Categories
Cryptocurrencies

What is Holochain (HOT)? Here is Your Complete Guide

Blockchain has been hailed as the technology of the moment, one that will disrupt industries with its groundbreaking decentralized, immutable, and transparency features. That’s fine and dandy, or at least it would be if the current blockchain systems like Bitcoin and Ethereum did not have massive scalability issues or required excessive amounts of energy just to run. Blockchain holds incredible potential, but these problems are holding it back. 

Enter Holochain, a new distributed ledger protocol and decentralized application platform that relies on an agent-centric consensus system. On Holochain, every network participant runs their own ledger and can function independently of other nodes on the network. This means faster processing times as well as environmentally friendly technology. 

In this guide, we’ll get into a more detailed overview of the Holochain project, as well as the exciting and unique solutions it brings to the distributed ledger space.

What’s Holochain?              

Holochain is a distributed ledger technology that allows developers to build distributed data structures and wants to change the data-centric approach of traditional blockchains to an agent-centric paradigm. It also aims to offer a more scalable and customizable distributed ledger solution that’s way more superior to the conventional blockchain.

In the current blockchain setup, information is stored and secured with cryptographic hashes on a distributed network. Each node/computer/participant takes part in securing the network and implementing a global consensus. This makes it a decentralized system, which is advantageous since it eliminates a single point of attack. This is one of the reasons why blockchain has been a hit in the tech space. 

However, it’s also the basis for some of the biggest blockchain’s weaknesses. Since every single participant must verify transactions, it also makes it slow and unscalable. This is partly why some cryptocurrencies have transaction confirmation times of up to hours, and fees are so high. 

Holochain: Agent-centric

Holochain implements what it calls an agent-centric structure. In this architecture, each node runs their own copy of the blockchain that connects to the larger network via a cryptographic key. 

This approach differs from the traditional blockchain in that, in a blockchain, all participants must come to a common consensus, and each must maintain the entire blockchain, which raises serious scalability issues. With Holochain, a participant only needs to maintain their individual ‘copy’ of the network and the unique key that connects them to the larger chain. 

Holochain describes this unique data storage like this: ” Where is the English language stored? Every speaker carries it. People have different areas of expertise or exposure to different slang or specialized vocabularies. Nobody has a complete copy, nor is anyone’s version exactly the same as anyone else’s. If you disappeared half of the English speakers, it would not degrade the language much.”

How Many Transactions Per Second Can Holochain Handle? 

Unlike traditional blockchains, the answer isn’t as simple or straightforward. But for clarity’s sake, we can say an unlimited number. Basically, transactions per second have no much meaning on Holochain due to how the technology is structured. 

Holochain maintains a distributed hash table (DHT) of the data represented by each individual blockchain. The team wants you to look at this protocol like you would a dance style. By looking over a dance floor, you can tell who is dancing to hip hop and who is dancing salsa. How many people can dance at the same time? The answer is simple: as many as the dance floor can handle. There’s no need for a global consensus system to keep track of every single individual/dance move.

The developers explain: “So, Holochain as an app framework does not pose any limit of transactions per second because there is no place where all transactions have to go through. It is like asking, ‘How many words can humanity speak per second?’ Well, with every human being born, that number increases. Same for Holochain.”

What Kind of Applications can Holochain Support? 

Holochain is a good fit for systems that need a lot of individual input – with every participant having a limited copy. Holochain would lend itself perfectly to social media platforms, supply chain, peer-to-peer platforms, intelligence communities, reputational cryptocurrencies, and cooperatives. 

However, Holochain’s protocol may not be suitable for anonymous data sets, since everyone on the network maintains a component of the whole system. As well, Holochain may be unfit for hosting large files or supporting positivist-oriented applications, like the vast majority of cryptocurrencies.

What Programming Languages Does Holochain Support?

Holochain itself is written in the Go language. However, it supports decentralized applications written in JavaScript or Lisp. It also supports CSS, HTML, and JavaScript front-end frameworks.

The Holochain team states that the platform is flexible in terms of supporting new languages, so there are more possibilities in that front in the future.

