Blockchain is being touted around the world as a disruptive technology that could revolutionize finance, trade, legal systems, digital media, and much more. But blockchain tech has one big obstacle: it’s hard to wrap your head around.
To help laymen better understand blockchain, we reached out to Bitcoin experts around the globe. We issued each of them a challenge: explain blockchain in 150 words or less. As it turns out, even they can struggle to explain blockchain in simple terms.
Blockchain tech is fairly complex, so condensing it down into a one or two paragraphs is no easy task. Comparitech took a stab at the challenge as well, but in video form. Here is our animated explanation of blockchain in less than 150 seconds.
And here are 10 explainers from our gracious experts. We’ve ordered them as best we can from simple and plainly worded to complex and thorough.
Ron Hose, founder of Coins.ph
The Blockchain is a decentralized ledger. In the same way the internet facilitates direct exchange of information (think Skype, WhatsApp vs. traditional telco model), Blockchain facilitates direct exchange of value between parties, without the need for a trusted intermediary.
Drew Ivan, Healthcare Solution Strategist
Blockchain is an immutable, public, distributed ledger that anyone can read or write. Here’s a breakdown of what that means.
IMMUTABLE – data written to a blockchain can never be changed, so readers can be sure it was never altered.
PUBLIC – data on a blockchain is visible to everyone, which makes it perfect for storing public records like bitcoin transactions, land titles, and asset tags.
DISTRIBUTED – unlike a centralized ledger that is kept by a trusted institution, blockchain runs on an entire network of computers, meaning there is no single system that can fail or be compromised.
LEDGER – blockchain is suited to storing small transaction records, not large files.
Taken together, these characteristics allow two parties to trust one another based on the strength of the blockchain network without the need for a third party institution like a bank or government.
Jameson Lopp, Software Engineer at BitGo
A blockchain is a history of events (transactions or otherwise) that uses cryptography to link timestamped batches of events together in order to make it evident if tampering has occurred. This type of data structure enables the creation of new applications that use a blockchain as a trustworthy public database. The first major usage of a blockchain was in Bitcoin as a currency, but many non-payment applications are now being developed on top of Bitcoin and other systems such as Ethereum. Eventually you can expect blockchain-based systems to be used under the hood to power applications that enable users to prove and transfer ownership of digital and physical assets.
Andy Singleton, founder of MAXOS.ai
Bitcoin is a database or “ledger” that shows how much money you have in bitcoins. It simplifies a lot of things because the database is shared. You don’t have to make a special request to your bank to find out how much money you have. It’s all visible in the shared database. You can transfer this money with a digital signature – a sort of instant check. This is a lot faster than a wire transfer where multiple banks have to update multiple databases and then check or “reconcile” them over the course of several days. This type of shared database or “blockchain” will also greatly simplify stock records and trades, tracking and paying for goods, paying musicians for their music, and even medical records. We won’t have to call around to find out where the goods are, when the stock will arrive, or who played what music.
Anatoliy Okhotnikov, financial and cryptocurrencies expert at SoftJourn
Blockchain is an open decentralized database – a distributed ledger. Every participant on the network has a copy of the transaction ledger. Ledger entries are secured by strong cryptography and each transaction must be agreed to by the most of the participants in order to make it into the ledger. This allows for better security, transparency, and trust. Blockchain is a disruptive technology in a sense that it can be used to store any value information like money, goods, property, work, or even votes without the need of a central authority to verify or prove it. The authenticity is verified by the entire community, by everybody who has a copy of the ledger. Cryptography makes sure it is not possible for a single individual or minor group to tamper or forge the ledger records. The future economy is seen to be moving to a distributed and trusted environment and the possibilities with blockchain are endless.
George Harrap, founder of Bitspark.io
Blockchains are a ledger that keeps track of data and the owners of the data. One can use a blockchain to transact data between any connected participant using the blockchain and all participants have the most up to date version of that ledger, ensuring everyone is constantly up to date with the latest. Usually one needs to trust some third party to maintain records of events, but blockchains enable you to transact with people you don’t trust and yet still ensure that their inputs into the blockchain are true. Complex cryptography ensures nobody can falsify a record to try to include data which the other participants haven’t seen or agreed to. Blockchains are open for anyone to track the provenance of the data and simple to audit with no single point of failure by design.
Thomas Glucksmann, Head of Marketing at Gatecoin
Blockchain is an open source value transfer protocol that runs on a distributed peer to peer network and secures transaction records through cryptography. Blockchain was first conceptualized through the release of bitcoin, a decentralized cryptocurrency that stores and verifies transactions on a distributed ledger, known as “the blockchain” designed by a pseudonymous individual or group known as Satoshi Nakamoto.
Since the emergence of bitcoin, many technology and financial institutions have worked to improve upon bitcoin’s blockchain resulting in the development of public and private blockchains, which provide different levels of read and write access to network participants.
