Wednesday, June 29, 2022

What Does Blockchain Mean For Business

Blockchain Is The Present And The Future

Inspiring hope or hype: Does blockchain finally mean business?

With many promising real-world use cases like faster cross-border payments and smart contracts, blockchain technology is here to stay.

As more companies realize how the blockchain can help them, theyll commit more resources, money, and time into the technologyand even more use cases will emerge. While we understand that blockchain technology will remain a complex topic for many, it really doesnt have to be for you.

We hope this guide gave you the confidence to have conversations with friends and acquaintances about the blockchain and that it demystified and simplified an often scary topic. Refer to it whenever you need to brush up on any blockchain concepts.

Most importantly, we hope it lit a small fire in you to learn even more about a technology thats fundamentally changing the way we trust and exchange value.

Blockchain Or Scalability Trilemma: Decentralization Security And Scalability

Most blockchain projects are built around three core properties: decentralization, scalability, and security. Developers are constantly trying to balance these aspects, so one isnt compromised.

But they often have to sacrifice one for the others. The blockchain trilemma, concept was first coined the scalability trilemma by Ethereum founder, Vitalik Buterin.

Lets look at these concepts in more detail and explore the tradeoffs:

There is, however, one significant tradeoff: speed. Sending transactions takes longer because multiple confirmations are required to validate a transaction. Hence why Bitcoin is slow.

Scalability

Scalability is the ability of the system to cope with a growing number of transactions. Scalability is crucial for mass adoption because any system needs to operate efficiently as more people use it.

Below is a rough breakdown of how many transactions Ethereum, Bitcoin, and credit card companies can process per second:

  • Bitcoin: seven per second
  • Ethereum: 30 per second
  • Credit cards: 5,000 per second with the ability to process much more if needed. Visa, for example, can process up to 24,000 transactions per second.

But achieving scalability often comes at the expense of decentralization. EOS, for example, promises a maximum of 4000 TPS but has come under criticism for being too centralized.

Security

How Does Blockchain Technology Work

In recent years, you may have noticed many businesses around the world integrating Blockchain technology. But how exactly does Blockchain technology work? Is this a significant change or a simple addition? The advancements of Blockchain are still young and have the potential to be revolutionary in the future so, lets begin demystifying this technology.

Blockchain is a combination of three leading technologies:

  • Cryptographic keys
  • A peer-to-peer network containing a shared ledger
  • A means of computing, to store the transactions and records of the network
  • Cryptography keys consist of two keys Private key and Public key. These keys help in performing successful transactions between two parties. Each individual has these two keys, which they use to produce a secure digital identity reference. This secured identity is the most important aspect of Blockchain technology. In the world of cryptocurrency, this identity is referred to as digital signature and is used for authorizing and controlling transactions.

    FREE Course: Blockchain Developer

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    What Is Blockchain 20 And What Does It Mean For You

    Since the blockchain was launched in 2008, no other technology has been subject to much debate, criticism, and enthusiasm. Even if you fall into the critical category, blockchain and cryptocurrencies impressive rise and adoption cannot be disregarded. In 2021, a growing number of small, medium, and international businesses accept cryptocurrency payments for goods and services. Microsoft, Whole Foods, Starbucks, and a significant number of airlines accept bitcoin and other cryptos as a form of payment.

    Blockchain has also been presented as a solution to many business issues, including preventing fraud, authentication, supply chain management, and the automatization of processes. While uptake is mainly limited to more prominent companies, figures show that many are considering blockchain solutions and are ready to invest.

    We are transitioning between Blockchain 1.0 and Blockchain 2.0. This will see further development of the technology and the prominence of business applications built on the blockchain. Potentially, these technologies could knock blockchain-based payment apps off their perch. We will also see tech companies expanding their offerings up the technology chain, creating more blockchain-based tools and platforms. This will result in the deployment of technologies becoming less expensive or complex, thus encouraging more companies to get involved.

    How Are Transactions Confirmed On The Blockchain

    An Explanation of Blockchain For Non

    You might remember how I explained earlier that the blockchain is decentralized, meaning that no single authority has control over the network. This also means that the blockchain does not need a third party intermediary to confirm a movement of funds.

    If thats the case, how are transactions confirmed? This is where things get really interesting!

    The blockchain is a community-based platform, meaning that in most cases, anybody can contribute to the network to help verify transactions. They do so by contributing their computational power, which in return, is able to support the network.

    Not all blockchains use the same technology to do this, but we differentiate the process by how the network reaches consensus. Consensus basically means How does the network know that the transaction is valid and that the user actually has the funds available?

    Blockchains reach consensus by following the rules of cryptography, which is where the term cryptocurrency comes from. Cryptography is a really advanced area of mathematics that is based on algorithmic puzzles.

    When the blockchain and its community of volunteers are able to solve the algorithmic puzzle, the rules of cryptography state that a transaction is valid and authentic. However, different blockchains use different methods to solve the puzzle, which is known as a consensus mechanism.

    Confused? Dont be, as my What is blockchain guide is now going to give you an example!

