lower costs, and help remove long-standing barriers that prevent patients from accessing quality healthcare. 

HealthVerity is a platform that creates, aggregates, and exchanges healthcare and consumer data.  It has integrated the Hyperledger Fabric protocol to better manage consumer and patient preferences in a way that best complies with changing privacy requirements.

E-Food is a food traceability program based on the Hyperledger platform that traces all quality and logistics activities on the supply chain. It enables a ‘food to farm’ approach to making food supply and production more transparent – enhancing customer trust and preventing food fraud. 

Conclusion 

Hyperledger has taken a rare and noble path – one for advancing the blockchain idea without monetary incentives. Its projects already demonstrate the ability to transform industries by making it easier to adopt and utilize the technology for the benefit of both businesses and the most important player in it all – the customer. We can only hope that more companies across the board will take up the Hyperledger idea and deliver blockchain benefits to the grassroots.

Categories
Crypto Daily Topic

NANO vs. BAT: The coins to watch in 2019 and beyond

Are you considering investing in cryptocurrencies? Read on to understand just why NANO and BAT should form part of your portfolio.

The meteoric rise of digital assets over the past

Are you considering investing in cryptocurrencies? Read on to understand just why NANO and BAT should form part of your portfolio.

The meteoric rise of digital assets over the past

Are you considering investing in cryptocurrencies? Read on to understand just why NANO and BAT should form part of your portfolio.

The meteoric rise of digital assets over the past couple of years has often revolved around the top cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, LiteCoin, Dash, etc. With thousands of other cryptocurrencies still trading in the market today, you would be ill-advised to think only the most popular coins that you already know about the matter.

The best thing about the creation of tens of thousands of cryptocurrencies when blockchain technology was at its peak, was the variety. Almost every asset that reached the market brought unique features, offered differing options to users and investors, and aimed to dominate the blockchain space by making the world a better place. While not every crypto asset made it this far, in this post, we will be comparing two of the most promising tokens for investment in 2019 and beyond.

Why NANO and BAT stand out

Nano and BAT are relatively comparable by market cap. At the time of writing of this report, Nano was priced at $0.909 with a market cap of $121.16 Million and a supply of 133.25 Million while BAT was priced at $0.266 with a market cap of $361.00 Million and supply of 1.36 Billion. However, from a utility perspective, the two assets vary significantly because they were both created to serve fundamentally different purposes in the market.

If you are looking to find the better of the two tokens – perhaps one that best suits your investment profile, you have come to the right place. In this post, we will compare the two assets based on what each brings to the market, their strengths and weaknesses, as well as the investment opportunities each has to offer. 

Both Nano and BAT have stood strong even in the face of a massive cryptocurrency wipeout that began in early 2018 and killed over 70 percent of all the cryptocurrencies that once traded in the global market. Given that the two have commendable technical specifications and strong development teams and present impressive utility to users, they both offer great investment opportunities.

The basics of Basic Attention Token (BAT)

The world today is run by advertisers. Look at Google. Facebook, too, while it sells itself as a social platform, it mines people’s data to stay rich. Basic Attention Utility, or simply BAT, is a token that was created as a genuine utility to deal with the ills that individuals and businesses in the world of digital advertising have to put up with today.

The creators of this cryptocurrency were inspired by the need to address numerous problems that plague both consumers and publishers in the industry. The biggest of these issues being the economics and organizational dynamics imbalance that benefits only a few players in the industry at the expense of many stakeholders.

In what the creators of BAT call “electronic pollution” in their Whitepaper, individuals are subjected to unnecessary inconvenience and high costs whenever they attempt to make any headway in the digital advertising arena. These inconveniences and costs often come in the form of high data costs, long load times of content, device battery drainage, privacy breaches, and malvertisements (ads that spread malware to users).

Mobile users, in particular, are the worst hit by electronic pollution served by the corporations dominating the advertising space. As user privacy continues to become a major issue of discussion, advertisers are relentlessly pushing the envelope coming up with shrewd ways to harvest user data and often use it against them. Cases of user data and device batteries drained by ads have been so prevalent in the past that many users have resorted to using ad-blocking software.

How BAT works

When users are so fed up with ads that they resort to blocking them, it hurts the publishers, gives the industry a bad name, and prevents legitimate advertisers from generating income even from the remaining ad-viewing users. Before the launch of BAT, the creators of this ad-focused token first created the Brave browser that is open-source and focused on user privacy. It was designed to block off invasive ads and browser trackers as well as accurately measure the user’s attention anonymously in an effort to reward publishers and users what they truly deserve.

The BAT token came soon after the Brave browser, and it runs on the Ethereum blockchain platform. Derived from the user’s attention or ‘mental engagement,’ it makes the users just “targets” for advertisers, but also active players in the advertising and publishing economy by granting them access to a portion of the advertising budget in BAT. Users can purchase content for their friends and even donate to publishers and content providers using BAT. This is how BAT has been able to promote an equitable and fair exchange of value.

Why BAT?

The BAT price has shot up by 150% from its lowest in December 2018 to its current 0.2616. It has never been able to get back to its peak price of $0.86, attained in January 2018. The token’s current market cap is $365 million, with a $65.90 million trading volume as of November 18, 2019. This places it at the 29th spot in the cryptocurrency market.

BAT is most attractive to investors and users who value online content or understand the stakes in the digital advertising world. These are:

☑️ Advertisers: The BAT incentivizes advertisers to integrate the coin in their list of ads. This enables them to receive specific data and a range of analytics regarding their ads and the users they target. Since users’ systems are equipped with attention measurement tools and machine learning algorithms that extract clear and precise advertising and content data, advertisers get deep insights into how their ads are doing and what they need to do to get better returns.

☑️ Publishers: Content creators and publishers are hugely incentivized to create content of greater value, and to expand their publishing platforms to reach wider audiences and earn more. Better still, publishers and advertisers get accurate user feedback when they hand-pick ads they like to see or are relevant to them. Some of the top publishers who currently accept BAT and work with its platform tools are Vimeo, Vice, and The Washington Post.

☑️ Users: If you would like to hop on to the BAT wagon, you can download and use the Brave Browser. You can then interact with the platform and use BAT tokens in a give-to-receive scheme. When you view ads, you get compensated with a certain amount of BAT tokens for your time. You can accumulate and choose what to do with these tokens – from making payments to gifting publishers.

What is Nano?

Unlike BAT that runs on the Ethereum blockchain platform, Nano is a standalone cryptocurrency. It was developed as an alternative to fiat currencies and to bring crypto into the daily lives of ordinary people. However, unlike Bitcoin, Nano is designed to carry out transactions much faster with a more seamless, faster, and flexible Direct Acrylic Graph (DAG) platform.

Nano was launched as RailBlocks (XRB) in December 2014 and is defined as a ‘trustless, feeless, and low latency’ crypto token developed especially to deal with various issues that have held the cryptocurrency industry back, primarily the weaknesses plaguing Bitcoin. Yes, it is accurate to say that the Nano was created as an antidote to the blockchain platform in general, and Bitcoin specifically.

One of the main reasons why many crypto investment reviewers consider Nano a good investment is what happened after the 2018 crypto crash. This was a result of many factors, but many governments banning cryptocurrencies was one of the greatest contributors. The crash was the biggest and first-ever ‘filter’ of the cryptocurrency market that filtered out the chaff from the grains.

This was a strange time when the prices of digital assets massively inflated across the board and then suddenly crashed. While many cryptos did not recover after this, the Nano recovered, and by September of 2018, its price had stabilized. To this moment, the coin is in a good position, gradually growing and showing signs of maintaining it.

How the Nano works

The Nano works using a very simple principle: It stores the data of incoming and outgoing transactions in individual designated blocks of an account, a kind of personal blockchain for the account holder. The main advantage of this setup is that the account balance is securely, quickly and conveniently updated after each transaction. The network does very little work in the process, and this explains why this platform runs smoothly and uses minimal power to process transactions.

The general concept of the Nano cryptocurrency is focus on scalability. The underlying layer that provides security for the platform comes second. The team that developed it succeeded in all fronts – necessitating fee-less transactions while providing all the benefits that dominant cryptos such as Bitcoin have to offer.

