BLOCKCHAIN EVOLUTION – 
A Global Revolution

It should be clear by now that the blockchain and distributed ledger technology will play a very important role in our future, but it’s not. Blockchain adoption statistics show that half a percent (0.05%)  of the human population is currently using blockchain technology, or somewhere around 40 million people. According to an HSBC survey, 59% of consumers have never heard of blockchain and 80% of those that have heard of blockchain don’t understand it. 

According to even the most conservative estimates, this number is expected to quadruple in 5 years, and in 10 years, 80% of the population will be involved with the blockchain technology in some form. It’s just a matter of education on a simple level where the mainstream community can grasp the concept and understand that this technology stands for freedom, privacy and equality on every level in every country worldwide.

 

WHAT IS BLOCKCHAIN? How Would It Serve Us?? 

courtesy of Blockgeeks

Firstly, let’s take a historical look at how this all came about. Was it just a coincidence? Society has been indoctrinated for so long and tends to stay within the status quo or have become complacent putting up with the way things are. It’s time to educate ourselves and be ready for a major shift from the world as we know it. This will benefit our quality of life and the lives of every living soul on the planet. 

Do you know what fiat currency is? Many people do not or at least don’t understand what it means. Here is a short explanation of how it has become detrimental to the economic system we all rely on today;

 

What Is Fiat Money?

 Fiat money or paper money has been defined as any money declared by a government to be legal tender. State-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard. Intrinsically, it’s valueless money used as money because of government decree.

Throughout history, fiat currencies have had the order of rising and eventually collapsing, often due to devaluation. Initially, paper money gets introduced into an economy whereby it creates an economic boom. Over time, however, it gets overprinted, slowly building inflation and losing value.

Fiat money is a government-issued currency that isn't backed by a commodity such as gold. Essentially it gives governments' central banks greater control over the economy because they control how much currency is printed.

We all know that money is an entity that can be used in exchange for goods and services and then, of course, there is another system to keep track of its ownership and transactions?—?who owns what, who has what, and who owes how much to whom. 

Historically, it has been widely accepted we need a third-party trusted entity to keep track of money, to keep those transactions and deal with the conflicts, if applicable. But that trusted party being central banks and the Government comes with a cost in terms of efficiencies, the potential for corruption, extra fees and so forth.

The GFC Of 2008 – A Prime Example

In simple terms, let’s go back and see the money flow in a specific scenario in the USA during 2008 where the trust model did not work that well – 

People were earning more money and stored it with a central authority (i.e. banks).
The central authorities/banks started to facilitate risky loans to attract new customers and faced significant defaults on such loans. Due to the inability of the people to pay back the money, many banks collapsed and filed for bankruptcy.

Banks were also using people’s money to invest and lost all the money that the customers had trusted them with. In a nutshell, the banks lost the money that the customers deposited with them, leaving the customers no way of recovering their money.

With the banking system on the brink of collapse, the Government tried to save or bailout some institutions by offering the people’s money (i.e. tax revenue). That created extra expense and of course exceeded the Government’s budget or income, so to alleviate this, the Federal Reserve chose to print more money. There seems to be this trend of printing money to “fix” problems. Theoretically, there is no fixed limit to the amount of money a government can print. A couple billion here, a few hundred billion there, and pretty soon you have a real liquidity crisis; the kind where you are drowning in money, none of which is worth much of anything.

The Gold Standard Kept “Them” Honest

In the past, in the USA and many other countries, Gold was used as the standard where the authorities could not print more money than the gold reserves and it seemed to be a good way to ensure that we use our economy like debit cards so as to keep inflation in check. Basically, you can’t spend what you don’t have.  But now we have credit cards and can spend what we don’t have. Whatever the perceived intentions Roosevelt and Nixon had to cut ties with Gold initially, there have since been ramifications. So effectively, now the Government can print as much money as they want which brings a multitude of issues.

Primarily, with more money being printed, the value of money is reduced and the economy is impacted. As an example, if you have $100 and the country has a total of $ 1000, you own 10% of the money. If the Government prints an additional $1000, you only own 5% of the money and that decreases the value of your money. 

This is what happened in the crisis of 2008. Banks giving bad loans were the cause. Printing the money was a mitigation that helped in this specific case.

Central banking is immoral. Fiat money and its inevitable inflation are theft; the banking monopoly robs people of opportunity and prosperity; the punishment of financial dissenters, such as black marketeers, negates freedom by denying individuals the use of their own property. Central banking’s structure has become so transparently unstable and fraudulent that people have lost their confidence and sense of security in it.

