Tag: blockchain opportunities

  • Blockchain transaction – How It Works?

    Blockchain transaction – How It Works?

    What is Blockchain Technology?
    What is a blockchain transaction, how it works, how is it useful for everyday life

    By Guy Avtalyon

    A blockchain transaction is a public record of all bitcoin transactions that have ever been executed. A block represents the current part of a blockchain. It records the recent information. When a block is completed, it becomes part of the blockchain. As a permanent database creating a new block. Blocks are connected to each other like a chain in real, consecutive order. Every following block contains a hash of the previous block. Blockchain Technology is one of the hottest and most interesting technologies in the present market.

    The first blockchain transaction

    The first transaction in the real-world took place on 22 May 2010. Laszlo Hanyecz made it. He bought two pizzas in Jacksonville, Florida for 10,000 BTC. In five days, the price grew 900%, rising from $0.008 to $0.08 for 1 bitcoin.

    From a technical point of view, the most fundamental definition of a transaction is an atomic event that is allowed by the underlying protocol.

    Speaking about bitcoin, transactions are ordinarily individual payments.

    Lena sends John 10BTC.

    If the word transaction conjures up a financial transaction in your mind, this is appropriate. The bitcoin blockchain is basically a list of all the bitcoin transactions since Bitcoin began. Bitcoin is only one of many blockchains. Not all blockchains limit their utility to payment transactions. Let’s say, transactions are payments when you think of the blockchain as a distributed ledger. The ledger that keeps a record of who owes who how much bitcoin. 

    Is the blockchain a data structure?

    No, if you consider the blockchain as a data structure then a transaction would be just one of the events that update the data store. But there is a huge difference. Before invent of blockchain you had a situation that one event was able to update only one data table on one the particular machine. With blockchain, such a single event is updating a data table on every machine connected in the chain no matter where it is on the planet.

    Blockchain Transactions are nothing special.

    It is the same as in any other database. To keep it simple, a blockchain transaction is a transaction record in a blockchain. Just like you store a record in MySQL database. It’s exactly the same.  The blockchain is a database. Transactions get stored in the form of blocks and the blocks form a chain to form the blockchain.

     

    Is blockchain transaction safe?

    Blockchain transactions are safer and more effective for most companies. And hence the demand for quality blockchain platforms which can be tapped for ensuring greater security.

    Blockchain transactions are analogous to a wire transfer or cash transaction. Payment is done directly from one party to another. All without going through another financial institution. And without any third-party oversight. Payment processing is done over a private network of computers.  Every single transaction is recorded in a blockchain, which is public.

    Say, blockchain transactions are a feature of blockchain technology’s mainstream feature – cryptocurrencies.

    Cryptocurrencies rely on the blockchain. Each block in the chain holds records. The records are the information of each and every transaction! The transaction’s information gets stored on blockchain ledgers.

    What is blockchain in essence? 

    • A distributed ledger
    • A consensus protocol
    • A membership protocol

    Blockchains transactions require consensus.
    This means the participants must agree on who’s going to extend the blockchain, and how!

    Public blockchains such as Bitcoin, Ethereum use consensus that looks like a crypto-lottery. For example, miners have proof-of-work which is crypto-puzzle and in that way get their lottery tickets. The one who wins this “game” gets the reward. The reward is permission to add one block to the blockchain and, also, such can print new money.
    All miners try to approach to the longest chain.

    This procedure is using to get consensus. It will take time, around 10 minutes. Transactions are not taken as fully confirmed for about one to two hours. After that point, they are adequate “deep” enough in the ledger.

    Introducing an opposing account of the ledger, called as a fork, would be computationally exclusive. This stoppage is a susceptibility to the system. And also an important obstacle to the use of bitcoin-based systems. It is necessary for fast-paced transactions, such as monetary trading.

    But we have to be honest, in spite of privacy-enhancing technologies such as encryption and identity management, someone can see blockchain transactions throughout network nodes. These produce metadata. So statistical analysis can reveal information even from encrypted data. As a result, it can allow for pattern recognition.

    But quite frankly, away from someone cracking the cryptology. The blockchain transaction is one of the most secure digital capabilities available.

    Advantages of blockchain transactions

    Maintaining records of transactions is an essential function of all businesses. Hence, these records have to track the past performance of the company.  And also, help with forecasting and planning for the future. And most organizations’ records take a lot of time and effort to create. That’s why the creation and storage processes are prone to errors. And these transactions have to be executed immediately. Yes, the settlement can take more time, from several hours to several days.

    On the blockchain, the process of transaction verification and is recording.  Let’s say, it is immediate and permanent. Because the ledger has distribution across several nodes. So, this provides the data to replicate and store instantaneously. On each node across the system.

    What is recording in blockchain?

    Recording in the blockchain means to note details of the transaction such as price, asset, and ownership. And also, they are verified and settled within seconds across all nodes. But, when registering the change on anyone ledger, you are registering simultaneously on all other copies of the ledger. Because each transaction is transparent.  And permanently recorded across all ledgers. It is open for anyone to see. So there is no need for third-party verification. 

    Blockchain technology will disrupt the way we write. And enforce contracts, execute transactions, and maintain records.

     

  • Blockchain ‘Interesting’ But Hyped

    Blockchain ‘Interesting’ But Hyped

    Blockchain not the best technology for every considered use, says Australian government report.

    2 min read

    Australia: Blockchain 'Interesting' But Hyped
    What a change!