To make their coin a better alternative to Bitcoin, the creators of Nano designed it to use a hybrid consensus that combines Proof-of-Stake (PoS) and Proof-of-Work (PoW) algorithms. This combination is aptly named ‘delegated Proof-of-Stake, and it solves three of Bitcoin’s biggest problems in the following ways:

☑️ Nano is scalable: Bitcoin’s biggest problem is that it is very limited and not scalable. Each block in its chain is limited to holding 1 megabyte of data, and one block of transactions can be mined only once every 10 minutes. This limits the Bitcoin network’s speed to a maximum of 7 transactions per second.

☑️ Low latency: The average confirmation time for a transaction on the Bitcoin network is 164 minutes! Nano uses novel architecture dubbed ‘block-lattice,’ which assigns every individual their own blockchain or ‘account-chain’ rather than just a single chain for all transactions on the platform.

☑️ Power efficiency: One of the excuses that some governments use to restrict and even outrightly ban Bitcoin is the fact that mining it uses a lot of electricity. The latest statistics show that the Bitcoin network uses approximately 79.79 terawatt-hours (TWh) of power every year. The Nano platform promises to solve this power problem as it is more power-efficient compared to the blockchain network.

Nano Performance

Nano boasts of a market cap of 122 million and a unit price of $0.919 as of November 18th, 2019. Its trading volume of 3 million and availability supply of 133 million places it on the 45th slot on the global cryptocurrency ranking, way below that of BAT.

The most attractive feature that Nano presents is its development team, which has proven its commitment to creating a project that will save cryptocurrencies even from governments. The team is constantly engaging the cypherpunk community and has previously been described to be “notoriously active” and “very communicative with the community – both on the Telegram and Discord channels,” according to the Cryptorated magazine. 

In summation…

If you are looking to invest in an asset that has demonstrated that the future of payments is crypto, and addresses the core issues that even Bitcoin is still grappling with, then Nano is your go-to asset. The trying times of early cryptos and cryptocurrencies crash of 2018 were the most trying time for both BAT and Nano, but they both survived and are thriving relative to the performance of other assets on the market.

Therefore, as you consider either of the two coins, consider which one best suits your profile, what returns you expect out of your investment, and, more importantly, weigh the opportunities based on how far in the future you look forward to earning your returns.

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Crypto Daily Topic

Lightning network: A major hurdle in the path of crypto regulation

The very first public critique of Bitcoin right after Satoshi Nakamoto proposed it was made by James A. Donald. He said that while such a system (Bitcoin network) was very

The very first public critique of Bitcoin right after Satoshi Nakamoto proposed it was made by James A. Donald. He said that while such a system (Bitcoin network) was very

The very first public critique of Bitcoin right after Satoshi Nakamoto proposed it was made by James A. Donald. He said that while such a system (Bitcoin network) was very, very much needed, the way he understood it, “it does not seem to scale to the required size.” Sure enough, over a decade after its launch, Bitcoin is being plagued by scalability problems – apparently its biggest challenge. But there is another less discussed one: taxation.

For a long time since its rollout, Bitcoin was used primarily by enthusiasts and speculators more as a store of value than a medium of exchange in everyday payments. Bitcoin has a serious scalability problem for two main reasons: the blockchain technology on which it runs limits the amount of information that a single block can contain to 1 megabyte, and a block of transactions can only be added to the chain every 10 minutes. These limit Bitcoin’s processing speed to about 3.3 and 7 transactions per second (TPS). In comparison, Visa does an average of 1,700 transactions per second.

Enter the Lightning Network

Today, more people are adopting Bitcoin to make everyday payments, largely because of the development of the Lightning Network. Popular Bitcoin apps such as Fold and Bitrefill that are designed to make it cheaper and easier for users to make payments with Bitcoin have integrated the Lightning network in their payment systems.

What is the Lightning Network?

The Lightning Network is an additional layer on top of the blockchain network on which Bitcoin runs that is designed to make transactions between nodes faster and cheaper. It is implemented to be a solution to Blockchain’s scalability problems.

How does it work?

The Lightning Network creates a temporary communication channel between two nodes, much like how the Bitcoin Network does, allowing them to carry out as many transactions as they need. When the transactions between the two nodes are completed, the channel is closed, and the outcome communicated to the underlying Bitcoin network. Transactions carried out on the Lightning Network will, as a result, cost only a fraction of a cent while taking a load off the Bitcoin Network.

There is a problem, though. While the Lightning Network significantly improves user’s Bitcoin transaction experience, lowers the costs of transactions, and improves the overall Bitcoin Network speeds, it presents a serious challenge when it comes to taxation.

Bitcoin’s taxation problem

Under the US law, the Internal Revenue Service (IRS) considers Bitcoin and other digital currencies ‘intangible property’ and as such, are subject to capital gains taxes. Everywhere else in the world, cryptocurrencies are rightfully regarded as money that can be used as legal tender in exchange for goods and services.

The United Kingdom treats Bitcoin as a foreign currency, while Germany does not subject it to capital gains tax. Even Switzerland, a tax haven, levies various taxes on Bitcoin, including income taxes, wealth taxes, and profit taxes.

Since Bitcoin payments are taxable transactions, it is vital that users accurately track capital gains accrued when they use it. However, there is a serious problem because its transactions are peer-to-peer, meaning that there is no middleman, such as a bank, between the parties involved in the transactions. Governments have always had an easy time regulating, monitoring, and taxing transactions because of middlemen.

With the widespread adoption of cryptocurrencies and the introduction of efficiency platforms such as the Lightning Network, more people are choosing to make regular payments for goods and services with Bitcoin and other cryptocurrencies.

The problem here is that cryptocurrency users are generally reluctant or find it too bothersome to report taxable Bitcoin transactions to tax authorities, more so for small transactions such as buying a cup of coffee or paying for software. Keeping detailed records of every Bitcoin transaction can be exhausting as there are virtually no tools on the market that simplify the process or make it easy to report such events to the taxman.

To the minority of people who care a lot about conforming to their tax obligations have three options: painstakingly keep records of their transactions, risk getting in trouble with the taxman, or avoid using Bitcoin altogether. To most people in this category, the tax burden associated with making regular payments using Bitcoin overshadows the potential benefits.

How Lightning Network makes the situation worse

Cryptocurrencies and tax laws have only one thing in common: most people do not know the first thing about them. From a cultural and worldview perspective, these two subjects are polar opposites.

Bitcoin was created and is largely accepted as a solution to financial control by governments, exploitation by banks, and abuse by corporations. Cypherpunks, who form the majority of individuals who lead the embrace of cryptocurrency, use it to make a political statement against authority. By using Bitcoin, they are happy to escape the rules and regulations that define the traditional financial world.

In October 2019, the Internal Revenue Service, in its attempt to catch up with the users of cryptocurrency, published its first guide on how cryptocurrency holders can calculate taxes owed on their holdings. The agency admits that the world of cryptocurrency ‘has grown more complex over the years.’ As the general public increasingly adopts the digital currency, IRS’s attempts to come up with regulations and guides on how individuals can remit taxes is a game of playing catch up, to say the least.

The Lightning Network makes it easier for ordinary folk to make payments with Bitcoin, but not to keep records of them. In the eyes of many people all over the world, tax laws are a symbol of the excessive and unnecessary regulations imposed by politicians. Technologies such as the Lightning Network are a savior that finally enables them to take advantage of the benefits of decentralization of digital money, transactions with no regulations, and living in a free society rather than under the foot of a central power of the elite.

Is there a possible solution in sight?

Governments all over the world, including the Lawmakers in the US and China, have realized that outrightly banning Bitcoin is pointless. Governments are slow to find ways to bring cryptocurrencies into the tax bracket and presently have to rely on the goodwill of the citizens to keep records of their transactions and to diligently report and pay their taxes.

However, some industry leaders are making reasonable propositions that may just work. For instance, Coin Center is pushing a bill in the US that would exempt Bitcoin transactions less than $600 from capital gains taxes.