    • PoS
    • DPoS
    • PBFT
    • DAG

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    What Is Blockchain And What Does It Mean For Your Business

    Read time: 6 minutes

    The technology behind Bitcoin has the potential to revolutionize how business is conducted. Its called blockchain, and theres a race on to develop applications for it across a wide array of industries.

    BDC senior economist Gillian Elias answers 5 common questions about blockchain and how it can impact doing business.

    The Distributed Ledger Technology Has Enormous Potential For Firms That Figure Out How Best To Use It

    Blockchain sounds like a way to keep boats anchored, which isn’t a bad analogy, considering what the technology purports to do.

    While some IT experts herald it as a groundbreaking way of creating a distributed, unchangeable record of transactions, others question the nascent technology’s usefulness in the enterprise, which has traditionally relied on centrally-administered databases to secure digital records.

    Even so, companies are moving fast to try and figure out how they can use it to save time and money. And IT vendors are responding to customers calls for info, with some already looking to include it as part of their services.

    What is blockchain? First and foremost, Blockchain is a public electronic ledger — similar to a relational database — that can be openly shared among disparate users and that creates an unchangeable record of their transactions, each one time-stamped and linked to the previous one.

    Each digital record or transaction in the thread is called a block , and it allows either an open or controlled set of users to participate in the electronic ledger. Each block is linked to a specific participant.

    Blockchain can only be updated by consensus between participants in the system, and when new data is entered, it can never be erased. The blockchain contains a true and verifiable record of each and every transaction ever made in the system.

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    What Is A Blockchain Transaction

    What sets blockchain apart from other online transaction types is that the data is replicated, stored and verified across several nodes, rather than held by one central authority. When a user requests a transaction, the details of that transaction are broadcast to all those nodes in a peer-to-peer fashion. This prevents anyone from stopping or censoring the transactions by certain individuals. Each node then verifies that the transaction is valid and communicates with one another whether the transaction is confirmed.

    Once confirmed, the transaction is transparent and permanent, and at any point any user of the system can query these transactions, eliminating the need to trust a central authority .

    Blockchain transactions are not limited to the transfer of digital currency novel applications of blockchain technology are made possible via smart contracts . These smart contracts can facilitate a wide array of transactions such as domain name registries, asset exchanges, lending, insurance, gaming and social networks, to name a few.

    Just What Kind Of An Impact Will Blockchain Have On Businesses And Can It Also Be Used As A Tool To Secure The Iot

    .@Nasdaq #TradeTalks: Making Blockchain Pervasive What Does it Mean for Your Life & Business @P…

    Blockchain continues to enter into the mainstream business market at a fast pace, while moving into other industries outside of the financial services and banking industries. In addition to core business applications, blockchain is also being explored as a possible security solution for the broken and unsecure connected devices and IoT market space. But I wanted to look at blockchain from a business aspect, and explore how its expected to impact businesses, as well as emerging as a tool to secure the Internet of Things.

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    What Does Blockchain Mean For Business

    Weve heard that Blockchain will reshape entire industries like financial services, healthcare, transport and logistics. But looking beyond the hype, what are the real-world business benefits of the technology? And where should Blockchain sit in the great big digital transformation journey?

    The reality is that, like many technologies, Blockchain is still a long ways from widespread adoption. But on the other hand, its probably still a lot closer than many businesses may think. Especially the 77% majority of CIOs that say they have no interest whatsoever in the technology.

    By 2026, the business value added to the economy by blockchain will be a staggering $360 billion. Four years after that, itll be more than $3 trillion. And its the companies that are investing in Blockchain tech today that will reap those benefits tomorrow. While others will be stuck wondering how they fell so far behind. So, businesses need to start planning and piloting the technology today if they want to keep competetive tomorrow.

    What Is A Cryptocurrency

    A cryptocurrency is a form of digital currency that can be used to verify the transfer of assets, control the addition of new units, and secure financial transactions using cryptography.

    One of the cryptocurrencies most important advantages over normal currencies is that they are not controlled by any central authority. Without a central point of failure or a vault, the funds cannot be hacked or stolen.

    As an analogy, think of the popular Microsoft Excel spreadsheet program. You can make changes to the data on your own that may differ from earlier versions of the spreadsheet that are shared with others. But if you make changes to a Google Sheets document, on the other hand, those changes also show up in every other shared copy. Similarly, the shared and distributed nature of cryptocurrencies keeps everyone on the same page.

    Therefore, the transparency and distributed nature of blockchain technology are what make cryptocurrencies secure.

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    How Can Blockchain Be Used In The Real World

    In reality, blockchain technology could be used in practically every industry or sector. By replacing centralized servers with that of a decentralized blockchain, individuals, companies and even governments could benefit from all of the advantages that the blockchain offers, such as security, transparency, and speed!

    I am afraid I cant go through every single industry that the blockchain could be used for, so I will list five of my favorites!