Holochain and the Environment

Holochain bills itself as an environmentally friendly distributed ledger system, which is the opposite of traditional blockchains. Since there is no need for every node to maintain and validate the entire network, Holochain consumes a fraction of the bandwidth that runs traditional chains. 

Also, Holochain does not rely on mining to verify transactions. Hence, there is no power-hungry use of electricity.

HOT Token & Holo Fuel 

Holochain is yet to launch it’s mainnet. As such, the team developed a placeholder token so as to raise funding. This token is known as HOT, and it’s based on Ethereum. The team hopes to replace it with Holochain’s own native currency known as Holo fuel. Once Holochain goes live, HOT tokens will be exchanged for Holo Fuel. 

Who’s on the Holochain Team?

Holochain is the brainchild of Arthur Brock and Eric Harris, who began work on the project in December 2016. Brock has 10+ years of experience in systems architecture, while Harris holds a Bachelor of Science in Computer Science from Yale. Harris is also a successful entrepreneur.

A further core team of 12 is working on the project, and it comprises developers, software architects, and UX/UI experts. 

HOT’s Tokenomics

HOT’s statistics are as follows, as of June 12, 2020. The token trades at $0.000596, and it’s occupying position #66 in market rank, with a market cap of $98, 417, 992. The token’s circulating supply is 165, 218, 400, 919, while its total supply is 177, 619, 433, 541. Its all-time high was $0.002538 (May 29, 2019), and its all-time low is $0. 000219, (March 13, 2020). 

Where to Buy and Store HOT

You can get some HOT from Binance, Bitrue, and WazirX. You will need to exchange BTC, ETH, or BNB for the token. 

As an Ethereum-based token, HOT can be stored in any wallet that supports Ethereum. Popular choices include MyEtherWallet, Mist, Parity, Trust Wallet, Atomic Wallet, Trezor, and Ledger Nano. 

Final Words

Holochain is an ambitious alternative to the blockchain tech we know about. It’s completely turning over our ideas about how distributed systems can function. If an agent-centric, rather than a data-centric protocol, is what’s needed to achieve much-needed scalability for distributed structures, then Holochain is on it’s way to major success. The blockchain community will be keeping a close eye to see future developments.

Categories
Cryptocurrencies

The R3 Corda Project

Many people think that blockchain and distributed ledger technology are the same things. But as you will realize in this article, blockchain is one type of distributed ledger technology. There is no doubt that blockchain outshines all other types of distributed ledgers. After all, blockchain’s first application was Bitcoin – which is, to put it like this: a celebrity digital currency.

Distributed ledger technology provides several benefits – one of them being decentralization. Decentralization removes a single point of failure in systems, as well as granting all participants of a network equal access to data.

The R3 Corda project takes advantage of distributed ledger technology to create an open-source enterprise-grade platform on which businesses can transact with each other in a private, affordable, and efficient smart contract platform.

The R3 blockchain consortium was formed in 2013 and has over 200 members from diverse sectors.

The Corda Model

The Corda platform model is underpinned by three core concepts, which are:

i) State Objects: These represent an agreement between two or more parties. State objects are governed by what is known as a Contract Code – whose work is implemented in portions of human-readable legal text.

ii) Transactions: These are activities that oversee a state object from start to completion.

iii) Flow Framework: This is the infrastructure that enables parties to coordinate activities without the need for a central controller.

Business Principles of Corda

  • Inclusion. Members can discover and transact with each other in a free, single, and open network.
  • Assured Identity. Parties will have the knowledge of who is who in the network
  • Privacy. The only parties who will be privy to the details of a transaction are the involved parties only.
  • Shared logic. All characteristics of an agreement managed by the system will be described in computer code that is shared among concerned parties to ensure the consistency and validity of agreements.
  • Legal footing. Any deal that is recorded on the ledger is admissible evidence and legally binding for all parties involved – in case of any dispute.
  • Authoritative. Any information on the ledger is considered authoritative. There are no ‘shadows’ of authoritative data that are kept somewhere else. What parties see is what they get.
  • Immutability. Data entered on the ledger is final and cannot be deleted. In case of any errors, parties will wait until the next transaction to address it.
  • Open. The system is open in every aspect: open source, participation, development, governance, and standards so that it balances its diverse user needs in a transparent fashion.