The most viable solution to the Bitcoin taxation problem, according to industry experts, is in policy level and not technical. While regulating Bitcoin wallets may seem like a simpler way for governments to make the taxation problem more manageable, a more practical solution would involve exempting more payments from the burden of taxation rather than attempting to regulate all payments across the board.

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Crypto Daily Topic

Solving Blockchain’s Scaling Problem

Blockchain was conceptualized the first time in 2008 with the launch of Bitcoin. However, it took almost a decade to be fully appreciated as an invaluable public ledger with the

Blockchain was conceptualized the first time in 2008 with the launch of Bitcoin. However, it took almost a decade to be fully appreciated as an invaluable public ledger with the

Blockchain was conceptualized the first time in 2008 with the launch of Bitcoin. However, it took almost a decade to be fully appreciated as an invaluable public ledger with the potential to disrupt virtually every modern industry. That was the year when the price of Bitcoin got close to $19,900 from a low of $978 at the start of the year, and Ethereum went above $850 from just over $8. At its peak value, Bitcoin’s market cap stood at $320 billion – higher than the total value of all M3 UK currency in circulation. This was before the infamous 2018 cryptocurrency crash of January 2018.

Predictably, the massive cryptocurrency explosion was followed by a big crash, from which many cryptocurrencies that had successfully launched ICOs (Initial Coin Offerings) never recovered. During the preceding explosion, blockchain technology was hyped as the most revolutionary since the internet, and many industries started figuring how it could work for them. From transportation and health industries to banking and voting, the promises and claims that the new technology brought may have set people’s expectations a bit too high too fast.

While famous investors, economists, and even finance professionals warned that the rapid rise of the cryptocurrency prices was a bubble that would ultimately burst, a world driven by vague expectations and hunger for profit failed to listen. Most people read the most subtle signs they wanted to see – such as the listing of bitcoin futures by the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) in December 2017 as a stamp of approval that Bitcoin and cryptos, in general, were ripe for investment.

Weaknesses of blockchain come to light

The rise in the popularity of blockchain and the rapid adoption of Bitcoin, Ethereum, and other cryptocurrencies brought blockchain’s most significant problem to light: it is expensive and can barely work on a large scale. When Bitcoin’s price soared to almost $20,000, its network quickly became overloaded, transactions took as long as a day to confirm, and transaction fees shot up to as much as $60 per transaction.

The world may not have been wrong to believe that blockchains presented a massive opportunity for the human race, but it was at this point that many started having doubts about whether Bitcoin was the currency of the future.

The blockchain technology was introduced to the world just at the right time when we were dealing with the aftermath of the 2008 financial crisis. However, in its current state, it cannot deliver on these promises on a global scale because it has one glaring weakness: it just cannot scale.

To see why this is such a concern, it is necessary to understand how blockchain works.

Blockchain is basically a list of ‘blocks’ of ordered data, in the case of cryptocurrency transactions, ‘chained’ together as a linked list. The blocks, once added to the chain, cannot be modified, which means that the list is add-only. There are specific rules that are followed before a block of data is added to the chain known as ‘consensus algorithm.’ In the case of Bitcoin, it is Proof-of-Work (PoW), while Ethereum is presently switching to Proof-of-Stake (PoS).

Due to this nature, blockchain has no single point of failure or control, its data cannot be altered, and the trail of changes made on the platform can be easily audited and verified. However, these benefits do come at a cost because blockchain is slow, and its immutable database has a very high redundancy rate. This is what makes it very expensive to use and virtually impossible to scale to a global scale.

Blockchain’s need to scale

The evolution of the entire blockchain ecosystem has been rapid over the past couple of years. The widespread implementation of blockchain systems for public use has been a significant vote of approval that the world is ready for it. However, the increasing adoption of these systems has brought to light the need for better design or alternatives.

The consequences of the increase in the number of daily transactions on a blockchain network have shown that block difficulty increases, thus increasing the average computational power required to mine a block of transactions. This translates to increased electricity consumption.

Another problem that prevents blockchain from scaling is that an increase in the number of transactions increases the size of the blockchain, making it harder to set up new nodes on the network to help in maintaining the complete blockchain network and to process and verify transactions. Therefore, the systems get not only slower and more expensive, but also unsustainable for such use cases as making regular small payments.

Potential solutions for blockchain scaling

There are numerous real-world uses of blockchain that have shown just how necessary the technology is for the future of humanity. Aside from payment processing and money transfer, it can also be used in monitoring supply chains, digital identification, digital voting, data sharing, tax regulation, and compliance, weapons tracking, and equity trading, among others.

One area that shows great promise and has accelerated the need for blockchain to scale is dApp or distributed apps that run on the blockchain network.

Over the past year, many developments have been proposed to resolve the platform’s scalability problems  – even implemented in some industries. So far, it shows great promise.

Here are some of the most sustainable ideas that blockchain platforms can implement to scale

☑️ Increasing the number of transactions in a block

A blockchain network would scale better when the number of transactions in a block is increased. This can be achieved by either increasing the block size or compressing individual transactions.

Bitcoin’s block size is limited to 1 megabyte. There was a lot of controversy in 2010 through 2015 on whether this size should be altered to accommodate more transactions to help the network scale.

Blockchains can also implement more efficient hashing algorithms that better compress the data to be added to the block. Algorithms that generate shorter signatures would go a long way to reduce the size of the block, and using better data structures to organize transactions may not only reduce the size of the block but also improve the privacy of its content.

☑️ Increasing the frequency in which blocks are added to the chain

The Bitcoin network adds a block of transactions every 10 minutes, while Ethereum does so in about 7 seconds. This duration is a function of the block difficulty level in a Proof-of-Work consensus. Since the frequency in which a new block is added to the chain significantly affects its transaction rate (TPS), reducing this time would significantly increase the network speed and reduce delays.

However, this rate of adding block cannot be arbitrary. Increasing the frequency would mean an increase in the block orphan rate (the rate at which mined blocks are not added to the blockchain due to competition) and an increase in the network bandwidth.

A change of such magnitude would require a hard fork of an existing blockchain platform. Since this is not backward compatible, it would not work for Bitcoin, Ethererum, or other established blockchain systems.

☑️ Implementing alternative communication layers between nodes

There is constant communication between nodes on a blockchain platform depending on the protocol it implements. For instance, in the Bitcoin network, transaction information is sent twice: the first time is in the broadcasting phase of the transaction, and then after the block is mined.

The Lightning Network is an excellent example of a second layer payment protocol that runs on top of the Bitcoin blockchain. It enables faster transaction speeds between nodes by opening a payment channel that commits funding transactions to the underlying layer without broadcasting to it until the final version of the transaction is executed. This is presently touted as the best solution to Bitcoin’s scalability problem.

☑️ Adopting better consensus and verification methods

At the time of writing this post, Ethereum is in the process of switching its consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS) to mitigate its scaling problem. Bitcoin uses the oldest yet most difficult to scale PoW. PoS is not only sustainable in power consumption but also results in higher block addition frequency to the blockchain and, ultimately, better scaling platforms.

Other than the blockchain consensus, a blockchain platform can scale better when better storage architecture that saves space is implemented. Blockchain takes up a lot of storage space because each node is required to have the whole blockchain state in order to verify new blocks. Since the size of the block increases with time, the platform would scale better if nodes could only store parts of the chain required to verify current blocks.

Bottom line

Different blockchain platforms have implemented various strategies in an effort to make their platforms scale better. The bottom line, however, remains that blockchain’s scalability problem persists as no solution has proven to be effective without compromising any of the top features that make blockchain a transparent, secure, and truly decentralized ledger system. However, considering how far the world has come in developing this new technology, we remain optimistic that there will come a solution that will finally make a global-wide blockchain system practical and seamless.

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Blockchain and DLT Crypto Daily Topic

Smart Contracts: A new phase of contracts

When the first cryptocurrency – Bitcoin, came into existence, it brought with it more

When the first cryptocurrency – Bitcoin, came into existence, it brought with it more

When the first cryptocurrency – Bitcoin, came into existence, it brought with it more than a digital medium of exchange. Blockchain, the technology underlying it, has brought with it more possibilities that can revolutionize entire industries and even society itself.

