Blockchain Evolution| Critical qualities of Blockchain| Blockchain Revolution/blockchain-insights/blockchain-evolution

From the Internet of Information to the Internet of Value

While the last few decades in the technological sphere were characterized by the conjunction of communication and computing technologies, the second era revolves around the combination of mathematics, behavioral economics, and cryptography. The Blockchain promises to disrupt industries and upend business models like the internet just before it – by creating more value.

When Evolution changed to a Revolution

We’re undoubtedly in the middle of a ‘quiet revolution’ brought about by the Blockchain. As the year is progressing and we are about to see more advances in the technology, here’s a brief history of Blockchain and how it has come so far-

  • The first innovation was an experiment in the digital currency sphere, Bitcoin. Of the top 5 cryptocurrencies across the globe, Bitcoin cash has witnessed the most notable gains. With the collective market capitalization of around $15bn, it is used by more than a million people today for payments.
  • The realization of separating Blockchain from Bitcoin and using it for other tasks revolving around the interorganizational cooperation was what gave birth to the second innovation. Many banks are involved in the Blockchain research and around 20% of them are expected to embrace Blockchain by 2018.
  • The rise of ‘smart contract’ is regarded the third innovation. Incorporated into a Blockchain based, open software platform, Ethereum, Smart Contract can build various computer programs into Blockchain directly, allowing the representation of multiple financial transactions including bonds/loans rather than just the cash-like bitcoin tokens. The Ethereum Smart Contract has a market size of around a billion USD today.
  • The ‘Proof of stake’ or the PoS, takes the position of fourth innovation. However, current Blockchains operate on ‘Proof of Work’, which enables a person/group with the largest computing power to take decisions. Often known as ‘miners’, these groups operate huge data centers and provide security in exchange for payments in the form of Cryptocurrencies.

Unpacking the critical qualities of Blockchain

  • The underpinning technology for Bitcoin, each Blockchain is distributed and runs on systems provided by the volunteers across the globe. No central database rules out the possibility of a hack or simply a shut down.
  • It is encrypted. To maintain virtual security, it leverages heavy encryption comprising both private and public keys.
  • It resides on a network rather than an institution tracking and auditing records. It has always been orchestrated in an open-source format, wherein, anyone can download it to develop groundbreaking tools for handling transactions online.
  • Within a few seconds, transactions are verified, secured, and stored in a safe block that is connected to the previous block, therefore, creating a chain. To be valid, each block should mention the preceding block. This structure, stores the precise exchange of values, averting anyone from doing any alterations in the ledger.

Blockchain technology - Future or just a fad?

The technology that has gone beyond Cryptocurrencies in its nascent stage is expected to do wonders in the future. There’s no denying that finance sector is likely to be dominated by the Blockchain technology. While central banks are gearing up to leverage Blockchain, and government organizations are looking to use the technology to distribute social welfare, it’s evident that Blockchain is not a fad. It’s catching on and is expected to become mainstream in the coming years.