Monday, August 15, 2022

What Problem Does Blockchain Solve

How Do You Solve Byzantine Generals Problem

Which problem does a blockchain solve?

The problem can be solved by implementing a protocol that employs fault-tolerant mechanisms. When faced with uncertainty, adopting a procedure among the generals is the best method to make choices.

As a result, it becomes probabilistic rather than deterministic because nothing can be guaranteed. That is precisely the case when there is less direct communication among peers, and each is self-contained. Because each general is in a different place, there is a physical separation between them.

The Power Of A Ledger

The first known ledgers date back some 5,000 to 10,000 years to Mesopotamia, where simple clay tokens and stone tablets were used as markers of transactions.2 They were a centralized form of record keeping that helped people keep track of things like the price of barley, who bought the barley from whom, or who owned or purchased a piece of land.3

Over time, such ledgers formed the basis of wide-scale economic development and activity. They allowed people to gauge who could be trusted, leading to the emergence of reputation, credit, and long-distance trade. Moreover, they helped resolve disputes about goods sold and money owed.

Can Blockchain Unblock Supply Chain

Blockchain technology is no doubt a disruptive innovation that has the potential to rewrite the books of supply chain management as we have known it, but like all technology hype, it is important that supply chain professionals dont consider this as a panacea for all their supply chain problems.

Blockchain technology has a place in complex supply chains but the ecosystem maturity is a pre-requisite for any investment in the technology, and the success of the solution will heavily depend on the problem faced by the whole ecosystem rather than one player . It is important that the players in the ecosystem align on the problem to be solved to ensure that there is focus on the solution that emerges.

Needless to say, the investment in these ecosystems are most readily accepted if they come from a neutral party rather than one involved in the supply chain and this is where the governments, economic development boards and banking groups can play a role.

Leading experts are predicting the Blockchain technology adoption to be in the following manner: early adoption during 2016-2017 Growth during 2018-2024 and Maturity from 2025 and beyond. It is important for leading supply chain strategists to form a POV on the applicability of the Blockchain technology to their own supply chain from a strategy perspective.

Can Blockchain unblock Supply Chain?

Originally published on Supply Chain Game Changer on March 20, 2019.

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Blockchain Prevents Piracy And Copyright Issues

Blockchain offers a very fulfilling way to prove ownership and to trace the utilization of a copyrighted work online. As piracy is one of the major concerns, with the help of blockchain, the creator/artists can safely put their content on immutable ledgers. This will help them to understand once a copyright infringement occurs, and thus, take legal proceedings. It offers transparent real-time tracking, thus records every time the content gets accessed. Furthermore, the technology aims to facilitate the payment of the right artists through cryptocurrencies.

How Blockchain Is Solving The Problem Of Double

What Problems Will You Solve With Blockchain?

The Blockchain technology is gaining popularity and getting worldwide acceptance. Blockchain-aided cryptocurrencies have revolutionized the usage of digital currency. Undeniably, cryptocurrencies have gained global recognition it is redefining the way we use the money, and slowly the world is moving towards digital currency.

There are various places where we make the use of digital currency but with many benefits of digital currency there are some major disadvantages and double spending is one of them. Well, in this blog, I will be highlighting on double spending and how Blockchain is solving this problem.

Before heading further to understand how Blockchain solved the problem of double spending, here is a brief overview of what is double spending.

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What Problem Does High Performance Blockchain Solve

Many blockchain networks have been plagued with low transaction speeds and excessive latency, preventing widespread practical adoption by businesses and consumers. HPB seeks to solve this problem by creating a platform that is designed to handle millions of transactions per second in a robust and secure system. By combining hardware and software architecture, HPB will be able to provide a platform that is far superior to those that are currently available. This will be essential in order to meet the needs of businesses and enable true blockchain adoption.

What Supply Chain Management Problem Does This Solve

The biggest problem in the transitional supply chain is lack of open and trustworthy information availability across the supply chain caused by multiple issues trust, technology and legacy practices being the top ones. Can Blockchain unblock Supply Chain?

As mentioned in the summary A typical supply chain is a series of bilateral contractual links that are put next to each other to form a supply chain and every link in the supply chain is a bottleneck for information flow, trust erosion and technology gaps. The gaps prolong the supply chain cycle, increase the extended supply chain cost due to assumed risk in every link and result in an overall disconnected supply chain from an end-users perspective.

The Blockchain technology has the potential to tackle these key gaps through the use of the open permissioned ledger system which creates an eco-system where information flows openly albeit in a permissioned manner, reduces the assumed risk in the supply chain and hence reduces the total cost of the supply chain while making the supply chain more agile and adaptive.

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The 5 Big Problems With Blockchain Everyone Should Be Aware Of

2 July 2021

Blockchain is often touted as a world-changing technology and in many ways, it is. However, it isnt necessarily the cure-all panacea for the worlds problems that many evangelists would have you believe.

