Important points of Blockchain

Blockchain is a database gets distributed among all nodes and no or any nodes has the ability to control the Blockchain. All the nodes have to take validation for a transaction. All communication on the Blockchain is p2p. Also, all the transactions taking place on a Blockchain are being recorded there, therefore, the transactions of any user using the network is public and transparent. Once a transaction is being recorded on the Blockchain and then it has been updated, it becomes difficult to alter the transaction. No body or even any organization can turn off a Blockchain. Though a Blockchain is decentralized architecturally but is logically centralized.

Three major factors of Blockchain Technology

The three factors that have made Blockchain technology a boon in every Industry are as follows:

Decentralization Transparency Immutability

Decentralization

The time when bitcoin and BitTorrent were not in a picture and everyone were into centralized services. The idea behind it is simple. A centralized entity which stores all the data and a person has to interact with this entity in order to avail information required. The biggest example of centralized services is the banks as they keep all your money and the only way to pay someone is by visiting the bank. The traditional client-server model is the perfect example.

Whenever you search something on Google, you are sending a query to the server who then gets back to you with the required information, called client-server. Since, centralized services have been fruitful for years but it does have its share of drawbacks which are as follows:

The first point is that they are centralized and all the data is stored at one place making it easy for hackers to target. In case, if the centralized system had to go through a software upgrade, it would have been halt the system.

If somehow centralized entity gets shut down than no body will be able to access the information that it has.

If talking about the worst scenario, the entity gets corrupted and malicious, all the data inside the Blockchain will be compromised.

Coming back to the decentralized system, information is not stored by one single entity, instead information is owned by everyone in the network. Also, if you want to interact with your friend, you don’t have to involve a third party for this. This was the main idea behind Bitcoins as you are the only chargeable person of your money. You have the full authority to anyone without the need of going through a bank.

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Factor – 2 Transparency

The major and intriguing concept in Blockchain is considered transparency as a few people say that Blockchain provides privacy while other says that it is transparent. Though a person’s identity is kept hidden through complex cryptography and shown by their public address. Therefore, if the real identity of a person is secured, you are still able to see all the transactions that were done by their public address. This level of transparency has never seen in past within a financial system. It also added another level of accountability that is required by the biggest institutions.

Talking from the cryptocurrency point of view, if you have the public address of any of the big companies, you can see it in an explorer and can see all the transactions.

Factor 3 – Immutability

Immutability, in the context of the blockchain, means that once something has been entered into the blockchain, it cannot be tampered with.

When it comes in the context of Blockchain, Immutability means something is into the Blockchain which can’t be tampered. The reason why the Blockchain gets this is because of the cryptographic hash function. In a simpler language, hashing represents taking an input string of any length and giving output of a fixed length. In the terms of cryptocurrencies such as Bitcoin, the transactions are considered as input and go through a hashing algorithm that gives an output of a fixed length.

Blockchain is also considered as a linked list that has data and a hash pointer that carries out the previous block and creating the chain. A hash pointer is same as pointer, but it contains the address of the previous block and the hash of the data inside the previous block. This what makes Blockchain seems reliable and trailblazing.

Use of Blockchain

Blockchain is similar to what known as smart contracts. Smart contracts tells the rules and penalties of a specific agreement like traditional contracts do. Though this big difference is that smart contracts forwards thee obligations. The contracts are in coding form, discharging them to fulfil the specific criteria.

A warranty claim

Usually settling warranty claims is expensive, time-consuming and often difficult for those making the claim. It is possible to implement smart contracts using Blockchain that will inevitably make the process a lot easier.

In the previous time when claim was made, all checks would be seen by humans that can be time-consuming and show signs of human error. Hence, it became unnecessary to be sure that all criteria has been fulfilled and is done using the Blockchain. When all the obligations are fulfilled, the final payout is automatic which can done via minimum human involvement.

One such solution was catered by Deloitte – the inclusion of a QR-code in a receipt. The QR-code contains all the relevant information related to purchase- item, serial number, date of purchase. With it, the QR-code has its instructions on a way to find a ‘warranty bot’ on Facebook messenger. Later on, a user will send a picture of the receipt to that bot and the engine unwraps the QR-code and keeps all the product information on the Blockchain.

Derivatives

We know that derivatives are being used in stock exchanges and are concerned with assets. When it comes to smart contracts in the world of trading of stocks and shares , it could change present practices by streamlining , automating and cutting the cost of derivatives trading across the industry.

Settlement could be finished in a few seconds instead three days that are required. Through smart contracts, peer-to-peer trading is going to be a usual operation that would result in a complete revolution in stock trading. Companies like Barclays has already done a way of trading derivatives through smart contracts and also, conclusion came out that the technology will not be in working environment unless banks want to get in collaboration to execute it.

