Blockchain and business: Looking beyond the hype

The term blockchain can elicit reactions ranging from a blank stare (from the majority of the general public) to evangelical fervour (from over-enthusiastic early adopters). But most people who know a bit about the technology detect a pungent whiff of hype, leavened with the suspicion that, when the dust settles, it may have a significant role to play as a component of digital transformation.

The best-known example of blockchain technology in action is the leading cryptocurrency Bitcoin, but there are many more use cases — think of blockchain as the ‘operating system’ upon which different ‘applications’ (such as Bitcoin) can run. So, what is a blockchain?

At heart, a blockchain is a special kind of database in which ‘blocks’ of sequential and immutable data pertaining to virtual or physical assets are linked via cryptographic hashes and distributed as an ever-growing ‘chain’ among multiple peer-to-peer ‘nodes’. Additions to the blockchain can only be made after validation by a majority of nodes using a consensus mechanism, the two main ones being Proof of Work (PoW) and Proof of Stake (PoS), after which the new blocks are distributed to all nodes. At the moment, PoW is the most common consensus mechanism, the best-known example being Bitcoin mining by solving cryptographic puzzles. However, PoS is less costly in terms of computing resources and electricity, and can deliver faster throughput.

A blockchain is therefore a cryptographically secure distributed ledger in which each node has a verified, up-to-date and immutable history of all transactions that have ever taken place among participants that do not necessarily need to trust one another. Validated transactions cannot be altered or tampered with, and can only be reversed by a subsequent transaction.

There are two broad types of blockchain networks: ‘permissionless’, which anyone can join; and ‘permissioned’, in which participants are authenticated by whoever is running it. The latter can be further divided into ‘private’ and ‘community’ blockchain networks — a single enterprise versus a group of companies involved in a particular business process, for example. In permissionless blockchains, like those underpinning Bitcoin or Ethereum, more reliance is placed on consensus mechanisms to confirm identities and validate transactions.

Business rules that govern what happens to assets during transactions are known as smart contracts, which form a link between decentralized applications (or dApps) and the blockchain itself. Ethereum is the leading example of a smart contract-based blockchain system. The linkage of virtual or physical assets to digital tokens is called tokenisation, while the process of raising funds by offering a new cryptocurrency or token in exchange for traditional currency, or an existing cryptocurrency like Bitcoin, is called an Initial Coin Offering or ICO.

Read more at zdnet.com

Image Credit:  Zdnet

News This Week

Frank Boehm (NA CEO) signs with IOP for Book on Nanomedical Brain/Cloud Interface

NanoApps Medical Inc. CEO Frank Boehm has signed with IOP Publishing to produce Nanomedical Brain/Cloud Interface: Explorations and Implications - a book that will explore the notion of a nanomedically enabled Brain/Cloud Interface (B/CI). [...]

Who owns what in outer space?

In 2015 Congress passed a law to legalise mining in outer space—the first of its kind in the world. Firms that some day manage to mine asteroids for resources like water or precious metals [...]

Public, permissionless blockchains and the EU’s GDPR: The coming clash between technology and the law?

From a blog by VALID advisor Christian Sillaber, Senior Researcher on IT-Security The European Union’s General Data Protection Regulation (GDPR) came into effect on May 25, 2018. It is already clear that the new [...]

Women in Tech 2018: What the Statistics Tell Us

From an article by Ludmila Morozova-Buss on TechNative: Women have played a role in computer technology since its inception. Many credit Ava Lovelace as the first computer programmer, in a time before computers even existed, [...]

Minimalist biostructures designed to create nanomaterials

Researchers of the Institute of Biotechnology and Biomedicine (IBB-UAB) have generated four peptides, molecules smaller than proteins, capable of self-assembling in a controlled manner to form nanomaterials. The research, published in the journal ACS [...]

Nanophotonic System Translates Molecules into Bar Codes

EPFL scientists have developed a unique system that can be used for detecting and analyzing molecules with very a level of high precision and without using any bulky equipment. This latest development paves the [...]

Squeezing light at the nanoscale

Researchers at the Harvard John A. Paulson School of Engineering and Applied Sciences (SEAS) have developed a new technique to squeeze infrared light into ultra-confined spaces, generating an intense, nanoscale antenna that could be [...]

Breakthrough in controlling DNA-based robots

Researchers have devised a magnetic control system to make tiny DNA-based robots move on demand -- and much faster than recently possible. In the journal Nature Communications, Carlos Castro and Ratnasingham Sooryakumar and their [...]

2018-06-02T11:52:47+00:00

Leave A Comment