Smart contracts are one of the most interesting and explored applications of blockchain technology. Today, Ethereum is almost synonymous with smart contracts – and that’s because it’s the most successful blockchain in providing a platform for people to create smart contacts. In this article, we discover what exactly smart contracts are, their current standing in today’s world, their strong and weak points, and more. But first, where did this whole concept of smart contracts emanate from?

The History of Smart Contracts

The concept of “smart contracts” originated in 1996 with Nick Szabo, a computer scientist, legal scholar, and cryptographer. He defined smart contracts as “a set of promises, specified in digital form, including protocols within which the parties perform on these promises.” As for why “smart,” he explained: “I call these new contracts “smart” because they are far more functional than their inanimate paper-based ancestors.”

Szabo went on and refined the concept over several years – releasing new literature on the subject. He described the concept of establishing contract laws via e-commerce protocols between strangers on the internet.

But the idea of smart contracts remained that – just an idea, until 2009, when Bitcoin, the first cryptocurrency emerged, along with blockchain technology. Blockchain provided the environment where smart contracts could now be implemented.

Nowadays, smart contracts are mostly associated with cryptocurrencies, whose underlying technology is blockchain. And although Bitcoin broke the ground for smart contracts, it has limited support for the function. Today, the Ethereum blockchain is the most popular platform for creating smart contracts.

What Are Smart Contracts?

A smart contract is a protocol that allows you to exchange anything of value in a transparent, self-executing, and undeniable way without the need for a middle man. Smart contracts are indeed the reason why the blockchain is referred to as decentralized because they allow us to execute trackable, unalterable, and safe transactions without the involvement of a central authority.

Smart contracts have all the information about a transaction, and they self-verify and self-execute once all the conditions have been met. Unlike traditional contracts, smart contracts are purely computer-generated. A programmed code delineates the obligations, rules, and penalties of the involved parties – the parties involved can even be people who have never met but who are nevertheless bound by the agreement.

With smart contracts, a party cannot deny their involvement at a later date. 

Jeff Garzik, the owner of blockchain technology company Bloq, describes smart contracts as such: “Smart contracts guarantee a very, very specific set of outcomes. There’s never any confusion, and there’s never any need for litigation.”

Objects of Smart Contracts 

Any smart contract has three integral parts to it. Also known as objects, the three integral parties are as follows:

  • Signatories – who are parties subject to the contract and who agree or disagree with the terms set out – using digital signatures
  • Subject of agreement – this object has to exist within the smart contract’s environment.
  • Specific terms – these are the obligations expected of all parties and the rules, rewards, and penalties associated with those terms. The terms must be mathematically described using a programming language suitable for the particular contract’s environment.

How Do Smart Contracts Work?

Smart contracts are essentially deterministic processes – which means their end behavior is entirely dependent on initial input. They execute agreements if and when certain conditions are fulfilled. As such, smart contracts work on the “if…then” premise. It’s important to note that smart contracts are not legal contracts, but pieces of code running on a blockchain.

Smart contracts running on the majority of blockchains are akin to a vending machine. You simply input your cryptocoin into the vending machine (in this case, the blockchain ledger). If your input satisfies the code within the smart contract, the smart contract executes the terms of the agreements set out in it.

For instance, “If Person A completes task 1, then payment from Person B is delivered to Person A.” Based on this protocol, smart contracts allow for the exchange of any kind of value, with each contract duplicated many times over and stored on publicly distributed ledgers. Once that happens, data encryption is employed to ensure the full anonymity of the participants.

Features of Smart Contracts

Smart contracts have inherent characteristics that are unique to them, and that set them apart from conventional contracts. These characteristics are as follows: 

Distributed. Smart contracts are replicated and distributed across all the nodes in a blockchain network 

Deterministic. Smart contracts only execute the actions they were instructed to, provided the conditions are met. Also, the outcome is the same, no matter who executes it

Autonomous. Smart contracts self-execute themselves by automating all sorts of tasks

Immutable. Smart contracts are unchangeable after being executed. As such, we can say they’re tamper-proof

Customizable. Before they’re deployed, smart contracts can be coded to suit specific preferences and needs

Trustless. Thanks to their automated process, parties can transact via smart contracts without knowing or trusting each other

Transparent. Smart contracts take place on a publicly available ledger. So, anyone can verify the details of a transaction

Potential Applications of Smart Contracts

Smart contracts can be used to improve and streamline processes across a wide chain of industries. Here are some examples:  

☑️ Elections

Since they are publicly verifiable, trackable, and irreversible, smart contracts would provide a fool-proof, secure system, allaying all concerns about elections rigging. Also, smart contracts would enable voters to vote online, allowing them to make their voice heard from whatever location they’re in. 

☑️ Management

Today’s business operations are riddled with back-and-forth verification and approval processes that slow down productivity. A blockchain ledger acts as a single source of trust as well as streamlines communication and work processes thanks to its accuracy, transparency, and autonomy.

☑️ Automobile

By using smart contracts, it could be easier to determine whose fault it was in an accident – the sensor or the driver, in self-driving cars. Also, automobile insurers could know how to charge rates depending on where, and under which conditions customers were operating their vehicles.

☑️ Real Estate

Smart contracts would help real estate agents cut on advertising costs. Since the blockchain is publicly available, all you would need to do is pay with cryptocurrency and encode your contract on the ledger. On the ledger, your services are open for everyone can see, helping you cut on advertising costs and so on.

☑️ Healthcare

Smart contracts could improve the healthcare industry in so many ways. Firstly, personal health records could be encoded and stored on the blockchain with a private key available to only the relevant parties. Receipts of delivered services could be stored on the blockchain and sent to insurers as proof of delivery. Smart contracts would also make it inherently easier to perform general healthcare management tasks such as regulation compliance, result testing, and managing health care supply inventories.

☑️ Insurance

With smart contracts, it would be easier to fulfill insurance claims when certain conditions are met as per the client-company terms of agreement. Also, smart contracts would come in useful in times of disaster by allowing people to claim their money in a timely fashion. Details like the degree of damage or loss can be recorded on the blockchain and compensation decided upon accordingly. 

☑️ Internet of Things (IoT)

IoT technology enables everyday devices to be connected to the internet in order to improve their usefulness to us. These devices could be connected to the blockchain to track all the products and processes in action.

And in e-commerce, Blockchain technology combined with IoT would enable the location and possession of products so that the right product gets delivered to the right person.

☑️ Mortgaging

Smart contracts would eliminate the need for middlemen and lengthy processing usually involved in mortgage agreements. Also, all details and information could be stored in a location where anyone can verify at all times.

☑️ Employment Contracts 

Smart contracts could help reinforce employer-employee contracts. The terms, conditions, and expectations on either side would be made clear, helping to improve fairness. Moreover, smart contracts can be used to streamline salary processing and avoid delays. They can also be used to improve transparency by preventing companies from altering an employee’s contract once they’re hired. 

☑️ Supply chains

The supply chain – the flow of goods from production to the final user is a central part of many industries, and it involves a lot of work verifying and tracking products. Smart contracts can remove the need for this as every detail is available on the blockchain, where everyone can track the location of commodities at any time. And if an item is lost in the process, smart contracts can be used to identify its exact location.

Besides, smart contracts bring transparency to the whole supply chain so that no party can default or breach the contract terms.

Blockchain platforms That Support Smart Contracts

The following blockchains are some of the most popular platforms facilitating the creation of smart contracts. Of course, Ethereum is the most recognized of them all because it was built almost solely as a smart contract platform. NEM, the blockchain supporting the cryptocurrency XEM, is also popular because it allows users to create smart contracts with Java, one of the most widely used programming languages in the world. These are the go-to blockchains for smart contracts in 2019:

Pros and cons of Smart Contracts

Smart contracts provide several benefits to users. From watertight security to saving on costs to accuracy, the following are the advantages of using smart contracts:

Pros of smart contracts:

Autonomy

Smart contracts allow you to eliminate the need for third parties, e.g., lawyers, facilitators, guarantors, etc. – granting you full control of the agreement process.

Time-efficient

Smart contracts remove the need for intermediaries and the lengthy processes involved in traditional contracts. Everything is executed in a timely fashion, which avoids delays.