Insurance claims

Having smart contracts lead to creating criteria for specific insurance-related situations. In theoretical language, by having Blockchain technology, you can submit your insurance claim online and get an instant automatic payout. Provided all the claims should meet all the required criteria. AXA , a French insurance giant is the first insurance group to provide insurance via Blockchain technology. They also have recently launched a new flight-delay insurance product that will use smart contracts in order to store and access payouts. It is to be believed that other insurance companies are surely going to follow suit.

Identity verification

It is true that time and effort is getting wasted on identity verification these days. With the Blockchain decentralization, the online identity verification will be faster. As online identity data being in a centre location would vanish with Blockchain smart contracts. All computer hackers will have no access to centralized points of vulnerability to attack.

Data storage is also considered tamper-proof and incorruptible when worked with Blockchain. Blockchain is leading towards big improvements in the identity verification. The Zug city in Switzerland has a decentralized application (DAPP) for electronic identity verification of its citizens. Also, the other producer of DAPP is Oraclize in Estonia for identity verification. It uses a DAPP to solve the KYC (Know Your Customer) issue and it is considered as a major identity verification. The organization Thomson Reuters is creating new DAPP for verification via using Ethereum.

The Internet of Things (IoT)

The Internet of Things also called IoT is a place where the network of all physical devices, vehicles and other items are integrated with software, actuators, sensors, software and network connectivity and Internet connecting. Having all these features allow such objects to collect and exchange data. And, Blockchain and its smart contracts are ideal for this.

Projects that involve smart contracts for devices have already been predicted to become common soon. Also, the world’s leading IT research company, Gartner made the prediction that the time we will get till 2020, at least 20 bIn connected devices would have exist at that time. All these devices are using Ethereum smart contracts. For instance – having Ethereum lightbulb, the Ethereum Block charge has charging of electric vehicles and CryptoSeal which is a tamper-proof seal for drug safety.

Blockchain is going to a major role in the introduction of IoT and it will also provide numerous ways of protection against hackers. Since it is built for decentralized control, a security scheme is based on it should be scalable to take into consideration the rapid growth of the IoT. In addition to that, Block chain’s protection against data tampering is going to help prevent a rouge device from disrupting a home, factor or transportation system by communicating misleading information.

Archiving and file storage

Giants such as Google Drive, Dropbox have developed the archiving of documents via using centralized methods. Centralized sites are always seem attractive to hackers. Blockchain and its smart contracts find ways of reducing threat substantially. There are numerous Blockchain projects that aim to do this. One should know that there is not enough storage within Blockchain themselves but they have decentralized cloud storage solutions such as Stori, Sia, Ethereum Swarm. Talking about from user’s view, they work like any other cloud storage. The major thing is that the content is hosted on many unidentified users computers , instead of data centres.

The protection of intellectual property

Archiving was allowed by Blockchain offers protection of intellectual property compared to before. Ascribe with the help of Blockchain gives the protection.

Crime

Lawbreakers can hide the money they gained from their exploits. At present, all it is done through fake bank accounts, gambling and offshore companies. Though many concerns related to transparency of cryptocurrency transactions are gained. But all the required regulatory elements, such as identifying parties and information, records of transactions and enforcement can exist in the cryptocurrency system. Since the technology is getting mainstream attention, Blockchain and its smart contracts have the potential to reduce money laundering tactics traceable.

Social media

In the present time, social media giants can use the personal data of their clients that is helping them making billions of dollars. With Blockchain smart contracts, social media users will enable them to sell their personal data if they need. All such ideas are being investigated at MIT. The aim behind OPENPDS/SA project is to cater the data-owner to reflect the degree of privacy preservation through the Blockchain technology.

The use of smart contracts in elections and polls

It is also true that elections and polls could literally be improved with smart contracts. Though there already are a few apps such as Blockchain Voting Machine, My Vote and TIVI. All these apps promised to eradicate fraud and serving complete transparency to the results and keeping the votes unidentified. Though there is a long way before making decentralized voting in working condition.

Benefits of using Blockchain

Decentralized

The intriguing aspect of the Blockchain is decentralization. Blockchain system is decentralized that means it is not possible for overthrowing authority to control the network. Decentralization not only comes with a fair system of distribution but also with security.

Peer-to-peer (P2P) network

Since information gets exchanged and recorded everything among network participants, the network has become stronger with an increase in number of participants. A p2p network is considered as an integral part of Blockchain technology. Peer refers to the computer system in the Blockchain network. In the network, user uses network’s foundation and each peer is called a node and considered equal. A peer caters other users with resources such as bandwidth, processing speed and disk storage without any central coordination on any server.

Though nodes are equal and each has different role of a full node as a miner. Talking about a full node, the complete Blockchain would be copied into a single device in the connected network meaning that Blockchain data can not be destroyed or lost as it involve s destroying every full node in the network. The best benefit of Blockchain is that till its node exists, information or records are undamaged making it easier to recreate the network.

Security/immutability.