The R3 Corda’s Architectural Vision

 R3 Corda aims to create a blockchain environment that is underpinned by the following features:

 i) Scale. The network will scale to support billions of transactions daily across industries

 ii) Longevity. Different versions of Corda will be able to run side by side, and applications can run on later versions, without having to change any code.

 iii) Secure. The platform will operate as though expecting an adversary at any time. So, security settings are forever on high alert.

iv) Stable. The network will evolve carefully, with each version maintaining consensus critical network standards to avoid bugs.

v) Interoperable. On the platform, multiple applications will be able to coexist and interact with each other. 

Notaries

Corda aims to achieve more scalability than the existing distributed ledgers, including blockchain, as well as provide much more security than the one found on blockchains. 

The platform will achieve this by including “Notaries” in their network. Notaries on Corda function much like miners on the blockchain, but without the massive energy costs associated with mining. Notaries validate transactions by time-stamping them. Only after a transaction has been time-stamped can it be recorded on the immutable ledger. 

Notaries can either be centralized (in which case they will be R3 nodes themselves or banks) or distributed (in which case they will use a consensus algorithm, mostly the Practical Byzantine Fault-tolerance Programming.)

Corda and Smart Contracts

Corda enforces its business logic via the use of smart contracts. A smart contract on the R3 Corda platform is a simple function through which a user can accept or reject a proposal. Users can also compose smart contracts using simple and reusable tools.

A transaction is valid when and only if the contract code is associated with a state agrees. A transaction’s initiator has to construct a transaction that adheres to the constraints of that transaction.

Corda uses the Java Virtual Machine6 –- which has a wealth of libraries and a large skill base, for the creation of smart contracts.

How Corda Achieves a Global Distributed Consensus

Corda has three main tools to help it achieve a globally distributed consensus:

  1. Smart Contract Logic – Which specifies constraints to ensure transactions are valid as per pre-set rules and procedures.
  2. Uniqueness and timestamping of services known as notary pools that order transactions temporarily and eliminate conflicts
  3. A ‘Flow Framework’ that simplifies complex protocols between and among distrusting parties

Not a Blockchain

Corda is an implementation of distributed ledger technology by a company called R3. The implementation is modeled after Bitcoin’s UTXO model.

Corda is not a blockchain. It has some similarities with blockchain, but it’s leaner and enables a plug-and-play model.  Mike Hearn, a member of the leading team, writes: “There is no blockchain…Corda is not tied to any particular consensus algorithm.”

Corda’s approach makes it stands out as one of the leading consortia in the DLT/blockchain space.

CorDapps

CorDapps are the Corda platform’s version of decentralized applications. Developers can create their own CorDapps from scratch using the Java CorDapp Template or the Kotlin CorDapp Template.

Corda has also developed a set of CorDapp examples that can serve as templates for developers. These templates are free for access and will demonstrate to developers how to implement core functionalities of CorDapps.

Here are some examples of Cordapp Projects

Auction CorDapp – A CorDapp that allows users to carry out public or private auctions

Be-Well – A CorDapp that allows clients to purchase wellness services via brokers 

Cordite – An open-source, enterprise-ready and finance grade CorDapp that provides decentralized economics and governance services 

Delivery vs. Payment Asset Transfers – A CorDapp that lets users develop delivery-vs-payment of an asset coordinated by a clearinghouse

Oraclize API – An oracle service that uses authenticity proofs to prove that data fetched from the original source has retained its integrity.

What’s In It for Businesses?

By signing up on the R3 Corda platform, organizations can:

  • Streamline complex processes and hence reduce operational costs and risks
  • Acquire new, cutting-edge ways of doing business and hence gain a competitive advantage in the market
  • Increase revenue by a connecting to and monetizing new networks
  • Create a climate of trust between various players

Final Thoughts

The Corda project is showing the world the power of distributed ledger technology. It’s right up there with other projects that rely on blockchain, like the Hyperledger project. Corda provides a great solution for businesses to streamline processes, reduce overhead costs, and achieve business results faster. Through its CorDapps platform, users can create decentralized apps that create useful solutions for society.