Technology Rises To The Fore

Only six weeks after the crisis, on Nov 01, 2008, a new concept and technology came to light that will positively impact society, business and reshape the financial world. ?A person (or persons) by the name of  Satoshi Nakamoto created a decentralized cryptocurrency known as Bitcoin and pioneered Blockchain technology.  The idea was to create a world where no central authority can control all the money. 

“I’ve been working on a new electronic cash system that’s fully
peer-to-peer, with no trusted third party.”?—?Satoshi Nakamoto

So, What Is A Blockchain? 

Blockchain has been defined as a digital ledger in which transactions are recorded chronologically and publicly. Interestingly, Satoshi Nakamoto, who developed and released the first blockchain never actually used the word “blockchain”. Only the words block and chain. 

A blockchain consists of a number of blocks, hence the term. Each block is a record of transactions of specific data, which can contain anything from Cryptos to voting records to medical data. When one block is completed and can no longer be updated with new data, it is added to the chain and another, new block, is formed.

All the information on the blockchain is publicly available, as it’s a decentralized system. Decentralized literally means that the information is stored on many computers distributed around the globe, and there’s no specific party or authority to control it.

Visualizing Blockchain Technology

You could think of blockchain as the Google Docs service – this is a very clever metaphor from William Mougayar.

Do you still remember the good-old-times when people used to create separate Word documents, save them, and then forward them to others for editing? You might, and some of you may still be doing it.

These days, it’s much easier to use a Google Doc, which allows us to create, view, comment, and edit the information in a live document online, given that we have the link and know where it’s located.

In a similar way, blockchain allows for the distribution of information. So, there we have a Google Doc – a block – that is duplicated thousands of times across a large network of computers around the world – a chain of blocks. The network is set to update every single document or block as and when it changed.

Blockchain – More Than Crypto

The blockchain is an undeniably ingenious invention and has since evolved into something greater. Blockchain technology created the backbone of a new type of internet. Originally devised for the cryptocurrency, Bitcoin, the tech community has now found other potential uses for the technology.  

Image Courtesy of Blockgeeks

 

The Problem with Centralized Infrastructure

Today on the Internet, we must constantly trust one another with sensitive data, transactions, and records. Most of our interactions on the Internet run on centralized web servers, and massive amounts of user data often exist in a single database. Current databases are designed to be controlled by “trusted” admins who can read, alter, block, and even delete data. The centralized architecture of the Internet today is not only inefficient but vulnerable to censorship and targeted attacks by both hackers and internal bad actors.

 

The Value of Decentralization

The decentralized architecture of a blockchain is a global network of computers simultaneously running the software and validating the chain of transactions is what ensures that the transaction record is never compromised. Decentralization is critical as an architectural principle. It makes a blockchain network less likely to fail, harder to attack, and harder for bad actors to game the system.

Conclusion

There are so many benefits to being on the blockchain and as more companies and industries adopt this technology the fairer, more honest and prosperous the world will become. The users of Social Media at this stage are particularly vulnerable to the issues that come with centralization being lack of privacy, data harvesting, fraud, and corruption to name a few. In the next article, we will go deeper into how the blockchain works, what industries are utilizing it and how it can positively impact social media and market networks. 

 

References: Blockgeeks Hackernoon

 

 

 

David Ogden

A Crypto/Blockchain enthusiast and a strong advocate for technology, progress, and freedom of speech. I embrace "change" with a passion and my purpose in life is to help people understand, accept and move forward with enthusiasm to achieve their goals. 

 

 

David https://markethive.com/david-ogden

Unilever, O2 and Sky Join Blockchain Pilot for Digital Ad Transparency

 

David https://markethive.com/david-ogden

                                 

David https://markethive.com/david-ogden

BLOCKCHAIN – Knowledge Is Power. Wisdom Is Power With A Purpose

“Quote” accredited to Solitaire Parke

Blockchain is defined as one of the most significant technological advances in modern history, potentially on a par with the internet, which has led to it being dubbed “The Internet 3.0”. Despite the incredible potential of blockchain to reshape the world as we know it, there is still little understanding of what it is, what it does and why it is so revolutionary. 

