What is Blockchain Technology?
Think of a Blockchain as a hierarchy of transactions, where the powers are distributed and where all records of each transaction are found in every single node of the network placed across many computers, sometimes up to millions over a completely safe and automated network.
Designed to incur only the infrastructural cost and no transaction costs, the system is an open platform, where transactions can be carried out without approvals from any trust party, and double-spending is resolved through its ability to recognize each single block being added to the chain thereby eliminating infinite reproducibility.
There are four stages in a Blockchain process, and these can be understood through an example of typical purchase on Amazon:
- A transaction must occur.
Here you pick a product on Amazon, go through all the checkouts and finally make the purchase.
- The transaction must be verified.
Here your transaction will have to be verified. Usually an individual is in charge of vetting new data entries on centralized systems, but on Blockchains verification is done by clusters of computers in thousands or even millions. They run your transaction through a series of processes checking the amount, time and other details under seconds or at most a few minutes.
- The transaction must be stored in a block.
Once the transaction has been verified and all protocols have been observed, its details are then stored in a block with hundreds or thousands of similar transactions like it.
- The block is assigned a hash.
When all the transactions in a block have been verified it is then assigned a unique identification code called a hash to distinguish it from all other blocks. It is then added to the Blockchain thereby completing the process.
History of Blockchain
Stuart Haber and W. Scott Stornetta were the first pioneers in this world of blockchains. They had sought out to implement an immutable system of document timestamps by working on a cryptographically secured chain of blocks in 1991.
In 1992 they incorporated Merkle trees to their design, which allowed several document certificates to be collected at once into a single block, thereby improving its efficiency.
In 2008 the first-ever Blockchain was designed by Satoshi Nakamoto. The words Block and Chain were actually used separately in Satoshi Nakamoto’s original paper, but by 2016 they had conventionally combined into one word, Blockchain. The enigma had used a Hashcash-like method to improve the system by time-stamping blocks and adding them to the chain with no need to be signed by a trusted party effectively increasing the processing speed marginally. The following year Nakamoto used the design to implement a public ledger for all transactions in Bitcoin.
According to Accenture, Blockchains attained a 13.5% adoption rate within financial services as of 2016 with research showing that by 2030 most governments worldwide would have adopted some form of virtual currency.
Advantages of Blockchain
Believed to be the new Internet, the Blockchain benefits are quite large, and the core ones are:
- Decentralization: The system does not require a central authority or permission from any trusted authority to operate.
- Transparency: Every transaction and change made to a blockchain is recorded and made available for everybody to view.
- Security: The blockchain uses cryptography to operate making it one of the most secure systems in the world.
- Immutability: Once a transaction is carried out, recorded and added to a blockchain, the only way to alter it is to change all blocks and all transactions within the blocks that come after the selected transaction. This is nigh impossible thereby reducing fraud and embezzlement.
- No Downtime: Because the blockchain is not centralized but hosted across a network of computers, it cannot suffer server downtime and its services do not stop.
Along with the pros, Blockchain has also some cons of its usage.
Disadvantages of Blockchain
The major negative points of Blockchain technologies are:
- Complexity: To use blockchains one has to have a reasonable amount of knowledge in order not to get lost within the infrastructure, so it is suitable for the older generation and non-techies.
- Blockchain size: With the advances in Global Blockchain Technologies, new transactions and blocks are added each day increasing the size of the system making large implementations difficult and critical.
- Data modification: Due to its immutability, information added to the system must be verified to be 100% correct, because once it enters it cannot be easily modified, and subsequent errors discovered cannot be resolved.
- Need for Resources: Due to its expansion, the Blockchain requires more nodes to work, hence the more transactions performed the more nodes needed, which is why the system is always draining resources.
Nevertheless, the advantages outway the disadvantages, which means that Blockchain brings its users more benefit than harm.
Example of Blockchain Technologies
There are so many technological applications of Blockchains, and some key Blockchain Technology Examples include:
- Health: SimplyVital Health is a good Blockchain example that uses blockchain technology to enable its users and patients to easily access, move and share their healthcare data.
- Finance: Stellar is a blockchain platform that also uses blockchain technology but for money exchange and low-cost transactions down to 1 cent for 100,000 transactions.
- Identification: Crypto Valley in partnership with Uport developed a blockchain project in Switzerland that registers residents’ IDs, allowing them to vote online and also validate their residency.
- Supply Chains: Walmart and IBM launched Blockchain Food Safety Alliance in China using blockchain technology to improve food safety and tracking.
Healthcare and Fintech are the spheres where Blockchain technologies are used the most, and we are involved in many projects within them.
Technorely’s Contribution to Blockchain
We are a custom software development company founded in Vancouver, and we have invested heavily in blockchains. We have embarked on several hundreds of projects with our top being Stellar, Ethereum, Hyperledger and EOS.
Moreover, we have worked with so many cryptocurrencies in a bid to create a system built on blockchains that can provide our clients with stability, swift real-time low-cost transactions and data integrity. Some of our key moves can be seen in our development of the world’s first platform for real business asset tokenization on Stellar. We believe that EOS can replace Ethereum and that EOS is even better suited to smart contracts and building decentralized applications.
Conclusion and Future Outlook of Blockchain Development
With your newly found knowledge of Blockchains we can now select a Blockchain Technology for your project. There are two stages of Blockchain Project.
At the first stage you need to understand that a blockchain is necessary. Recent advances in technology have shown that blockchains can be used almost anywhere and this could apply to your project.
The second stage is to decide which blockchain is needed, and this is done through Consensus Protocol. Because multiple blockchains could exist and you could get confused on which chain to adopt, the Protocol adopts the longest chain available based on the logic that more users on a chain mean more blocks can be added quicker proving the blockchain’s integrity.
For more details please read our article 7 Phases of the Software Development Life Cycle
To understand the future of Blockchain Development the outlook has to be taken from several fronts because the Blockchain industry is not a monolith having entered into Finance, Governance, Supply Chains, Agriculture, Education, Entertainment and even Energy but all these sectors have a few factors in common:
- Crypto marketing: With cryptocurrencies, tokens and their familiarization with real-world assets it has been predicted that with the coming years, blockchains will take over all sectors in the world and transactions will be performed using crypto technology. It has even been posited that by 2022 the Bitcoin price would be as high as US $250,000.
- Scalability: Just as the Internet had scalability issues before the invention of TCP/IP protocols the blockchain world is also experiencing these issues. Projects are being undertaken to tackle this issue so that with time blockchains will be able to be built to any size without issues thereby taking the potential of the industry to unimaginable heights.
- Technology: Nearly every industry worldwide has one or two blockchain applications recorded from healthcare to citizen identifications to documentations. The applications for the system keep improving daily and a worldwide decentralized blockchain system is inevitable.
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