Precision

The code that is the smart contract is written in a detailed manner outlining the obligations, rules, and penalties pertaining to the agreement. As such, the smart contract becomes a comprehensive agreement that accomplishes everything upon execution. This precision helps ensure there can be no room for miscommunication or misinterpretation. And in case of any error, it’s easy to track exactly where it occurred.

Safety

Smart contracts are protected with high-level cryptography, which provides the highest safety standards. It’s extremely difficult to hack smart contracts – so users can be sure their documents are safe and secure. 

Efficient

Owing to their accuracy, security, and time-saving qualities, smart contracts provide a high level of efficiency that helps the parties involved realize more value-generating transactions.

Paperless

Since smart contracts use computer codes, the use of paper is eradicated. This saves on stationery costs and also helps companies reduce their carbon footprint and contribute to environmental protection.

Storage and Backup

Smart contracts are accurate to the tiniest of details. All the details of any transaction are stored on a public ledger, and any of the signees can access them at any time. And in case of any dispute regarding the terms of agreement, the parties can refer to the public ledger.

Saves money

As smart contracts only involve the signatories to the agreement, there’s no need for intermediaries and third parties like lawyers, witnesses, etc. Thus, the money that would have been used to pay these third parties is removed from the equation.

Trust

The properties of transparency, autonomy, and security of smart contracts generate confidence in their execution. They eliminate any chance for manipulation, bias, or manual errors. Also, their undeniable nature significantly removes the need for litigations since every detail is clear on the blockchain.

Speed

Smart contracts run on computer codes and exist on the internet. There is no need to process or verify documents manually or correct every little detail. As a result, they can complete transactions very fast. 

Cons of Smart Contracts:

Smart contracts also have their own share of challenges. Most of these challenges arise from the fact that they are still an evolving technology. Some of the challenges are:

They Are Vulnerable

Smart contracts are still a young technology. For example, the code that makes up the contract has to be perfect and bug-free. However, mistakes can still be made that would allow bugs into the network – which would be exploited by scammers.

Government Regulation

The novelty of smart contract technology leaves a lot of questions unanswered. How will governments regulate these contracts? How will they be taxed? What happens when the contract can’t get to the subject of agreement?

Immutability

The unchangeable nature of smart contracts can be advantageous in some situations, but not so much in others. For instance, hackers made away with millions of ether (ETH) after they hacked a decentralized autonomous organization (DAO) in 2016. This was possible partly because developers were unable to fix the code. This is what eventually led a hard fork that gave rise to a second Ethereum chain – Ethereum Classic. Had it been possible to fix the code, this situation would have been mitigated.

Uncertain Legal Status 

Smart contracts do not fit into the current legal framework in many countries. Most contracts today require parties to be at least a certain age and be properly identified. The anonymity and lack of intermediaries make those requirements a challenge.  

Limited Use

For now, smart contracts can only be used to agree on assets of digital value. This poses a challenge when it comes to transacting in real-life assets.  

Examples of Real-life Uses of Smart Contracts

While most governments and the banking establishment have an ambivalent attitude to cryptocurrencies, the technology behind – blockchain, and smart contracts have had a more welcoming reception. Smart contracts are now being implemented across various industries. The following are examples of real-life applications of smart contracts:

Inmusik is a streaming platform that uses smart contracts to decentralize revenues and properly allocate revenues to the rightful contributors. Powered by blockchain technology, the company can facilitate fair and lucrative payouts for artists, collaborators, labels, and also incentivize music listeners by offering rewards to music listeners.

Ascribe is a digital platform that uses smart contracts to facilitate secure ownership of digital work by the rightful artists. The blockchain technology enabling this allows artists to track where their work is published on the web so that they can claim their rightful publication fee.

Tracr is a blockchain-based project that helps improve the diamond industry’s supply chain by monitoring the production and traceability of diamonds, reducing compliance costs, and improving visibility in the chain. It also helps to enhance privacy and security in regards to handling sensitive data in the chain.

Applicature is an agency that uses smart contracts to protect patients’ privacy, reduce healthcare transaction costs, and improve healthcare protocols. Patients have access to a secure and transparent record of their health information, and practitioners get rid of go-betweens and red tape in data conservation and compliance procedures.

The Future of Smart Contracts 

Smart contracts are still an evolving technology. Their future lies in detangling some of the issues that have held smart contracts from achieving mainstream acceptance. Some of these are the question of their legal status, regulation, and the ‘final’ nature of their transactions. 

Still, blockchain enthusiasts see the technology making a significant impact on law, the merchant industry, credit, accounting, etc. It’s possible that we’ll begin seeing smart contract templates – which are legally enforceable smart contracts. We’ll also start seeing accountants utilize smart contracts for real-time auditing as well as the merging of smart contracts into a hybrid of paper and digital content where transactions are verified on the blockchain and corroborated by physical copy.  

Conclusion

Smart contracts have the potential to change how we carry out daily transactions. They can help increase trust, save money, and revolutionize entire industries by introducing more transparency and facilitating accountability. For now, crypto and blockchain enthusiasts are keenly watching smart contract technology evolve further, and if after all, the technology will manage to transcend the current barriers to its full-scale adoption across different facets of businesses and society.

Categories
Crypto Guides

Understanding Public Keys & Private Keys and Their Working

Introduction
Blockchains use public and private key cryptography to perform transactions in a cryptocurrency network. Public keys are generally widely known and used for identification of the person while private

Introduction
Blockchains use public and private key cryptography to perform transactions in a cryptocurrency network. Public keys are generally widely known and used for identification of the person while private

Introduction

Blockchains use public and private key cryptography to perform transactions in a cryptocurrency network. Public keys are generally widely known and used for identification of the person while private keys are secret keys, which is known only to the person who owns it. Private keys must be kept as secret as they are used for authentication of a transaction.

The Difference

Both public and private keys are a part of the asymmetric encryption of cryptography. The fundamental difference between these two is that the former is used for data encryption and the latter for decryption. Simply said, the Public key converts the message to an unreadable format whereas the Private key decrypts that message and converts it back to the original message. Hence, once the message is encrypted, it can never be decrypted without the help of the private key.

Both private and public keys are large integer numbers represented with a combination of numbers and alphabets. Since we understood the concept of public and private keys now, let us see how they are used in the crypto networks.

How does Public and Private key Cryptography work?

We know that digital wallets are used for sending and receiving cryptocurrencies. Digital wallets are not traditional wallets that store money in a digital format, but they store only public and private keys of the owner of the wallet. Private keys are used to sign the transaction through which the cryptos are transferred digitally. This digital signature is used to confirm the transaction was indeed send by the user who claims to have done the transaction, and no one can alter the same once the transaction is issued.

If someone were to have your private key, they could easily send the money from your wallet to their wallet by verifying the private key. Hence private keys are to be kept a secret from others. This is why it is said if the private key is lost, you lose all your money unless you have a technique to regenerate the private key and transfer it to a replica of your wallet or a new one.

The public key is generated using the private key and some additional information using cryptographic algorithms. This public key is widely known to all the people so that the transactions can be done. One may question if the public key is generated from a private key, can’t we reverse engineer and generate the private key from the public key? The answer is NO. The generation of keys is only one way, but the reverse is not possible since we are using asymmetric cryptographic encryption techniques designed by the National Security Agency of the USA.

Thus, using a combination of public and private keys, one can send and receive the money in digital wallets. Using a public key, one can easily decrypt the digital signature of the user signed using the private key.

Bottom Line

This is how transferring of digital currencies generally works. To end it with a simple example, if Nick wants to send some money say in Bitcoins/Ethereum/Litecoin etc. using his hardware wallet ‘Ledger Nano S’ or any online wallet like Coinbase, what should he actually do? He accesses his private key from the wallet and digitally sign the transaction, and this transaction is sent to the blockchain network. This transaction is verified using the public key to validate if the transaction is indeed being done by the wallet that it is being said, and thus the transaction is successful.

We hope you got a clear idea of what Public and Private keys are. In the upcoming articles, let’s discuss what crypto wallets are and their types. Cheers!

