What is Blockchain and Why is it Taking over the World by Storm
The blockchain race is getting more heated than ever. More and more key industries have started to build and even launch new products and services based on this cutting-edge technology. In fact, world-leading enterprises like IBM, Google, Amazon, etc. are already jumping on the blockchain train with proprietary services and solutions that promise to significantly enhance service quality, transparency, and security. Blockchain is also one of the main drivers behind the recent phenomenon of IT startup surge, and now even the interest of regular consumers are piqued. So what exactly is blockchain and what kind of value does it offer? Let’s dissect blockchain tech in this article.
Blockchain Technology: How It Really Works
Blockchain is, in simple terms, a public ledger designed in such a way that once data is recorded on the network, alterations become near impossible. It is operated via various distributed “nodes” that maintains a copy of the network which, in some cases, also process transactions. Like its name suggests, data is logged via creation of a new data “block” to the network “chain”, safeguarded by cryptography and hashing.
Each blockchain address generated comes with a unique public-private cryptographic key pair, both of which are used to encrypt and decrypt the data it contains/interacts with. Whereas the public key acts as the address itself for data receipt, the private key serves as a distinct signature that signifies address ownership, unlocking access to use said data.
Another cornerstone in blockchain is hashing, where specific input data is converted into a fixed-size, unique string of numbers and letters called a “hash”. In blockchain, every block of data is tagged with its own hash as well as the hash of the block before it. Hashes are changed when data inside a block is modified, which means fraudulent alteration is extremely unfeasible. These are the definitive, foundational security mechanisms that enable blockchain to operate as the renowned “trustless” network it is today: completely transparent and open for public view as well as audit.
Values Offered by Blockchain Technology
Hashing and cryptography are only the fundamentals of every blockchain network; each blockchain has unique mechanisms that distinguishes them all from one another. Today, there are over 2,000 blockchains out there, and they are defined by block validation mechanisms and exclusive network concepts. All of these factors combined make up four primary applications: settlement, smart contract, securities, and privacy.
1/ Settlement
Settlement is simple: making transactions and viewing a detailed, public yet tamper-proof record of transaction history. This value is reflected in blockchain’s capacity to perform numerous transactions at a rapid rate and with high load capacity. Known as immutability, this was the core idea behind the world’s first blockchain, Bitcoin. Everything is available for public view, free of middleware, and immune to changes — a universal value offered by all public blockchains. After Bitcoin, various settlement-focused blockchains has been introduced to the market, including but not limited to Omisego, Litecoin, Ripple,… and many more.
2/ Smart Contract
Past the inception of Bitcoin, new blockchains were introduced to the market and popularized the concept of smart contracts. Smart contract is a computer protocol that digitally enforces and verifies the execution of a particular transactional activity between two or more entities. It allows for the creation of decentralized applications (dApps) that transparently and securely operate on blockchain networks. DApps and smart contracts can be used by consuming associated tokens.
Smart contract was formally introduced to the world through the debut of a new-generation blockchain called Ethereum, commonly referred to as the world’s second most well-known blockchain. Many blockchains on the market today utilize smart contracts and customize how they work according to the blockchain’s purpose. EOS, for example, features unique mechanisms involving management of resources required to store, send, and receive data on the blockchain such as smart contract information. Today, over 2500 dApps exist on the market, most of which are built on Ethereum and EOS, which makes them the most attractive blockchains for dApp developers.
3/ Securities
In blockchain, there are two types of tokens: utility and security. Utility tokens serve the purpose mentioned above, to enable use of dApps built on the blockchain. Security tokens, on the other hand, are deemed as securities of real-world, tradable assets, thus subject to federal regulations similar to stock. Examples of prominent security tokens include POLY, SWARM, etc.
4/ Privacy
Last but not least, privacy blockchains are also gaining popularity due to their focus on protecting personal user information. These networks allow for increased anonymity while still retaining the core blockchain concept of immutability. A few noteworthy privacy blockchains on the market includes Dash, ZCash, etc.
The Global Takeover of Blockchain: How to Get Yourself Started
Today, new revolutionary blockchain protocols are being developed at a rapid pace, and the industry as a whole is surging in popularity. Because of its groundbreaking approach to data security and ownership, more businesses across various industries, as well as regular consumers, are jumping into this promising industry heads-on. Blockchain technology can be used to improve the storage of important data, such as medical records, banking records, etc. to prevent fraud and tampering. Furthermore, it can also be utilized in information verification, proof of provenance, communication and networking, and so much more.
In summary, application of blockchain technology will help businesses gain major competitive edge, cut costs, and maximize profits. Blockchain, however, is vastly different from conventional technologies. Since it is still relatively new, not many developers have the expertise to develop efficiently. Plus, as discussed above, different blockchains have distinct mechanisms thus development requirements, and the industry is evolving at breakneck speed.
All of these mean much time, resources, and manpower must be spent on research and development efforts, which can be extremely costly. Moreover, as blockchain is still a niche industry with scattered user communities, blockchain-employing businesses might struggle to make themselves known in the market. There are many projects that rose and fell, which further diminishes consumers’ trust. Regulations can also pose a problem, as the technology is still new, underexplored, and very much misunderstood thus perceived with mixed sentiments. It can be difficult figuring how and where to start, especially for startups.
Setting out to break down these barriers to blockchain industry, Infinito is dedicated to simplifying blockchain integration for inquiring businesses of all scales and industries. At the beginning of 2019, the company released Infinito Blockchain Platform, a comprehensive development platform for blockchain businesses and developers. Proved to cut engineering cost by 60% and time by 35% for decentralized application development, IBP offers reusable modules and professional services, either as-is, White Labelled, or custom-made, to serve a wide spectrum of business needs. Currently, blockchain service provider Blockpass is a client of Infinito Blockchain Platform.
Infinito is actively expanding its ecosystem by collaborating with blockchain industry players around the globe to become the one-stop solution for businesses and consumers looking to utilize blockchain. Contact info@infinito.io to get started with blockchain or become an Ecosystem partner today.