When every block gets sealed cryptographically, it becomes difficult to copy, delete or edit ensuring the immutability of the digital ledger. because of the decentralisation of networks, there would be no central points of error or failure in the system. Having absence of weak points in the system for hacking, there are null chances of malicious that boots the network’s reliability. Every transaction has the digital signature via both private and public keys that use different cryptographic schemes making sure about the complete encryption.

Open source:

Being an open source software, Blockchain has reduced entry barriers that lead to robust developer base and transparency. Open source software is shared freely, transparent , published for the community good instead of being a single organization having an aim of no profit. Well, no single individual or a company creates, sells or owns the software that removes all bottlenecks in the open source software development process.

Trust

Since the user’s identity remains confidential, therefore, every one can work freely with the secure network. Transaction security is the top advantage of Blockchain technology. It is important for users to maintain privacy and unidentified for numerous reasons. With every transaction on centralized networks, the address is given including the details of the user can be easily found out by hackers. Blockchain protects addresses in a given wallet by changing addresses constantly making it difficult for payments or transactions to be traced.

Ease of use

Having excellent integration capabilities, Blockchain holds the advantage of accessible and fast. Also the flow of data or money is instant because of the absence of third-party. Talking about traditional banks, transactions of huge volume takes many days to finish owing different protocols or transferring software. Financial institutions have working hours while other transactions can’t be done on holidays in a few countries. On the other hand, Blockchain is functional on a daily basis meaning that at any day or time, transactions could be made quickly and safely.

Transparency

It is now possible for users to verify and track transactions in the public and decentralized ledger. Anyone can see the record of transactions and the software being an open source makes any kind of alteration of data hard. Having many eyes glued to the network, any kind of alteration in the logged data can be seen that adds to the transparency and security of Blockchain. Being a revolutionary technology, it creates disruption and the impact of Blockchain can be seen across the globe and in all sectors that include consumers, governments, private industries and communities.

Blockchain industry is slowly taking pace in every industry and if you want to get information related to new updates about the Blockchain technology, you can always reach out to the team members who are always there to handle all worries. You can always call them anytime via calling on Blockchain toll-free number which is always functional and the team is there to help you out at every step. You can connect with the team members anytime to handle all troubles in the fraction of time. Talk to the team executives to handle all Blockchain troubles and issues.

Common issues related to Blockchain

Blockchain comes with an environmental cost

Blockchain depends on encryption to serve security along with establish consensus through a distributed network, meaning that to prove that a user has permission to write down to the chain, complex algorithms that requires amount of computing power. The most relevant example is Bitcoin, previously it was claimed that the computing power needed to keep the network running has much use of energy compared to energy used by 150 countries of the world.

Bitcoin’s Blockchain has a valuable network having a current market capacity at the time of maintain over $170 billion. Also, small scale blockchains – organisation that might deploy internally to secure monitoring and recording business activity that would consume a fraction of that. Also, it is an important consideration and the environmental implications along with the energy’s cost can’t be ignored.

Lack of regulation creates a risky environment

A major issue with Blockchain or other Blockchain-based network comes into an existence. But the major fact is that many are investing in Bitcoin or in other cryptocurrencies for the first time in a few months have found their cost, it is a volatile environment.

C. Difficult to find the benefits

Once revolutionary applications made effort to know the principles of encryption and distributed ledgering behind Blockchain, though it took a while before the man on the street could find out the potential of Blockchain. Big techies talk about the swapping of the middle-men requirements given by the financial services industry – like clearing payments and fraud prevention. But as concerned, banks has this service at low cost to the end user.

There is no coincidence that the first Blockchain-bitcoin has entered public vision after the financial crisis of 2008, when media and public showed disinterest and dissatisfaction with established financial institutions and instruments.

Blockchain can be slow and cumbersome

Because of their complexity and encrypt nature, Blockchain process takes a little time compared to traditional payment methods such as cash or debit cards. Bitcoin transactions might take a few hours to takes place, meaning that there are many issues that you might use them to pay for a cup of coffee during the launch hour unless the vendor is ready to take an element of risk.

In the theory part, the aim is to extend to Blockchain networks used for something else other than store of value. For instance – logging transactions or interactions in and IoT environment. All these chains are just computer files and have the potential to become slow as they grow in size and also the number of computers accessing and writing to the network enhance. Hoping that this would get solved with advancement in engineering and processing speeds.

Having a huge interest in adopting Blockchain technology from the financial industry, the context said about it is that it would be normal if it gets disappeared. Banks are making huge amounts of profit ranging from playing the mid role and due to the cost distribution among many customers leading to pay less per individual.

Blockchain Industry slowly making its reign in every industry and is quite useful as it eliminates the role of third-party and shows complete transparency. If you want to know more about the Blockchain technology, you can always contact the team anytime via Blockchain toll-free number which is always functional and the team is always ready to help you at every step