Heres a breakdown of some of the issues with blockchain that anyone thinking of using it should understand. Starting with perhaps the biggest

1. Blockchain has an environmental cost

At least, the way it is being used today, it does. Blockchain relies on encryption to provide its security as well as establish consensus over a distributed network. This essentially means that, in order to prove that a user has permission to write to the chain, complex algorithms must be run, which in turn require large amounts of computing power. Of course, this comes at a cost. Taking the most widely known and used blockchain as an example Bitcoin last year it was claimed that the computing power required to keep the network running consumes as much energy as was used by 159 of the worlds nations.

2. Lack of regulation creates a risky environment

Even if, as a speculative investor in cryptocurrencies, you choose to stick to the relatively established coins such as Bitcoin, Litecoin or Ether, there is always a chance that the exchange or online wallet where you keep your coins will be hacked, shut down by governments due to shady practices, or simply abscond with your coins. Again, this is a consequence of the lack of regulatory oversight across the sector.

What Is Blockchain And How Does It Work

Which Art Problems can Blockchain Solve?

If you’re interested in technology, there’s a good chance youve probably heard the terms Bitcoin, Crypto, Ethereum, or even “distributed, decentralized ledgers.”

Youve probably heard people talk about cryptocurrency and encryption algorithms, about the end of “intermediaries” and so on.

It’s easy to assume that cryptocurrency are the same as blockchain. They’re not.

Cryptocurrencies are a clever application of a much cleverer technology the Blockchain.

In this post, I will cover some of the basic concepts of the blockchain so you understand what it is, how it must be conceptualized, and what can be built on top of it.

But as with all things, they make more sense if you understand why they were invented, before you get into what they do. That context will help you grasp what problem the blockchain was designed to solve.

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Agents Of Change In A Small Dutch Town

They knew nothing about the blockchain yet in Zuidhorn, a town with just under 8,000 people in the north-east of the Netherlands.

What we did know is that its coming for us and that its disruptive, a civil servant from the town told a Dutch weekly news magazine. We could sit back and wait, or choose to move forwards.

In Zuidhorn they decided to move forwards. A municipal poverty aid package for children would be put on the blockchain. Maarten Velthuijs, a student and blockchain enthusiast, was given an internship with the municipality.

His first job was to explain what blockchain is. When I asked him, he said it is a kind of system that cant be stopped, that its actually a force of nature, or rather, a decentralised consensus algorithm. OK, its hard to explain, he conceded eventually. I said to Zuidhorn: Ill just build you an app, then youll understand.

So he did.

His first job was to explain what blockchain is … OK, its hard to explain, he conceded eventually

The childrens aid package gives families living in poverty the right to a bicycle, trips to the theatre and the cinema, and so on. In the past, that was a nightmare of bureaucracy, receipts and documentation. But thanks to Velthuijss app it became simple: you scan your code in the shop, you get your bike, and the shopkeeper gets their money.

How Blockchain Is Solving Problems In The Financial Sector

    Something that moves 20% overnight does not feel like a currency. It is a vehicle to perpetrate fraud.” Lloyd Blankfein, senior chairman of Goldman Sachs, made this infamous statement about Bitcoin in 2017. The cryptocurrencys success hasnt swayed him much. Recently, he told CNBC, If I were a regulator, I would be hyperventilating at the success and arming myself to deal with it.

    These misgivings about crypto and DeFi are not entirely unfounded. Frauds and hacks within the DeFi space amounted to $240.4 million between January and April of 2021.

    While no one can argue about the volatility of crypto, theres much more to blockchain technology than opportunistic investments goneawry. Institutions in the financial sector are fast adopting blockchain and distributed ledger technology.

    An IBM report suggests that 91% of banks had invested in blockchain solutions by 2018 and the growing adoption rate points to an expected normalisation of blockchain usage in the financial sector.

    Blockchain can easily help carry out financial services. Payments, self-executing contracts and manual processes like compliance and claims become swift and secure with this tech. Distributed ledger technology can promote better governance around data sharing.

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    Why Do We Need Blockchain

    The internet has sped up the pace of trade while also significantly increasing the volume. Weâve established that when this happens, the old system breaks down and is replaced by a new one. So, how is the old system breaking down?

    First, current standards of bookkeeping arenât enough to police the bookkeeper. In 2007, Lehman Brothers reported $4.2 billion in profit and then declared bankruptcy less than 12 months later. How is that possible? They lied about their books. They moved debt and losses around to paint a rosy picture of their business. It worked for years, before the piper called for payment.

    Second, centralized systems are too easily compromised. Major centralized institutions get hacked so frequently that I can say with absolute certainty that your personal, private information is public on the internet. Don’t believe me? Check for yourself.

    All that is to say, we’re at yet another inflection point in the history of exchange where the old system doesn’t work anymore. The volume of exchange is too high while the pace of exchange is too fast and where you place your trust is in question.