The Real Origin Of Blockchain

Blockchain was first conceptualized by Stuart Haber and W. Scott Stornetta back in 1991, although they didn’t call it blockchain. They wrote a series of papers and patents. One, in particular, was How To Timestamp a Digital Document, published in 1991, which involved a cryptographically secured chain of blocks. This is what many consider to be the first incarnation of blockchain technology. Basically, they set out to create an immutable ledger. 

Stuart Haber and W.Scott Stornetta

As Stornetta stated in an interview,
“It’s unfortunate that so few people actually read all the papers and patents, because there are a few ideas that can be mined from there that some have since reinvented because they never read the papers.” 

Nevertheless, Stornetta is humbled by the fact that his 1991 paper about Timestamping ended up inspiring the whole blockchain movement. Interestingly, even after the “blockchain” work they did, the connection between it and money was overlooked. It was not until Satoshi released the Bitcoin whitepaper in 2008 that the connection became a reality and a peer to peer monetary system was created. 

There were references made to Haber and Stornetta in Satoshi’s whitepaper, 3 in fact…

Blockchain 101

Blockchain technology is not a company or an app, but an entirely new way of documenting data on the internet. The technology can be used for social networks, messengers, games, exchanges, storage platforms, voting systems, prediction markets, online shops and much more. This can be seen as a new internet, which is why some have labeled it “The Internet 3.0”

The information recorded on a blockchain can assume any form, whether it be signifying a transfer of money, ownership, a transaction, someone’s identity, an agreement between two parties, even how much electricity a lightbulb has used. However, to do so would require a confirmation from several devices namely computers on the network. 

Once an agreement also acknowledged as a consensus is reached between these devices to store any data on a blockchain, it is unquestionably there. It cannot be disputed, removed or altered without the knowledge and permission of those that made that record as well as the wider community. 

Why Is It Called A Blockchain?

Blockchain owes its name to how it works and the manner in which it stores data, namely that the information is packaged into blocks, which link to form a chain with other blocks of similar information.

It is this act of linking blocks into a chain that makes the information stored on a blockchain so trustworthy. Once the data is recorded in a block it cannot be altered without having to change every block that came after it, making it impossible to do so without it being seen by the other participants on the network.

Distributed ledgers have 4 key attributes:

1. Recorded: stored information is timestamped.
2. Immutable: Nothing that is recorded can be changed.
3. Transparent: anyone can see the ledger of transactions
4. Decentralized: the ledger exists on multiple computers, often referred to as nodes.

Essentially, each block contains the data it is recording. For example, a transaction like 1 MHV coin being sent from Tom to Jerry, as well as timestamps of when that information was recorded. It will also include a digital signature linked to the account that made the recording and a unique identifying link, in the form of a hash (think of it as a digital fingerprint), to the previous block in the chain. It is this link that makes it impossible for any of the information to be altered or for a block to be inserted between two existing blocks. In order to do so, all the following blocks would need to be edited too.

As a result, each block strengthens the previous block and the security of the entire blockchain because it means more blocks would need to be changed to tamper with any information. When combined, all of these create unquestionable storage of information, one that cannot be disputed or declared to be untrue.  It is important to note to be absolutely sure where you are sending money. On a blockchain, once a transaction is sent it is sealed and cannot be reversed.

 

 

The Three Pillars Of Blockchain Technology

Let’s go into more depth about the three main properties of blockchain technology which are;

• Decentralization
• Transparency
• Immutability

Pillar #1: Decentralization

For decades now we have been subject to and use a centralized entity that stored all our data and we would have to interact solely with this entity to transact or acquire whatever information we required. 

A perfect example of a centralized system is the banks. They store all your money, and the only way that you can pay someone is by going through the bank.

When you google search for something, you send a query to the server who then gets back at you with the relevant information. That is called a simple client-server.

We have used centralized systems for many years, thinking all is well, however, they have several vulnerabilities.

• Firstly, because they are centralized, all the data is stored in one spot. This makes them easy target spots for potential hackers.
• If the centralized system were to go through a software upgrade, it would halt the entire system.
• What if the centralized entity somehow shuts down for whatever reason? That way nobody will be able to access the information that it possesses.
• Worst case scenario, what if this entity gets corrupted and malicious? If that happens then all the data that is there will be compromised.

So, what happens if we just take this centralized entity away?

In a decentralized system, the information is not stored by one single entity. In fact, everyone in the network owns the information.

In a decentralized network, if you wanted to interact or send money to someone, then you can do so directly without going through a third party. That was the main ideology behind Bitcoin and also the ideology of Markethive Coin. You and only you alone are in charge of your money. You can send your money to anyone you want without having to go through a bank.