Categories
Crypto Daily Topic

Radix: Why Blockchain could be on its deathbed

Many tech experts believe that blockchain may have been the best thing to happen to humanity since the internet. Considering how revolutionary this technology is, and how disruptive it has

Many tech experts believe that blockchain may have been the best thing to happen to humanity since the internet. Considering how revolutionary this technology is, and how disruptive it has

Many tech experts believe that blockchain may have been the best thing to happen to humanity since the internet. Considering how revolutionary this technology is, and how disruptive it has been on almost every industry, you wouldn’t be mistaken to agree with them.

However, blockchain has some serious limitations that are not easy to overcome and it was only a matter of time before something better came along. That better thing is already here, and its name is Radix.

What is Radix?

Radix is not a better version of blockchain. It is a new kind of technology that makes trustless and decentralized digital ledgers (DLT) that will ultimately use smart contracts, but without the scaling limitations of blockchain. The Radix platform will be powered by the super fast and highly scalable Radix Engine, which is designed and built to make the creation of on-ledger solutions easier and safer with certain constraints. This is what makes Radix much more superior to blockchain and a safer bet for the future of crypto.

What makes Radix special is that it is a high-throughput platform to develop and distribute decentralized applications, faster and more efficiently than existing platforms.

The network on which it runs, called the Radix Public Network (RPN) is modular and general purpose. This means that the technology the network uses has multiple layer ‘constraints’ that allow for validation of state transitions rather than compute them. It opens up the possibilities of the network to facilitate the development and deployment of all kinds of smart contracts and high-level APIs.

It is designed to be a global computer on which decentralized applications can run efficiently and inexpensively and the company ran a test to prove it.

The Radix Tempo

Think of a blockchain platform, but without blocks. This new platform uses a new kind of consensus protocol known as logical time. It is completely different from those of blockchain and has given birth to its own kind of data structure dubbed ‘Tempo’. 

The Tempo Ledger is made up of three core components:

  1. A connected cluster of nodes
  2. A global ledger database. This is distributed across the nodes.
  3. An algorithm that generates secure cryptographic records of temporal ordered events.

An instance of Tempo is referred to as a Universe. Any event such as a transaction or a message within a Universe is represented by an object referred to as an Atom. All atoms on the network have at least one endpoint destination that is represented by an endpoint address. Such an address is used to route events throughout the network and is derived from a key identity, such as a user’s public key.

The power of Radix

In a live online test, the startup behind Radix simulated the entire 10-year transactions on the Bitcoin network in just 15 minutes. This was about 400 million transactions between 460 million addresses including full signatures and transaction validations across 1,187 nodes in 17 cities around the world. RPN crossed the one million transactions mark in just one minute and recorded a peak speed of 1.4M TPS (transactions per second)!

Radix has been in development since 2011. The developers tout its protocol as the first consistent distributed database with infinite scalability capability – with relative ordering of related events as well as n-1 fault detection. Radix is designed and built to be easy to use and to use minimal resources. Since it can run efficiently even on devices with limited processing and storage resources, it is expected that it will be massively adopted for use with IoT (Internet of Things) networks and devices.

Shortcomings that spell the demise of blockchain

For a long time, the dominant technology the world relied upon to build and deploy distributed ledgers was blockchain. Since the launch of Bitcoin, everyone saw this technology as the savior of mankind – the tech that finally made it possible for everyone on the planet to be on the same page at the same time on almost everything.

However, with the rapid adoption of blockchain, its two main limitations quickly came to light, and proved almost impossible to solve without coming up with a completely different kind of platform. They are:

☑️High risks of centralization: Consensus protocols are the basis of trustless DLT. Blockchain uses very dangerous consensus protocols that place the platform at a very high risk of centralization. If you have heard of the 51% attack, that is just one example. While each consensus protocol carries a certain level of centralization risk, the most secure and most viable are those with the lowest risk.

PoW used in early blockchain networks are not only very inefficient, they are also only as safe as the amount of computing power dedicated to them. This means that the security of a blockchain network is highly dependent on the cumulative power of the nodes on the network and a more powerful adversary would pose a serious threat.

☑️Scalability: While blockchain is a powerful concept with few weak points from which a threat would attack or disrupt its network, it has a serious scalability problem. This technology was a hit largely because it is decentralized and certainly provides data integrity and transactional trust, but it does not scale very well. 

Blockchain 1.0’s scalability problem is what led to the rise of blockchain 2.0 that powers such platforms as Ethereum. However, they too still have scalability problems that holds the platforms back.

In an attempt to overcome blockchain’s PoW risks, industry experts developed the PoS (proof of stake) and DPoS (delegated proof of stake) consensus protocols. While these protocols mitigated the risks and reduced the processing requirements and power intensity of blockchain networks, they are not fool-proof. To date, it is clear that it is not possible to make a blockchain network 100% decentralized.

Technological solutions presented by Radix

Decentralization is the key attribute that adds value to the creation and distribution of data and assets in DLT systems. This is so since it eliminates the need for a trusted third-party and prevents the abuse of power by a central authority. It was only through a distributed ledger that for the first time, people were able to peg value on created digital objects. Cryptocurrencies are so far the most notable products of distributed ledgers and everyone is keen to see how well they will fare in a Radix system.

Radix has three core guiding principles:

  1. True decentralization
  2. Linear scalability
  3. Developer gratification

True decentralization

Radix is a truly decentralized platform with no staking, no masternodes, no coordinator, and no central council. All the current blockchain platforms have some kind of masternodes, stakes, platform coordinators and even governing councils that to some extent ‘own’ the platform. With Radix, there is just a company to administer the platform.

One special way in which Radix eliminates risk of centralization is by use of permissionless consensus system that scales well in both small and large networks. The system is secured by the passage of logical time. This is a property that cannot be faked or bought within the Radix platform. This consensus mechanism is not only incredibly efficient and reliable, but also very power efficient because it does not use more power unless there is a conflict to resolve.

Additionally, Radix does not apply consensus to all events, only those that are in conflict. This feature makes the entire system highly efficient and scalable even at a global scale.

Linear scalability

A truly global decentralized system must have the capability to scale to every single device and be used by every person simultaneously all over the world with no performance bottlenecks. Blockchain cannot offer such scalability.

Radix’s structure makes it easy to fragment and index the data on the platform such that when there is an increase in network demand, more devices can be added to the platform to boost its throughput.

The data on the Radix network is not cut up ad-hocly; the developers of the platform had the foresight to strategize the fragmentation such that devices would have an easy time finding where any piece of data lives in the overall network structure. This eliminates the need of re-indexing every time data is cut up or added to the network and significantly speeds up the performance of the network.

The data structure on the Radix network is pre-cut to 18.4 quintillion shards and key fields are referenced to find where a particular piece of data is on the structure. This ingenious data structure makes the platform highly scalable with no overhead. Both tiny and humongous data sets will find a snugly place to live on the network, meaning that large businesses will find it just as easy to use as an individual does.

Developer gratification

The core mission of the Radix startup is to develop a platform on which developers can build and deploy their decentralized applications (DApps). Much like the Internet has been an enabling technology, Radix aims to offer the very best tools that anyone can use to develop and distribute anything they can think of.

The Radix platform is still under development but this far, it has proven that it can deliver what it promises. The geniuses behind it are imagining a reality where every device with connectivity – smartphones, security cameras, microwave ovens, televisions, smart cars – can join the network and be a part of the consensus mechanism. In all these, the developers should be the biggest winners to spur even greater innovation and to nurture a community in which everyone can believe in.

Blockchain may have ushered in the age of decentralized ledgers, which birthed cryptocurrency, but it has run its course. A blockchain platform cannot be truly decentralized, and there is nothing that can be done to make it scalable enough to be as powerful as a Radix system. It is justifiable, therefore, to conclude that blockchain was the past and will eventually be replaced by Radix, the future of true decentralized digital ledgers.

Categories
Cryptocurrencies

Public and Private Keys: A must read before buying any cryptocurrency 

If you’ve heard of cryptocurrency, you’ve probably also heard of private and public keys, or at least private and public address. You’ve also probably wondered about the concept behind them.