Blockchain applications are helping financial institutions to improve the efficiency of many back-office processes through automatic verification, transaction execution and settlement. The technology’s utility extends far beyond finance with use cases for industries as diverse as supply chain to creative rights management that can be disrupted with secure, self-executing trustless value transfers.
Jad Mubaslat, founder and former CEO of BitQuick.co
In 2009, a first-of-its-kind decentralized digital currency program, called “Bitcoin”, was released. Bitcoin utilizes an ongoing immutable cryptographic chain of transactions that acts as a decentralized peer-to-peer ledger. This underlying distributed database has been referred to as “blockchain” technology. All the participants in a blockchain system retain a copy of the ledger, so that if there are any inconsistencies, they will be consolidated against the other copies retained by other participants in the network. In this manner, trust is no longer needed between the entities.
Blockchain can be applied to a variety of use cases where the exchange of value or information is needed between separate entities; this could be the exchange of information in a supply chain, medical information, financial transactions, land ownership and more. Blockchain technology may enable solutions where data can be shared in a distributed manner that increases interoperability, security, immutability and privacy.
Andrew Hinkes, Esq., Partner at Berger Singerman LLP
The Bitcoin Blockchain is a decentralized peer-to-peer network operated over the Internet that relies upon cryptography (called “proof of work”) instead of a trusted third party to confirm transactions of bitcoins between network participants, and that tracks confirmations of those transactions on by circulating constant updates to a chronological ledger of transactions among its participants. A “blockchain” (also called private blockchain, or distributed ledger) is a version of Bitcoin’s blockchain used to control and track transactions of other data. Private blockchains typically rely on a trusted third party or other method of confirmation instead of participant consensus to confirm a transaction. Although both Bitcoin’s Blockchain and private blockchains share may attributes (both are relational databases), the Bitcoin Blockchain’s consensus mechanism makes it economically infeasible to retroactively change the ledger, while private blockchains typically use different confirmation mechanisms that do not offer the same protection.
Marc Kenigsberg, founder of BitcoinChaser
A distributed database composed of a network of interconnected computers that are used to keep a distributed ledger of information. Information exchanges between computers in this kind of database, take on the characteristics of a transaction. These computers use the connection between them to validate these transactions according to a set of parameters, using different kinds of encryption to protect them. As a result, information security on these databases depends on validating data on various computers simultaneously.
This type of decentralized database allows for the programming of smart contracts, essentially complex conditional statement that allow the network to react to predetermined inputs in an autonomous nature without the need for human intervention. The parameters that govern this type of network, will determine the degree to which information is publicly accessible, and the speed at which it travels between computers.
Original article link: https://www.comparitech.com/blog/information-security/what-is-blockchain-experts-explain/
UAE retail banking giant Emirates NBD will introduce blockchain technology into cheques to minimize fraud and strengthen their authenticity.
Announced this week, the banking group has launched the pilot phase of its initiative titled ‘Cheque Chain’. According to the bank, the ‘initiative is the beginning of a significant strategy by Emirates NBD to integrate blockchain technology into existing products and services.’
This sweeping adoption of blockchain technology, the bank adds, is to implement the best digital security systems available. Blockchain technology enables an immutable timestamped record of data stored on a decentralized ledger that can be accessed by multiple participants at the same time. The technology does not rely on a single central database, negating fears of a single point of failure and altogether making for a quantum leap in digitized security.
“[I]n exploring the potential of blockchain technology, we are delighted to be the first bank in the country to utilize this remarkable new technology to strengthen and upgrade our internal processes,” stated Emirates NBD Group CEO Abdulla Qassem.
Cheques over a Blockchain
The initial phase of the initiative will see unique QR (Quick Response) codes on every leaflet of a cheque book which immediately makes it harder to forge cheques. Subsequently, the QR code will register every cheque on to the bank’s blockchain .
This allows the bank to validate the cheque’s authenticity at all times, with access to its source even after the cheque is received and cleared.
While details remain scarce, the banking group’s chief executive added:
Cheque Chain will bring an added layer of security to our cheque clearing system, and ensure that each cheque issued will be verified under the bank’s system with its own unique QR code providing significant improvement in cheque security.
In its pilot phase, the bank will push the new cheque books on to its own employhees to assess the technology. A customer rollout will follow later this year.
The effort follows another notable endeavor by the Bank of Tokyo-Mitsubishi UFJ, Japan’s largest bank, which is also testing digitized checks on a blockchain.
In October last year, Emirates NBD became the first UAE private sector bank to trial blockchain-based real-time international money transfer and trade finance transactions with Indian partner bank ICICI. The first transaction aimed for a low-cost, near-instant international remittance transaction. The second, facilitated an international trade finance transaction to import shredded steel melting scrap from Dubai to Mumbai, India. Both pilots proved successful.