 

Pillar # 2: Transparency

One of the most interesting and misunderstood concepts in blockchain technology is “transparency.” Some people say that blockchain gives you privacy while some say that it is transparent. Sounds contradictory, doesn’t it?

The simple fact is a person’s identity is hidden via complex cryptography and represented only by their public address. So, if you were to look up a person’s transaction history, you will not see “Tom sent 1 MHV” instead you will see “1MF1bhsFLkBzzz9vpFYEmvwT2TbyCt7NZJ sent 1 MHV”. This makes the person’s real identity secure and private while still being able to see all transactions that were done via their public address – transparency. 

This image shows what the blocks and transaction details of each public address on Blockchain Explorer

 

 

This level of transparency has never existed before within a financial system. It adds that extra, and much needed, level of accountability which is required by some of these biggest institutions.

Speaking purely from the cryptocurrency perspective, if you know the public address of one of these big companies, you can simply pop it in a blockchain explorer and look at all the transactions that they have engaged in. This forces them to be honest, something that they have never had to deal with before.

That’s of course if these companies integrate the blockchain. You can see why something like this can be very helpful for the finance industry right?

Pillar # 3: Immutability

Immutability, in the context of the blockchain, means that once something has been entered into the blockchain, it cannot be tampered with. Imagine how valuable this will be for financial institutes!
Imagine how many embezzlement cases can be nipped in the bud if people know that they can’t “work the books” and fiddle around with company accounts.

The reason why the blockchain gets this property is that of the cryptographic hash function. In simple terms, hashing means taking an input string of any length and giving out an output of a fixed length. In the context of cryptocurrencies like bitcoin, the transactions are taken as input and run through a hashing algorithm (Bitcoin uses SHA-256) which gives an output of a fixed length.

Let’s see how the hashing process works. We are going to put in certain inputs. For this exercise, we are going to use the SHA-256 (Secure Hashing Algorithm 256).

As you can see in the above image, in the case of SHA-256, no matter how big or small your input is, the output will always have a fixed 256-bits length. This becomes critical when you are dealing with a huge amount of data and transactions. So basically, instead of remembering the input data which could be huge, you can just remember the hash and keep track.

These hash functions make it ideal for cryptography. There are certain properties that a cryptographic hash function needs to have in order to be considered secure, however, there is just one property that we’ll focus on today. It is called the “Avalanche Effect.”

What this means is even if you make a small change in your input, the changes that will be reflected in the hash will be huge. Notice the change in the hash in the image below? Just because one letter was changed from a capital letter in the input hash, to lower case, it drastically affected the output hash. 

The blockchain is a linked list that contains data and a hash pointer that points to its previous block, hence creating the chain. What is a hash pointer? A hash pointer is similar to a pointer, but instead of just containing the address of the previous block it also contains the hash of the data inside the previous block.

This one small tweak is what makes blockchains so amazingly reliable and trailblazing.

Imagine this for a second, a hacker attacks block 3 and tries to change the data. Because of the properties of hash functions, a slight change in data will change the hash drastically. This means that any slight changes made in block 3, will change the hash which is stored in block 2, now that in turn will change the data and the hash of block 2 which will result in changes in block 1 and so on and so forth. This will completely change the chain, which is impossible. This is exactly how blockchains attain immutability.

 

Conclusion

With any disruptive idea, like the Internet was back in the day, not every company will benefit or embrace this new technology immediately. Banks are clearly in the path of the disruption of the blockchain, the Big Data social network systems, the online auction, and shopping centers are as well. And companies that resist blockchain will be left behind in the Internet 3.0.
 
Forward-looking companies that convert to the blockchain to improve the privacy and security of their data and create an environment that is unfettered from political and nefarious agendas, will be the winners on top. 

Just about every company that migrates to the blockchain and new companies launch built upon the blockchain, will prosper, as long as they deliver and make their prime agenda to benefit their customers.

In the next article, we’ll see what companies have already adopted blockchain technology including Social Media and Market Networks and how it proves to benefit the user. 
 

References: Lisk, Blockgeeks

 

 

 

David Ogden

A Crypto/Blockchain enthusiast and a strong advocate for technology, progress, and freedom of speech. I embrace "change" with a passion and my purpose in life is to help people understand, accept and move forward with enthusiasm to achieve their goals. 

David https://markethive.com/david-ogden

David https://markethive.com/david-ogden