    Can you trust that your bank is doing everything possible to prevent your account getting hacked?

    In short, no.

    Additionally, the stakes are so high and the amount of information so large that the incentive for shady behavior becomes high while the odds of getting caught are relatively low.

    Financial Institutions Can Reduce Costs With Blockchain Technology

    What Problems Does Blockchain Solve?

    Multi-layered, centralized financial institutions invest heavily in purchasing, maintaining and securing central databases. Added to that are other recurring costs like bookkeeping, value transfer systems, commissions and labor.

    According to a Finextra study, DLT can reduce these overhead costs by $15 – $20 billion per year by 2022. In the process, DLT can also increase transparency and ensure security. Banks can implement smart contracts to reduce costs of commissions to intermediaries, value transfers and bookkeeping.

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    Issue #2 Data Corruption

    Besides data loss due to hard drive or connectivity corruption, there may be sporadic issues that are usually difficult to diagnose.

    Its like you play an audio CD, and theres a bit of missing/corrupted data owing to a scratch. The music player often detects that and interpolates the data to bush fix the missing notes. But when it comes to complex life-critical systems, its nearly impossible to fudge a problem just like a CD player does.

    Blockchain addresses such issues effortlessly: if it bumps into a data mismatch in the transaction ledger shared between two parties, it stops, and no block update requests can distribute across the network after this. For example, this blockchain feature prevents double-spending cryptocurrency cant be transferred more than once.

    Blockchain In Supply Chain

    Blockchain can be implemented to many challenges of the Supply Chain industry, such as complicated record-keeping and tracking of products, to produce a less corruptible and better-automated alternative to centralized databases.

    The product history, right from its origination to its present time, can be outlined in the blockchain. Also, this type of accurate provenance tracking can be used to encounter fraud in any part of the supply chain. Moreover, the real-time monitoring of a product in a supply chain with the help of blockchain can cut-down the overall cost of moving items in a supply chain.

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    Helps Store Patient Generated Health Data From Wearable Devices

    Today, wearable devices backed by IoT technology are moving basic healthcare services to the home. Fitbit, for Instance, is very popular brand to millions of Americans given its ability to track physical activity, sleep, and heart rate parameters. Sensara is a remote monitoring system and an app that uses small sensors to keep an eye on elderly family members tracking their physical activity, sleep, and other events.

    Goode Intelligence forecasts that by 2019 there will be 5.5 billion users of mobile and wearable biometric technology around the globe. Thats unprecedented technology penetration.

    But, the massive data that these wearables and home based medical devices generate is typically streamed to the cloud personal use and not available to physicians. Even in cases, where monitoring data is transmitted to a specialist for a particular condition, it is not being fully leveraged by all your care providers.

    Besides, wearables and home medical devices have security vulnerabilities that would pose a serious threat to hacking of a patients sensitive health data.

    One can fix all these problems with the use of blockchain-enabled wearables and home medical devices.

    For example, the use of blockchain could link every wearable device to a patient data hub with all of the patients health records to allow physicians a single distributed view of information in real time.

    What Does Disintermediation Mean Will Intermediaries Like Banks Disappear In The New Scheme Of Things

    Can Blockchain Solve Its Scalability Problem?

    No, not at all. Intermediaries like the banks will play a very involved role in the supply chain of the future except that the role and the positioning may be different from the ones they have played over the past 1000 years where they have basically dealt with parties on a bilateral basis.

    In this case, the banks will be part of the eco-system and they will all have the same level of information as the other players in the ecosystem. E.g. when a raw material supplier is ready to ship the goods, the notification is received by the inspection agency, shipping agency and the bank alike and the inspection agency has inspected and passed/failed the goods, then, the same information will be available to the entire supply chain thus, enabling a dis-intermediated flow of information.

    The shipper will know exactly when to pick-up the goods and If the smart contract allows the producer to be paid upon successful inspection and shipment of the goods, then the payment will be released at that stage and all these transactions will be visible to the entire eco-system, albeit, on a controlled basis.

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    Marrying Market Knowledge And Technological Consequences

    It is important that hotels focus their investment interest on blockchain products and services in a mature development stage. In this regard, a thorough assessment for the use, the need, and the expectations of blockchain-based implementations has to be conducted throughout hotel management accompanied by strategic tech consultants.

    Once a use case has been defined, return on investment scenarios are key to judge the investment risk in case of a worst-case development. Further, a pro-active, frequent, and transparent communication between experts and implementers is crucial to grasp the needs of all stakeholders involved and to “bridge” the gap in complementary knowledge.

    Why should you use blockchain? Why you use this, in case you don’t want either a centralized host, or you want to prove in a tamper free way that your data has not been altered publicly, or you want to share with many users in a transparent way, certain bits. So, whenever you’ve got an application that does not match these criteria, for me, from a synthetic perspective, is not worthwhile implementing it. Y.R.H., Senior Strategic Consultant & Tech blogger on blockchain.

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