Emirates NBD is quick to point out that it is a member of the Dubai Future Foundation’s Global Blockchain Council, which launched in February 2016. Dubai’s largest bank adds that its binge coincides with the Dubai Blockchain Strategy, an sweeping initiative that began with the government’s announcement to see all of its documents on a blockchain by the year 2020.
The price of Ether is skyrocketing.
Investors who bought Ether at the start of the year are seeing 900% ROI. Since my previous blogpost, Ethereum had another leg up, sending the entire crypto market cap close to 40 billion.
What are the factors behind the rise of this blockchain stock?
Where does it go from here?
In this post, we shall explore in depth the possible contributors to Ethereum’s success.
Designed for Something Greater
Before Ethereum even existed, there was Bitcoin. Bitcoin, since its inception in 2008, has been hailed as the most radical development in currency. On 2nd March 2017, and for the first time in history, a digital asset with no intrinsic value climbed above the price of gold. As Bitcoin’s price took the limelight over the years, it was easy to overlook Bitcoin’s underlying blockchain technology—blockchain as a tool of distributed consensus. Vitalik Buterin, however, was one of the early few who saw the potential of blockchain development, and thus Ethereum was born.
Ethereum was not made to compete with Bitcoin. For the most part, Ethereum is a blockchain-based decentralised platform for apps that run smart contracts, and is aimed at solving issues associated with censorship, fraud and third party interference. Ether, also known as ‘gas’, comes in as a necessary element for operating the distributed application distribution platform, Ethereum.
In short, Ethereum does everything that Bitcoin can do, and more. If Bitcoin warrants a market cap of 23.6 billion USD, how much further can the price of Ether go, with Ethereum market cap standing at a mere 7 billion USD?
The Bitcoin Hard Fork Contention
Part of Ethereum’s rise in price and interest could be attributed to the instability of Bitcoin in March, which has quite a bit of a backstory. Due to increasing Bitcoin usage, an increasing number of transactions are getting backlogged. As Bitcoin scurries to resolve this, two solutions surfaced: activate Segregated Witness or increase the block size. Both options tackle the Bitcoin network congestion, but unfortunately, the bigger miners have an interest in the latter: increasing the block size makes it harder for smaller miners to run a node on the network, which encourages centralization. Till now, the Bitcoin scaling issue is still present without a clear plan. Investors who were unsure of Bitcoin’s direction would have hedged into Ethereum, driving up demand for Ether.
The DAO Attack
Bitcoin is not the only cryptocurrency with issues; Ethereum has had its fair share of problems to deal with as well. ‘The DAO’ is a decentralized autonomous organization that raised over 150 million USD, making it the largest crowdfunding in history. On 18th June, a hacker managed to drain 3.6 million Ether from the fund into a ‘child DAO’ by exploiting a loop hole in smart contract terms. Following the incident, price of Ether dropped from 20 USD to 13 USD and below, reflecting the confidence of investors in the Ethereum network. That put the Ethereum Foundation in a tough spot. They do not wish for the smart contracts platform to be viewed as a failure, but if they do intervene to save the funds, they risk a possible reputation damage by not upholding their social contract with their network of independent nodes. In the end, the foundation handled the hack decisively with a swift and clean hard fork that created ETH (Ethereum) and ETC (Ethereum Classic). Nevertheless, the incident left a mark on Ethereum’s once untainted reputation.
The DAO hack might have set back the price of Ether a few months. The dent in the public’s confidence in Ethereum translated into a supressed Ether price much like a coiled spring, until the end of February when the Enterprise Ethereum Alliance (EEA) was announced.
Forming of the Enterprise Ethereum Alliance
The intense bull run of Ether in March is triggered by the announcement of EEA partners. The EEA initiative connects Fortune 500 enterprises and academics to support the development of enterprise-grade revolutionary software based on blockchain technology. The EEA launch saw big names such as Accenture, Microsoft, Intel, JP Morgan and UBS. It was jaw dropping; no one expected a cryptocurrency to receive that level of institutional support. Given that the companies were largely interested in Ethereum as a blockchain technology development platform and not Ether per se, this public display of confidence in Ethereum as the leading blockchain for future businesses was enough to send the price of Ether on a relentless climb.
Ethereum has built a community around developers who are devoted to bringing smart contracts mainstream. Ethereum has its very own language, Solidity, for writing smart contracts with the Ethereum Virtual Machine (EVM). The EVM is the primary innovation of the Ethereum project and can run code in a quasi-Turing complete manner. The Learning resources and code repositories are well documented and easily available on the web. By encouraging knowledge exchange, Ethereum makes developing decentralized apps (Dapps) enjoyable and exciting.
Currently, Ethereum has a huge lead in blockchain development and innovation. With a fast expanding developer base, it is only a matter of time before Ethereum-based Dapps crowd the top crypto scene.