    In May, Australia’s Department of Home Affairs revealed a plan to investigate blockchain’s potential to bring secure and transparent international trade and supply chain management.

    The chief digital officer of Digital Transformation Agency (DTA), Peter Alexander said: “Blockchain: Interesting technology but early on in its development, it’s kind of at the top of a hype cycle.”  Alexander said at a parliamentary committee meeting on Tuesday, as reported by ZDNet.

    He was further quoted as saying that most of the hype comes from companies seeking to make profits in this area.

    “It’s not that we don’t trust any of the vendors – that would be an unfair characterization – we trust the vendors, but note that the motivation is general sales and making revenue.”

    He said standardization of blockchain might open up more opportunities for its use in providing government services.

    “We’re not saying that blockchain doesn’t have potential but today, without standardization, there is the challenge of blockchain becoming a little fragmented. When we get to the standardized blockchain then the opportunities for it will grow.”

    There is better technology?

    Alexander continued, saying that, “for every use of blockchain you would consider today, there is a better technology.”
    According to InnovationAus.com. Alexander said that one of the defining features of the blockchain, the potential for anonymity, is among the biggest stumbling blocks.

    “Generally speaking when the government is engaging with someone, we want to have a trusted relationship with them. We want to know who they are and give them a personalized service,” he said. “Blockchain is good for low-trust engagement. You don’t know who you’re dealing with but have a series of ledgers that can give some validation and support.”

    Peter Alexander, the CDO at DTA said the technology is worth keeping an eye on but is not yet mature enough.

    According to Alexander, blockchain is at the “top of the hype cycle”, with demand driven by the industry.

    “It would be fair to say that a lot of the big vendors are pushing blockchain very hard. And internationally most of the hype around blockchain is coming from vendors and companies. Not from governments and users and deliverers of services,” he said.

    Interesting timing 

    It is indicated to this opinion was arrived at after the Australian government’s Digital Transformation Agency (DTA) received  AU$700,000 (about US$500,000) from the government in May. That amount came to explore blockchain applications within government services. 

    The Australian government’s DTA has cast doubts over the validity of blockchains for governmental purposes. The agency has been working with a number of government agencies. They wanted to develop prototypes for the use of blockchain to deliver services. Including with the Department of Human Services for welfare payments and cargo settlement.

    On the other side is Australia’s new prime minister, Scott Morrison. He is a fan of fintech, open banking and technologies such as blockchain that will drive Australia’s future.

    As treasurer,  Morrison urged attendees at the Australian Fintech Awards in early August 2018. He wanted to take advantage of the disruption wave sweeping through the global economy.

    “I am frankly counting on you not to stuff this up. You need to make this work…In today’s global economy, the ability for economies to become more productive is not being done the old way: the biggest transformer of productivity [will be] innovation,” he told attendees at the awards, as reported by the Australian Financial Review.

    Unfortunately, Australia is not an isolated case.

    China is another nation that finds blockchain’s anonymity a problem. Earlier this year Chinese students encoded allegations of sexual harassment against a prominent professor on the Ethereum blockchain. They wanted to evade the country’s censors. All social media posts on the issue having been blocked. The same technique was used to spread the news about low quality and counterfeit vaccines, another scandal the government sought to cover up.

    China banned crypto

    But the Chinese government has drafted a new regulation. That ordinance would require users to provide their real names and national ID card numbers when registering for a blockchain service. The policy would also demand that blockchain services remove ‘illegal information’. And before it can be spread among users. Also under the proposed legislation. Service providers would also have obligation to retain backups of user data for six months.  Of course, and to hand it over to the police on request.

    China also banned cryptocurrency trading earlier this year, although. Apparently, this has been less than effective. The Ethereum Hotel recently opened in the country, accepting payment in cryptocurrencies.

    One note to remember. Without the possibility of anonymity, a permanent ledger could also be a powerful tool in the authoritarian regime’s surveillance and control systems.
    Australia: Blockchain 'Interesting' But Hyped 1

    Unlike Australia and China, UK leads the way in blockchain deployments for the supply chain.

    There is some survey conducted by consultancy Capgemini. They researched 450 organizations implementing blockchain in their supply chain. And the result wasn’t surprising.  Only three percent so far took initial experiments into production at scale. Well, the adoption and the technology itself are at an early stage. The Capgemini report identifies a number of current use cases. They are in the range from low complexity/high adoption scenarios. Like the prevention of counterfeits and tracking asset maintenance, for instance. But also more ambitious and complex uses. Like customer loyalty programs, contract labor procurement, and regulatory compliance, for example.

    United Kingdom example

    The UK currently leads the way with production and pilot implementations of blockchain projects in the supply chain. At the same time, the USA leads in terms of funding blockchain initiatives.

    In the UK specifically, the consumer products vertical is the biggest adopter among those surveyed. It is followed by manufacturing and then retail. However, globally manufacturing is in the leads in adopting this technology.

    Capgemini has been working with blockchain technology since 2016. Then it began developing solutions for the financial services industry. The report predicts that experimenting with blockchain will peak in 2020. But it will enter mainstream supply chain usage by 2025.

    While throughout the history there were numerous cases of unfounded fears of new technology. For many potential uses, the blockchain is not mature enough. Or lacks the functionality. Or there is the issue of the anonymity of users.

    On the other hand, this anonymity could inhibit the nefarious motives and actions of less savory governments against their own citizens.

    We will see in which direction the further development of blockchain will go. There is one solid fact: blockchain will survive.

    Risk Disclosure (read carefully!)

     

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