Why Blockchain Will Win.

Why Blockchain Will Win.

Blockchain as the present and future of technology.

If you are reading this, then you must already have an idea of what a "blockchain" is, or at least read about it somewhere once or twice, no?

Either way, this article promises to be an interesting guide as to why you wouldn't want to be caught unawares when this super powered blockchain technology thing takes over the world!

-- Just kidding, or am I? Well... there's only one way to find out!

Origin

In the early 1990s, mathematician Dave Bayer, computer scientist Stuart Haber, and physicist W. Scott Stornetta formulated ways to apply cryptographic techniques in a chain of blocks as a way to secure digital documents from data tampering.

Their work inspired many other computer scientists and cryptography enthusiasts, this ultimately led to the creation of the first decentralized cryptocurrency, bitcoin.

The bitcoin whitepaper was published in 2008 under the pseudonym Satoshi Nakamoto, formally introducing the first notable blockchain implementation, and making several references to the work of the aforementioned scientists and others along the way.

Ever since, the number of blockchains in existence and overall applications of this technology have increased remarkably.

As time passes, the blockchain is proving to be somewhat inevitable and looks bound to solidify itself as the next step in the evolution of mainstream data storage and processing as we know it.

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How it works

A blockchain, simply put, is a digital ledger or database, that contains information, (such as records of transactions) which can be viewed simultaneously by all the users on its network and cannot easily be tampered with; it is also known as a distributed ledger technology (DLT).

Records of valid transactions that have taken place on the network are stored in "blocks". These blocks have certain storage capacities, and when filled, are closed and linked to the previously filled block, forming a chain of data known as the blockchain.

All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled.

Once data is saved on the system, it is then distributed to thousands of peer-to-peer network nodes, recorded in chronological order, and encrypted. This mechanism provides enhanced traceability of any changes made to a block as well, thus creating decentralized, secure, synchronized and shared timestamped records that cannot be altered.

At its very core, blockchain technology functions to securely store and share data within a publicly accessible framework, thereby guaranteeing the fidelity and security of a record of data and generating trust without the need for a "trusted" third party.

shubham-dhage-R2HtYWs5-QA-unsplash.jpg Illustration by Shubham Dhage on Unsplash

Having explained this, it is important to note that there is always scope to build application layers on top of a blockchain system and enable additional functionalities such as public or private keys, or self-executing mechanics (e.g., smart contracts).

Understanding the blockchain basics will show you just how much of an effective tool it is in our world today.

"Performing a transaction with blockchain is like taking a walk on the proverbial "sands of time," only this time, your footprints remain engrained in this "sand" and will forever remain intact for whoever knows where to look." - Osedebame A. M.

This digital "footprint" records every detail, starting from when you leave your address till when you get to your destination, including details of every time you've taken this "walk," everywhere you've ever gone, and the details of everyone who has ever visited your address as well.

Applications of Blockchain

"Blockchain fixes this," happens to be my favorite phrase at the moment, and will likely be for a while yet, as it stays true more often than not. This relatively new technology which initially became popular for its innovation in finance with bitcoin, now has a growing list of several hundred separate applications leveraging on and utilizing its system.

A major reason why it's only logical that blockchain adoption is the next step in the evolution of technology, lies in its inherent ability to improve already existing systems, and numerous helpful applications, some of which I'll now discuss...

Banking

Thanks to its secure and transparent nature, blockchain technology greatly improves a user's banking experience and offers potential solutions to a number of banking challenges like:

Saving Money

Yesterday, I took almost half a million dollars in cash to deposit at my bank, on getting to the desk, I was immediately redirected to the manager's office and made to fill out 6 forms detailing my source of income, my address, details about my place of work and that of several of my family members. The whole time, this manager lady had her eyes fixed on me, probably because I came in wearing a t-shirt and a pair of shorts, or maybe she just really liked my smile, I guess I'll never know.

While the above paragraph isn't a true-life story of mine yet, it certainly is close to the reality of people when they attempt to start utilizing traditional banks to store large amounts of value. With blockchain, however, all a person has to do to save as much money as they want, is set up a crypto wallet on their mobile device or computer and fund it.

Imagine having access to and control of all your money, all the time, without having to explain where from, where to or why that much? to any authority, ever! Sounds like a really good deal to me.

Moreso, in economies suffering from inflation, saving in a stablecoin, like USDT, for example, firmly secures monetary value in a fiat-backed crypto token. This completely eliminates the adverse effects of saving in a local currency which is rapidly losing its purchasing power due to harsh economic conditions.

Money Transfers

Inter-bank inoperability and the challenges that come with making large transfers at once do not exist using blockchain, this is because the system eliminates the middle man, and all transactions occur directly between the parties involved.

Cross-border transactions in particular can also be quite daunting, and in some instances, impossible to process; blockchain fixes this. A blockchain money transfer between two people who are several continents apart, would complete in the same time frame it would take if they made that same transaction standing 2 feet apart at that point in time, this usually ranges from seconds to minutes.

Credit and Loans

Traditional banking institutions process loan applications by looking at factors such as a person's credit score, homeownership status, or debt to income ratio.

An individual would have to divulge a lot, if not all their personal information, in order to get a loan under the current traditional setting, this poses certain security risks which can lead to identity theft amongst other possible implications.