Categories
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?

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
Cryptocurrencies

Blockchain – Public, Distributed, Global Ledgers

You have probably already heard the term ‘Blockchain’ in the context of a new technological innovation. You would not be wrong to compare this advancement with other significant innovations such as the Internet because of its far and wide-reaching applications. What makes it so unique?

Consider an online Google document. When you create a document and share it with two other people, the original document remains, but everyone has access to it. The document is considered ‘decentralized’ since it can be accessed and modified by multiple people at the same time. The best part about such an online document is that everyone sees all the changes (and can even track them) when they are made, making it very transparent.

While blockchain is a tad more complicated technology than a Google doc, this analogy lays bare three vital features of blockchain:

☑️It is a digital record of events (transactions) that is distributed among many people. It is not copied or transferred copies.

☑️It is decentralized. This means that multiple individuals have real-time access to the asset and is not ‘owned’ or ‘controlled’ by a single entity or person.

☑️It is transparent. Being a ledger, all the people with access to it can trust the document since all the changes are preserved when made. 

So, what is blockchain?

Blockchain is best described as a distributed database. It is a storage technology where a digital ledger of transactions are stored in groups of transactions or sequence of blocks, chained together and distributed among many users in the network. This is where the term ‘blockchain’ originates.

Because blockchain is a way to keep records of items stored in millions of computers all over the world, it is essential to understand that it is not a device or currency. Think of it as an incorruptible ledger of transactions that are connected to each other such that one cannot be altered without requiring the alteration of all the other linked records.

Blockchain is undeniably an ingenious invention that is already conquering every aspect of modern human life – almost as much as electricity and the Internet did. This technology was the brainchild of one or a group of individuals known by the pseudonym Satoshi Nakamoto. To this day, the identity of Satoshi Nakamoto is still unknown.

Satoshi Nakamoto introduced blockchain to the world sometime in 2009 with the publication of the Bitcoin whitepaper. This innovation was largely inspired by the 2007/8 financial crisis, whose primary cause was the manipulation of the property market by financial banks. Bitcoin emerged as a currency alternative that would be free from manipulation, devaluation, taxation, or control by a central body. However, blockchain, the technology on which it runs, has since then evolved into something much more significant than just money and touching on almost every industry.

The humble beginnings of Blockchain

Contrary to what most people believe today, blockchain technology did not just arise out of nothingness with the publication of the Bitcoin whitepaper in 2008. Before it found its application in cryptocurrency, blockchain was a concept in computer science that had been around since 1979. In particular, it was theorized for use, in its primitive form, in the domains of data structures and cryptography.

With the invention of the hash tree by Ralph Merkle, patented as the Merkle tree in 1979, the first form of blockchain was already in practical use. Back then, the hash tree was used to handle and to verify data transferred between computer systems in peer-to-peer networks. The hash tree proved useful in validating data and ensuring the integrity of the data in the receiving system. This technology also ensured that false data was not transmitted and that users could prove the integrity of information shared using these early computers.

By 1991, the Merkle tree had evolved enough to create a chain of secured blocks of information. The series of data records, designed to be connected to previous blocks in the series, now contained a history of all the chains in the tree. With this addition, blockchain was born.

When Satoshi Nakamoto conceptualized the idea of a distributed blockchain that contained a secure history of all the data exchanged in the network, it gave rise to a world of possibilities that resulted in the invention of Bitcoin. What made this possible was that the security and transparency of transactions in the peer-to-peer network could be timestamped, and each transaction could be verified over the internet. The best part of the new technology was that it could be managed autonomously, and no single entity could claim absolute authority.

But what makes blockchain special?

Blockchain is a string of secured data that cannot be controlled by a single authority. The shared, immutable ledger that the connected chains of data forms has industry-disrupting capabilities for the simple reason that it is an ideal and practical democratized system.

