Throughout this book and everywhere you turn to, you have heard insurmountable praises to the blockchain system and technology. This must have you questioning the praises, is blockchain the future? Does it have other real world applications other than bitcoin and the cryptos or is it all just fluff? Through this chapter, we will explore the different possibilities of the technology and how it may affect or in its entirety change our lives as we know it. We will see how it serves its purpose pushing the envelope further than just improving our databases.
The first and perhaps the most inevitable use the blockchain would be in the elimination of the middlemen and the intermediaries in many of the industries that we currently depend on to ensure successful transactions. Using the smart contract blockchain technology, intermediaries in our business processes such as banks and trustees must now identify a greater value proposition. This is as a result of the price of trust has significantly reduced following smart contracts that are providing seamless and efficient price discovery mechanisms to support it. This decentralization of the exchanges will render 3rd party intermediaries obsolete.
In the blockchain horizon, we can also see that use of this technology in data storage is nigh. In today’s world, we have only known centralized cloud storage and what does this do to the consumer that is you and me? This subjects us to no other option but to place our trust on a singular storage provider and hope that they will uphold the terms of our agreement and manage our digital assets and information. Furthermore, the blockchain has created the path and opportunity to have cloud storage decentralized as well. For example, there has been the emergence of a blockchain powered cloud storage network named Storj. Storj is hoping to harness the power of this technology to enhance the security and decrease dependency when it comes to cloud storage. The hashing and decentralization of your data are the truest paths to securing it. This innovation has in itself opened up a new world of possibilities where one can rent out their excess storage to other users in the network. So is this cloud storage meets user? Only time will tell.
For every $3 spent, a third of that cost is going to ad-fraud. This has led to security costing the industry figures in the upwards of $81 million every year. But what if, your digital security can be forever secured and concern over it becomes a thing of the past? Blockchain technology might be the vehicle that takes us to this future. It will help in managing and tracking our digital identities for us. This will make the system exponentially efficient with an increased degree of security mitigating digital fraud as we know it. This function furthermore is not only limited to one industry but will have applications across industries from e-commerce to banking and insurance notwithstanding health care and government operations and processes.
Data breaches and large scale hackings have led to private and secured information to be compromised. Blockchain technology might be the solution to our digital security. It offers a platform where identity can be distinctively verified in a secure manner impermeable to corruption or distortion. The technology currently in place is making use of a system of passwords. Use of authentication processes employing the use of blockchain and digital signatures to verify identity is the future of digital security on public blockchains. The only check conducted in this system is if the transaction was sanctioned by the precise private key. The identity of the proprietor is deemed immaterial making assumptions that he is the only one with access to the private key.
There will be increased use of legally binding virtual contracts that will become entries in the blockchain network. They shall be called smart contracts. This is so because they will be automated and bears the ability to self-execute themselves. They shall act as in escrow holding entities that will perform certain functions dependent on a preset condition eliminating the need to involve a central authority to act as an executor of the agreement.
Innovation in the use of the blockchain is not in the near future slowing down. We can see companies constantly exploring nf=ew terrains in the development of the use of the blockchain to ease everyday life as we know it. One such example is a company called Colu. The Israeli company has been inscribing metadata on varied proportions of bitcoins. Their end goal in this exercise is to transform them as a store of wealth and as a depiction of real world assets, for instance, ownership of a piece of real estate.
While much of the development and funding related to Bitcoin has been directly tied to blockchain and Bitcoin, Bitcoin has already moved from its essence of being a peer-to-peer payment system. The innovations that we are speaking about is in testing in the development of altcoins, additional blocking and programming platform.
Bitcoin network as an open source project and the Blockchain technology at its root are sure to “forking”; forking is the process of changing the source code of the Bitcoin to create a new project that is different and provides limited Bitcoin backward compatibility with itself. Between 2012 and 2014, the creation of alternative payment solutions or the so-called “altcoins” were similar to Bitcoins, with most of the e improvements having no impact as it was thought. The difference between Bitcoin and altcoins has been limited, for instance, Litecoin offers a fast block confirmation times than Bitcoin, and Dogecoin has an inflationary money.
Certain altcoins like the same coin offered better purpose-backed forks. No altcoin has emerged as a true peer to Bitcoin from metrics on adoption to market size. On paper, a new altcoin could overcome the network effect that Bitcoin has either through the offering go far better features that are not easily incorporated into Bitcoin or through a failure identified in the Bitcoin source code or network.Altcoins still serve as a testing ground for new concepts even on absent significant market share, in this emerging technological field, resulting in Bitcoin improvement proposals to incorporate these concepts. Altcoins may become even more powerful if generated with Blockchain concepts or programming platforms that are developed by financial intermediaries.
Over the past 3 years, there has been a rising discussion about projects that are looking at combining Bitcoin technology with advanced programming platforms/ these projects aim to make Blockchain and Bitcoin technology more scalable for advanced uses. These projects are referred to as Blockchain 2.0 and Bitcoin 2.0 .some of this programs include Ethereum which aims to create a complete Turing programming framework that is supported by an autonomous altcoin platform. Counterparty aims are doing the same thing using programming layer built on top of Bitcoin Blockchain.Blockstream aims to make Bitcoin compatible with sidechains which are alternate blockchains and their respective altcoins by allowing pegged transaction if information and assets. Several other projects, which utilize Altcoins and Bitcoin are in development and have begun to receive substantial funding and public attention.
To add to it, financial intermediaries like UBS and Barclays are experimenting with Blockchain technology. This kind of experimentation includes leveraging the discussed implementation and developing private test cases of blockchains.