In 2017, for example, Equifax, (a credit bureau which tracks the credit history of borrowers in order to generate credit reports and credit scores and then sells this information to banks and other financial institutions to help them determine the credit risk of their customers,) got hacked, and this exposed the personal information of over 145 million Americans.

With blockchain, we’re looking at the future of peer-to-peer loans, faster and more secure loan processes in general, and even complex programmed loans that can approximate syndicated loan structure or mortgages, all without requiring users to part with their personal information and put themselves at risk.

Healthcare

Healthcare companies like Medicalchain are already using blockchain technology to offer individuals control of their own health records. They rightly argue that creating an incorruptible medical record will empower patients to be at the center of their own care and will support practitioners, nurses and clinicians with life-changing decisions on the future of a person’s health.

Smart Contracts

In simple terms, a smart contract is used to record conditions that are to be fulfilled before a transaction is completed. Built on the Ethereum Blockchain, (which allows developers to build their own cryptocurrencies atop of it in the form of tokens, amongst other functionalities,) smart contracts work by following simple if, else, then... statements that are written into a code.

A network of computers also known as nodes executes these statements when predetermined conditions are met and verified. These statements could include actions such as transferring value, sending messages or notifications, registering users and so on.

Smart contracts are already becoming more and more accepted, recognized as valid and permissible by state legislation, for example, in 2017 the State of Arizona even passed legislation to legalize smart contracts for property sales.

Voting (Use Case)

Blockchain technology provides an avenue to make voting and election processes more easily accessible, while also improving security and trust in the end result. Each vote would be attributed to one registered identity, and with the ability to create a fake ID or hack the system being impossible, government officials could tally votes more efficiently and effectively.

Non-Fungible Tokens (NFTs)

NFTs are simply unique digital signatures that represent items, like music, pictures, GIFs, videos, etc., that can be sold or transferred on a blockchain, ensuring that a sole owner can claim full rights to it.

Thanks to blockchain technology, consumers can now claim sole ownership over some of the most desirable digital assets out there, and creators can now sell and earn all the profits directly from anywhere in the world, with access to a global market as well.

Cryptocurrencies may be the most obvious application of the blockchain, but the transparent and immutable nature of the distributed ledger technology presents a multitude of practical use cases. - Syed Asif Zaman

Big Tech in Blockchain

Over the past few years, several of the world's biggest technology companies have made efforts to leverage blockchain technology, either for profit or for greater transparency, security, and traceability. These include but aren't limited to;

Individually, I might bet against any one of these big companies and dismiss their actions as probably nothing, but, looking at them together, it is only logical to wonder if indeed they're on to something, to find out exactly what it is, and learn how to not get left behind.

What's stopping us?

"We're still early," is another phrase used in describing blockchain related systems that I've come to like, as it holds true for all the possibilities and opportunities this technology presents. However, it also holds true for all the challenges it will have to overcome for mainstream adoption to be a reality. Some of the most obvious challenges are:

Environmental costs

Great things usually come at a cost, this time, the biggest price we pay seems to be in electricity. Thousands of computers and blockchain mining centers utilize electricity from power grids to compute, verify, validate and hash transactions on the blockchain network. Large amounts of energy are therefore required for supporting the blockchain infrastructure. This also results in a high carbon footprint which isn't environmentally friendly.

Speed and Scalability

Due to the added advantage of the security and node-by-node verification also, the transactions on a blockchain-based system started off being slower than legacy networks.

Integration with traditional systems

The challenge still remains for corporations on how to fully integrate blockchain with their legacy system(s). In most cases, should they decide to use blockchain, organizations are required to completely restructure their previous system, or design a way to successfully integrate the two technologies.

Why blockchain will win

Imagine a world where we can send money to our friends or family wherever they are located within minutes and without any centralized banks. A world where we can vote via our smartphones and where we don’t need to wait for the approval of the authorities to get loans or to get our insurance claim back. A world where governments cannot steal from citizens, because every transaction can be traced by anyone at any given point in time. A world where we trust the data as it is, and counterfeiting is not possible.

This is why blockchain will win, because it provides the world with endless opportunities, and puts total control firmly in the hands of the people using it. The world needs it too much for it to ever get relegated to the shadows again.

Overcoming the stumbling blocks might take some time, but even now, answers to all the everyday questions posed at the idea of mainstream blockchain technology adoption are being proffered. For example, Industry pace-setters like Bitnob have already integrated and now utilize the Bitcoin Lightning Network (L2) which effectively solves the scalability and speed challenges on the Mainnet (L1).

Several energy-efficient blockchains are also already in existence, and miners of energy-demanding networks are noticeably shifting towards clean, renewable energy overtime as well.

Conclusion

In this constantly evolving, radically adapting technological world that we live in, with time, all the hindrances to mainstream blockchain acceptance will ultimately be resolved. Eventually, traditional systems will have to adapt or get replaced one way or another. Will you be left behind?

Thanks for reading this article! I hope you enjoyed it, and that somehow, it has improved your general understanding of blockchain technology. Furthermore, I hope it gives you reasons to believe that indeed, blockchain will win, so you position yourself accordingly.