    Ibm Perspective & Supply Chain Management

    Blockchain

    One of the most leading use cases for blockchain in business is supply chain management or tracking goods and services as they move from point A to point B. According to IBM:

    Blockchain is already making a difference across a range of industries. For example, U.S. retailers Walmart and food and drink giant Nestlé are deploying the technology to create greater transparency around their food supply chains in order to reduce the risk of foodborne diseases. And Everledger is using Blockchain to help businesses to track the provenance of a diamond throughout its supply chain, tackling unethical miners and dealers. The potential applications are manifold and exciting.

    IBM also notes that several blockchain consortiums are being formed, and this may be where businesses can learn, explore, and get involved.

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    Wait Didnt Millennials Kill The Diamond Industry

    Diamonds are just one thing millennials have purportedly killed, along with Applebees, napkins, mayonnaise, the housing market and countless others. Of course, millennials havent actually killed any of those things. According to the De Beers Diamond Insight Report, they make up 27% of the population but 41% of all diamond jewelry sales. Making up a large percentage of these purchases are engagement and wedding rings, which are practically synonymous with diamonds. Look no further than this Google search for engagement rings:

    Blockchain has potential to elevate the diamond industry in these consumers eyes. More than previous generations, millennials are socially-conscious shoppers concerned with a brands values. Laryssa Wirstiuk, who owns Joy Joya, a digital marketing agency for jewelry brands, adds that theyre also less trusting of institutions.

    The Kimberley Process was put into place to do the job that blockchain is doing now, she says. The problem is, the Kimberley Process relies on local governments. Millennials have more trust in something technology-based.

    In 2003, the United Nations General Assembly pioneered the Kimberley Process Certification Scheme to authenticate diamonds and declare them conflict-free. Its had demonstrable success but also applies to batches of diamonds, rather than individual stones. This eliminates some of the transparency blockchain promises.

    How Do You Use It

    Blockchain runs on specialised computer software that operates behind the scenes, automatically distributing information to the database as new transactions are made. Most individual users will not see a blockchain performing and this instantaneous nature means there is little to no window of time for someone to alter a transaction before it is recorded on to the ledger. Blockchain software is an area of experimentation and in June, a market assessment estimated that $1bn would be invested in blockchain technology in 2016 alone.

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    Limitations Of Centralized Systems

    If you notice the digital worlds typical software aspect, youll see that most of those are based on a centralized structure. Typically its not because the architecture is really easy to maintain and develop. Its because everyone is used to trusting other parties to safeguard their information.

    Moreover, we depend on other parties that they arent cheating or scamming us with their products. In reality, you wouldnt probably work with anyone you didnt previously have any business with.

    So, it becomes exceptionally hard to scale up or trade with someone without any prior business relationship.

    Let us explain it with an example. Suppose that you ordered something through Amazon, but you feel assured that you are going to get the delivery, dont you? However, in reality, Amazon isnt the one thats producing the item its someone else.

    Sometimes even other third parties sell those items. So, Amazon works as a buffer between that third party and yourself. Even though you may not know about them, but you will still trust them because of the Amazon tag.

    However, what blockchain definition defines here is the need for the third party for establishing trust. With blockchain, you wont need any third party you can directly work with other businesses with full assurance even though you dont trust them.

    Thus, in a typical centralized system, there are many flaws, including:

    Advantages of Blockchain over Typical Centralized System

    How Does Cryptocurrency Work

    What Facebook’s Meta plans mean for digital currencies and blockchain

    To date, there are roughly 6,700 cryptocurrencies in the world that have a total market cap around $1.6 trillion, with Bitcoin holding a majority of the value. These tokens have become incredibly popular over the last few years, with one Bitcoin equaling $60,000. Here are some of the main reasons why everyone is suddenly taking notice of cryptocurrencies:

    • Blockchains security makes theft much harder since each cryptocurrency has its own irrefutable identifiable number that is attached to one owner.
    • Crypto reduces the need for individualized currencies and central banks- With blockchain, crypto can be sent to anywhere and anyone in the world without the need for currency exchanging or without interference from central banks.
    • Cryptocurrencies can make some people rich- Speculators have been driving up the price of crypto, especially Bitcoin, helping some early adopters to become billionaires. Whether this is actually a positive has yet to be seen, as some retractors believe that speculators do not have the long-term benefits of crypto in mind.
    • More and more large corporations are coming around to the idea of a blockchain-based digital currency for payments. In February 2021, Tesla famously announced that it would invest $1.5 billion into Bitcoin and accept it as payment for their cars.

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    Why Will Blockchain Transform The Global Economy

    Similar to how the internet changed the world by providing greater access to information, blockchain is poised to change how people do business by offering trust. By design, anything recorded on a blockchain cannot be altered, and there are records of where each asset has been. So, while participants in a business network might not be able to trust each other, they can trust the blockchain. The benefits of blockchain for business are numerous, including reduced time , decreased costs and alleviated risk .

    For all the ways blockchain is already being used in business, there are untold more that havent been discovered. Learn more about IBM Blockchain and possible applications for your business. Also, be sure to sign up for the developerWorks newsletter and join the community to stay up to date on exciting blockchain developments:

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