Unlike that of Bitcoin and its clones, the relationship between Ethereum and its Dapps is symbiotic. Dapps such as Golem, which creates a decentralized sharing economy of computing power; Augur, which creates a decentralized prediction market; Melonport, which removes third parties and decentralizes asset management. Instead of in-fighting for a piece of market share in the crypto space, these Dapps seek to add value to our world by having real usage cases, expanding the Ethereum network and reach in the process. It is no wonder that the price of Ether, which acts as the fuel for the network, increases with the proliferation of its Dapps.
All the Pieces Coming Together
It is an exciting year to be holding Ether in your investments. On May 4th, we have Ethereum Naming Service coming online, which will let us bid for URL addresses ending with .eth soon. Next, we have the highly-anticipated EEA conference to announce new corporations coming on board. Then we have the Raiden release, which will make payment in Ethereum fast, scalable, confidential and interoperable. Lastly, we have Metropolitan and Serenity updates, not forgetting the Casper update that will change Ethereum’s protocol from Proof of Work (Pow) to Proof of Stake (PoS) or hybrid PoS/PoW.
If the technical jargon is too much to handle at this point, just remember that lots of good news about Ethereum is coming, all of which will undoubtedly increase the value perception of Ether. Ultimately, remember that the crypto space is still predominantly running on speculation. Ethereum’s road map looks promising and personally, that is enough for me to take an interest in and invest in ETH.
Be it up or down, the crypto investing journey has always been wild and violent.
You have been warned, buckle up and hold on tight. :)
Only a year ago Russia’s Finance Ministry was threatening jail time to anyone using digital currencies.
In a major U-turn, it’s now edging closer to their acceptance as a legitimate financial instrument to open a new line of attack on money laundering.
The authorities hope to recognize bitcoin and other cryptocurrencies in 2018 as they seek to enforce rules against illegal transfers, Deputy Finance Minister Alexey Moiseev said in an interview. The central bank is developing a joint position together with the government on digital currencies, according to its press service.
“The state needs to know who at every moment of time stands on both sides of the financial chain,” Moiseev said. “If there’s a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations.”
While bitcoin isn’t regulated by any government, it has come under increasing scrutiny in some countries as a way to shelter assets from the authorities or launder ill-gotten gains. In China, which has occupied a central role in trading and mining bitcoin in recent years, the three largest exchanges imposed a moratorium on all coin withdrawals in March as the central bank issued new guidelines on their use.
Tracking cryptocurrencies could become the latest tool enlisted in the Bank of Russia’s battle against money laundering, which has seen hundreds of lenders lose their licenses over the last three years. The plan to legalize and monitor bitcoin is taking shape as traditional schemes are drying up, with dubious operations such as fake trades and loans used to move money abroad dropping by half to $771 million last year, according to central bank data.
Bank of Russia Deputy Governor Olga Skorobogatova said in February that the authorities would decide if digital currencies can be considered as asset, cash or security by mid-2017.
Initially, cryptocurrencies in Russia are most likely to be bought via bank accounts in order to make online purchases, with some also acquired as a speculative investment, Alfa-Bank Vice President Oleg Legostev said in comments emailed by the lender’s press service.
Bitcoin rose 1.1 percent to $1,215.85 at 10:09 a.m. in New York on Tuesday. It has gained 28 percent since the start of the year.
Foreign banks have sometimes been swept up in investigations of Russian schemes. Royal Bank of Scotland Group Plc received information requests from the U.K. in March in relation to an alleged money laundering ring that moved money through Moldova and Latvia between 2010 and 2014.
Deutsche Bank AG in January was fined $629 million by U.K. and U.S. authorities for compliance failures that saw the bank help wealthy Russians move about $10 billion abroad using transactions that may have covered up financial crime.
Crime, corruption, and tax evasion spawned at least $211.5 billion in illicit Russian outflows between 1994 and 2011, with illegal transfers reaching $552.9 billion, according to Washington-based Global Financial Integrity.
Bitcoin was the first digital currency to achieve a measure of popularity, thanks to its use of blockchain, an online ledger that tracks and verifies every time the virtual money is used. It’s faced some criticism from those who say the software it relies on is too rigid to gain widespread acceptance, with hipper investors moving on to the more sophisticated record book used by Ethereum.
Original article link: https://www.bloomberg.com/news/articles/2017-04-10/russia-caves-in-on-bitcoin-to-open-new-front-on-money-laundering
by Ameer Rosic
Original article link: http://venturebeat.com/2017/01/08/how-blockchain-is-impacting-clean-energy/
$2.3 million initiative would use security protocol to protect supply chain records.
By DC Velocity Staff
Original article link: http://www.dcvelocity.com/articles/20160104-dutch-team-pushes-blockchain-technology-for-logistics-data/