While the information on this system is available for everyone to see and verify authenticity, it is almost impossible to alter, hence trusted. When blockchain is applied to any industry, it brings this nature of transparency with it, making it easy for countless individuals to be involved in it while maintaining accountability for every action or activity on the ledger.

Blockchain was first demonstrated to be practical and effective with the release of the Bitcoin Whitepaper, and it was quickly applied in digital currency. Soon after, the tech community found a lot many useful and practical uses of blockchain, and many more were theorized not so long later. One of the top features of blockchain that stood out almost immediately was that transactions carried out on the network carried no cost whatsoever. However, infrastructural investment was necessary to make it functional.

Benefits of global distributed ledgers

Consider the blocks of information on the blockchain as collections of data, much like records of financial accounts on a ledger. The chain, with all its benefits, is a very simple yet ingenious way to pass the data from one point to another in a secure and verifiable manner. The sender initiates the transaction, which is verified by hundreds, thousands, or even millions of computers that are part of the network.

When a block of transactions is verified, it is added to the chain and safely stored on the network, with a copy being stored on every computer on the network. The copy of the transaction will not only be unique in the record, but also in the history of records within the chain. This means that for a party on the network to alter or falsify the record, they would have to alter all the records in the chain sitting on all the computers on the network at the same time. This is almost impossible because it would take a lot of resources.

Bitcoin was a hugely successful and first virtual currency running on the oldest blockchain network because this format of storing information and conducting transactions could be trusted by all the parties in the network.

In summation, blockchain’s core benefits that make it ideal for use in cryptocurrency are:

☑️Efficiency and speed: Transactions on a blockchain can be completed much faster and more efficiently compared to the paper-heavy traditional processes that often involve a third-party. Considering that record keeping on a blockchain system is carried out on a single digital ledger available in real-time to all the peers in the network, clearing and settlement are super fast.

☑️Enhanced security: Before being recorded, transactions on a blockchain must be agreed upon aforehand. Once approved, transactions are encrypted and linked with previous and next transactions in a way that makes them tamper-proof. This is what makes blockchain ideal for use in any industry where the protection of sensitive data is crucial – from governance and financial services to healthcare and manufacturing.

☑️Great transparency: Since blockchain is essentially a digital ledger technology where all participants keep a copy of all ‘documentation,’ the data on it is not only alter-proof but also consistent and transparent. Data and transactions carried out in a transparent manner can be trusted by anyone who has access to it and can verify authenticity.

☑️Better traceability: Companies that deal in products that are manufactured and traded in complex supply chains often have a hard time tracing items in the market back to their origins to verify authenticity. With blockchain, each product can carry with it a history of transaction data that can go a long way in preventing fraud. To make this practical, manufacturers and distributors would need to record exchanges of the goods on a blockchain in such a way that an audit trail can show every stop and change of hand a product underwent.

☑️Lower costs of transactions: Every business needs to cut the costs of transactions as much as they can to increase their profits. Businesses that adopt distributed ledgers in their operations will need fewer third-parties and middlemen to make guarantees or carry out transactions since this technology builds trust between trading partners. They just need to trust the data on the blockchain to minimize the need to review every trading process or documentation.

The extent of blockchain disruption today

Make no mistake about this: blockchain is a very disruptive technology that is already revolutionizing how the world works – even if you do not ‘feel’ it yet. While you may have already heard of how it is shifting the way we use the internet and how we view money, the global economy is quickly adapting to inevitable takeover by the digitization of assets.

The fundamental shift from the present-day Internet of information to the age of distributed data as assets is a clear sign that the new global economy with no intermediaries is happening, and nobody – not even the biggest banks and multinational tech companies making money off data – can stop it.

Blockchain technology was originally developed to help solve the various economic challenges facing the financial industry. But it has proven that it can achieve much more.

It can be programmed to record and store virtually any other form of data in any industry.

As a result, we have seen the development of different types of Blockchain, each of which is aimed at helping solve more than just financial challenges. Ethereum, for instance, has smart contracts and many other applications, which we will explain later.