If you’ve heard of cryptocurrency, you’ve probably also heard of private and public keys, or at least private and public address. You’ve also probably wondered about the concept behind them.

If you’ve heard of cryptocurrency, you’ve probably also heard of private and public keys, or at least private and public address. You’ve also probably wondered about the concept behind them. This simple guide is all you need to understand the concept and secure your coins. 

Private and public keys are important components of blockchain – the technology behind cryptocurrencies. To understand cryptocurrencies better and stay safe while interacting with them, it’s essential to know the meaning of private and public keys and their role in cryptocurrency. 

Public and private keys are based on cryptography, which simply means the science and art of encrypting information so that third parties can’t understand it. In other words, cryptography enables data to be stored and communicated in a manner that unauthorized parties cannot understand. It’s employed today in private and public keys to make blockchain- and hence cryptocurrency, a safe environment for users. 

Cryptography is mostly famous for being used in wartime, especially by Julius Caesar, the Roman military general who sent encrypted messages to his generals to ensure the enemy couldn’t understand them. Known today as Caesar’s cipher, his cryptography involved shifting each letter of a word three times to the left of the alphabet. 

Today, encryption is all around us, even if we don’t realize it. From our phone apps to our phone screens to our credit cards – all these are encrypted to protect our personal information.  

Symmetric Key Cryptography and Asymmetric Key Cryptography  

Cryptography exists in two forms: asymmetric key cryptography and symmetric key cryptography. 

In symmetric cryptography, the same key is used to both encrypt and decrypt the message. A good example is Julius Caesar’s encrypted messages. The same key, i.e., using three letters to the left of the alphabet, can be used to decrypt or decode the message. Another example is today’s door lock, in which the same key is used to lock and unlock the door. 

The drawback to symmetric key cryptography is somebody can figure it out soon enough. Using the above examples, for instance, it’s easy for someone to steal a key to a door lock. And Julius Caesar’s opponents could figure out the cipher, eventually.

Asymmetric cryptography, on the other hand, is more complex. Two keys are used to decrypt information. In the case of blockchain, one key – the public key, is used to encrypt data and a second key – the private key, is used to decrypt it. 

Asymmetric cryptography adds an extra layer of security to a transaction by securing both the item transacted and the recipient’s ability to access it.  

Public Key Cryptography and Blockchain

The idea behind blockchain technology is to create a network where people can securely carry out transactions without the possibility for a third party or a central authority interfering. The security of the network, transactions, and parties involved is crucial to this process. In a traditional model, the third party, or the authority, usually provides the security – like the bank overseeing transactions, or protecting money in general.

But the blockchain model has no overseeing authority. So how will security be ensured? The answer is in public and private keys – which are based on cryptography. 

Public and private keys are digital assets that, when combined, form a digital signature, allowing the secure sharing and unlocking of information or data. 

What’s the Difference between Public and Private Key? 

Since the blockchain model uses cryptography to facilitate transactions, and public cryptography uses both public and private keys, every user on a blockchain network has a public and private key.

Now, the keys are usually randomly generated alphanumeric sequences that are unique to every user.   

A blockchain network, e.g., Bitcoin, usually generates a private key when a user creates a wallet. This key uses 256-bit encryption. This encryption makes use of really large numbers that unauthorized parties can’t guess or calculate. After the key is generated, it’s incredibly important that it’s kept private and secure. Nobody other than the owner is to see or have access to it. 

The private key confirms a person’s identity when carrying out a transaction on the blockchain. 

By contrast, the public key is exactly that – the key that an individual shares with the public, or in this case, the blockchain network. The public key is also generated by the blockchain network based on the private key. This means it’s only that private key in the world that can decrypt a message attached to that public key.

It helps to think of the public and private keys in real-world terms. Think of the public key as your bank account number – people who know it can send you money through it. The private key is like your pin code – it’s only known to you, and you use it to access the money in your bank account. 

How Public and Private Keys Work

An individual’s private and public keys combine to create a digital signature that proves their ownership of funds and allows them access to those funds. To carry out a transaction on the blockchain, a person must use both keys together. 

The following is an illustration of how public and private keys work. Person A wants to send, let’s say, Bitcoin to Person B. They can do this by obtaining Person B’s public key, and attaching the relevant information – in this case, the number of coins, to that public key, and then send it to Person B. 

As the information is attached to person B’s public key, and it’s only their private key than can decrypt the information on their public key, Person A is sure that it’s only Person B who can see that information on the blockchain network. So, Person A will use Person B’s key to encrypt the information, because only Person B’s private key can decipher it.

Person B receives the information from Person A, and using their private key, creates a digital signature which will unlock the information and access it. 

The role of a digital signature is central to this process. On the blockchain network, it serves these three purposes:

☑️ It proves that the owner of a private key has authorized a transaction

☑️ It proves that a transaction is undeniable – i.e., there’s no doubt that the owner and they alone authorized the transaction, and they cannot repudiate their involvement in it in future

☑️ It proves that the transaction has been authorized by that signature and has not been altered or modified by anyone after it was signed

How does Blockchain Use Cryptography? 

The blockchain model uses cryptography in these ways: 

Protects the identity of users – It enables every individual to keep their identity private, so they can securely transact on the network

Secures blocks –It allows people to execute transactions on the blockchain, which then adds blocks which no one can modify, sealing them permanently

Validate transactions – It enables individuals on the network to confirm transactions are indeed initiated by who they say they’ve been initiated by, and they can thus be added on the blockchain 

Conclusion 

It’s exciting to see how cryptography – the technology behind public and private keys, has evolved from being used during medieval wars to become the technology that enables people to transact on the futuristic blockchain world. And as blockchain technology continues to become accepted by other industries outside of finance, cryptography will continue to be central. It will be exciting to see how art and science will play a role in blockchain-based processes in the future. 

Categories
Crypto Videos

What Is Proof Of Stake & Will It Make Ethereum Better Than Bitcoin

https://youtu.be/iVWWsAGB0K0

 
What is proof of stake, and how does it work?
The proof of stake system is a consensus protocol that came as a response to the shortcomings

https://youtu.be/iVWWsAGB0K0

 
What is proof of stake, and how does it work?
The proof of stake system is a consensus protocol that came as a response to the shortcomings

 

What is proof of stake, and how does it work?

The proof of stake system is a consensus protocol that came as a response to the shortcomings of proof of work. It is attracting a lot of attention as of late, with Ethereum switching its consensus protocol from proof of work to proof of stake. Proof of stake is nothing more than an alternative way to verify transactions on a blockchain.

How does it all work?

Proof of work and proof of stake works very differently, even though they are trying to do the same thing. The proof of work system has its users validate transactions and create new blocks by solving a “puzzle,” which requires some computational power. On the other hand, a proof of stake consensus algorithm requires the user to show ownership of their funds to validate transactions.


When it comes to proof of stake system, the creator of a new block is picked in a pseudo-random way. The block creator has more chance depending on the size of their “stake.” In the proof of stake system, blocks considered forged or minted rather than mined. Nodes who validate transactions and create new blocks with this system are not miners, but rather forgers.
To validate transactions and create blocks, a forger must stake their funds. Their holdings are being held in an escrow account, which acts as collateral for any potential fraud attempts. If a forger tries to validate a fraudulent transaction, they lose both their staked holdings and their rights to participate in the process. This way, the proof of stake protocol incentivizes forgers to validate only non-fraudulent transactions.
An important thing to note is that most proof of stake projects already created and distributed their digital currency units already. When this is the case, the forgers receive transaction fees instead of new cryptocurrency as rewards. This is considered true only if the cryptocurrency cannot inflate itself by minting more and more coins.

Block selection methods

Proof of stake consensus algorithm needs a way to select future forgers. There are two main ways to do so:

Selecting a user randomly
Selecting a user based on their coin age.

Selecting a forger only by the size of their account balance would go against the whole premise of cryptocurrencies, and is a bad idea. That way, people with more funds would get richer, while the ones with fewer funds on their account would be hindered and have less control over block creation. To counter this problem, these two methods have come up as the most popular and reasonable.


Randomized block selection

The randomized block selection method is just what it sounds. The method seeks a user that offers the lowest hash value regarding the size of its stake. As all stake sizes are public, each node can predict (with high probability) whether they will be selected to forge the next block.

Coin age-based selection

This system is a bit different than the randomized block selection one. It selects the next forger based on the ‘coin age’ of the node’s stake. Coin age is a multiplier of the number of days the funds have been staked and the number of coins that are being staked. Coins must be staked for 30 days before they can compete for block creation. Users with larger stakes have an advantage, but so do users who have staked for a longer time. Once a user forges a block, their coin age is reset to zero. After a node forges a block, they must wait at least 30 days before creating another block. This mechanism promotes decentralized forging while maintaining a power balance between large stake forgers and lower stake forgers.
Advantages of proof of stake
Proof of stake is a much more environmentally friendly and efficient consensus algorithm than the proof of work method. The electricity and hardware costs are much lower due to how the method is made.

Unlike proof of work system where a 51% attack is performed by obtaining the majority of hash rate, proof of stake attackers would be required to obtain 51% of the cryptocurrency to perform the attack. Even though performing a 51% attack is possible, forgers with the majority of funds would not risk their money to perform such an attack. If the cryptocurrency price drops due to the attack, their holding value would also drop.

Conclusion

Proof of stake is a consensus algorithm that is created as an answer to the disadvantages of proof of work. It offers a unique way of validating transactions and creating blocks, and it is gaining popularity. With that being said, the Proof of Stake algorithm is not better than Proof of Work on all fronts, and each project should consider both methods before picking the one they like.

Categories
Crypto Guides

Blockchain Technology – The Fundamental Aspect Of Most Of The Cryptocurrencies

Introduction
In this crypto guide, we have seen various articles about cryptocurrencies so far. In this article, let us examine the underlying technology, which essentially enables the working of these

Introduction
In this crypto guide, we have seen various articles about cryptocurrencies so far. In this article, let us examine the underlying technology, which essentially enables the working of these

Introduction

In this crypto guide, we have seen various articles about cryptocurrencies so far. In this article, let us examine the underlying technology, which essentially enables the working of these cryptocurrencies. It is none other than the revolutionary blockchain technology. Bitcoin and blockchain terminologies have been synonymous for a long time, but not anymore. The true potential of blockchain is realized in the past decade, and its applications are being widespread in many industries currently. The adoption is still in its nascent stage, like any other new technology in its initial days. The industries which have adopted the technology are reaping benefits in millions if not in billions already. So, it is important for us to understand what this technology is all about.

What is blockchain?

Blockchains are open global distributed ledgers, which are necessarily a chain of blocks. These blocks contain transactions or records bundled together with encryption techniques called cryptographic hash functions to form a blockchain. This is the simple definition of blockchain. The concept is as simple as it sounds, but it revolutionized the way the records are maintained in any industry.

Blockchain platforms are peer-to-peer networks. Making the ledger open and distributed; this means everyone involved in the system will have a copy of the ledger. The transactions being committed in the network are validated using a consensus algorithm. Say a block has a capacity of 1 MB of transactions, these transactions are verified and sealed in a block. This new block is linked to its previous block using cryptographic techniques. Once the block is linked in the blockchain to the last block, the contents of this block can never be changed. This property is called ‘immutability,’ a significant feature of blockchain.

What are these cryptographic hash functions?

Cryptographic hash functions are standard algorithms designed by the National Security Agency (NSA) of the USA. Any information can be sent through this algorithm, and the output we get is the hash of the input, and it is a unique value. Every block in the blockchain is linked to its previous block using the hash value of the last block. This hash value of a block is generated by all the transactions of a block plus the hash of the previous block. Thus, if we make any change in a block that is mined already, the hash value of that block is changed. All the blocks before that block would be disturbed. Thus, the property of immutability comes into the picture. This is the basics of how blockchain technology works in general.

Different blockchain platforms:

Since realizing the true potential of blockchain, different blockchain platforms are developed for various industrial use cases.

Hyperledger platforms: These platforms are developed for cross-industry applications. It is an umbrella of open source platforms like Hyperledger Fabric, Hyperledger Sawtooth, Hyperledger Iroha, and so on, designed for each industrial use.

Ethereum: Ethereum is, again, a platform developed to deploy self-executed contracts known as smart contracts. Also, a platform to create decentralized apps (Dapps) to use the blockchain functionalities in everyday apps we use.

R3 Corda: This is a consortium of around 300 different firms working together in the financial background to nurture and develop the technology to revolutionize the financial sector.

These are only some of the various platforms in use today.

Bottom line

Blockchain, as a technology, has a vast potential to revolutionize many industries. Blockchain developers will be required on a massive scale in the coming future to bridge the gap and to fulfill the requirements. The world where privacy is at stake at the moment, blockchain is a savior to ensure our privacy and security of digital information.

Categories
Crypto Guides

Knowing About the EOS Cryptocurrency & Its Blockchain

Introduction
EOS is the native cryptocurrency of the EOS blockchain. EOS blockchain is a decentralized open-source platform built to support the development of decentralized apps (DApps) with core functionalities helping

Introduction
EOS is the native cryptocurrency of the EOS blockchain. EOS blockchain is a decentralized open-source platform built to support the development of decentralized apps (DApps) with core functionalities helping

Introduction

EOS is the native cryptocurrency of the EOS blockchain. EOS blockchain is a decentralized open-source platform built to support the development of decentralized apps (DApps) with core functionalities helping to develop industrial-scale applications.

The EOS blockchain platform was announced its white paper in 2017 by a private company called block.one. The platform came into the market as an open-source platform in June 2018. The EOS is informally called the ‘Ethereum Killer’ in the crypto community. That is because this platform offers almost all the features of the original Ethereum platform but with a lot of improvements. These improvements enable DApp developers to build industrial level applications with ease.

Objective

While there are many blockchain platforms in action now, we can say each one has its unique features suitable to different industries in the market. Each platform is developed to overcome the shortcomings of its predecessor. EOS platform has been introduced to improve functionalities offered by Bitcoin and Ethereum platforms. EOS whitepaper says it is possible to run 1000 transactions per second during the initial stages, and later it aims to run a million transactions per second. Thus enabling industrial level applications to be run on the platform without scaling issues. Moreover, the platform has made transaction fees-free, making people choose EOS over other cryptos.

Consensus

So how does the EOS work to hit a million transactions per second? EOS uses the Delegated Proof of Stake (DPoS) as its consensus algorithm. There will be only 21 block producing nodes in the network. These blocking producing nodes are chosen by the people in the network who hold EOS cryptocurrency on a voting process, which happens continuously. Thus, maintaining the integrity of the users in the system is of utmost importance to the block producing nodes. Hence the transaction should be validated by only these 21 nodes to get confirmed in a block, and it is a relatively straightforward process. The block producing nodes are rewarded with EOS for validating the nodes.

EOS ICO

To ensure the native currency of the platform (EOS) is widely available, a billion coins were sold on the Ethereum platform as ERC 20 tokens. The ICO was held for an entire year. 10% of these tokens are reserved for Block.one, the founding company. EOS raised a record amount of $4 billion in its ICO, although the working product wasn’t available in the market then.

Market Cap

EOS stands at seventh place in the crypto world with close to $3 Billion in value. The price of each coin is $3.25 as of 30/10/2019. The 24-hour trading volume is around $2.5 billion, with 938 Million coins circulating in the market.

Price History

EOS began trading with a price of $1.03 in July 2017. The coin didn’t get much attention for the first four months, and the price started slumping. By November 2017, it was trading at $1.21, and by January 2018, it is traded at $18.06. Then from a peak of $18.06, it fell to $4.08 by March 2019. It slowly increased and decreased from then without a very drastic change, and the price as on 30th October 2019 is $3.25.

Conclusion

There has been a lot of negative talk about EOS, but crypto enthusiasts see high potential in the EOS platform because of the promising features it offers. Applications can be written in any language on EOS, unlike the Ethereum platform, which allows only its native programming language, Solidity. Hence not only crypto enthusiasts but also industry experts believe that the EOS platform is revolutionary due to its scaling and flexibility options.