Home Blockchain Blockchain 2.0 – An Introduction [Part 1]

Blockchain 2.0 – An Introduction [Part 1]

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Blockchain 2.0 - The next paradigm of computing

The Blockchain is now easily distinguishable as a transformational technology poised to bring in revolutionary changes in the way people use the internet. The present series of posts will explore the upcoming wave of Blockchain 2.0 based technologies and applications. The Blockchain is here to stay as evidenced by the tremendous interest in it shown by different stakeholders.

Staying on top of what it is and how it works is paramount to anyone who plans on using the internet for literally anything. Even if all you do is just stare at your friends’ morning breakfast pics on Instagram or looking for the next best clip to watch, you need to know what this technology can do to all of that.

Even though the basic concept behind the Blockchain was first talked about in academia in the 1990s, its prominence to being a trending buzzword among netizens is owed to the rise of payment platforms such as Bitcoins and Ethers.

Bitcoin started off as a decentralized digital currency. Its advent meant that you could basically pay people over the internet being totally anonymous, safe and secure. What lay beneath the simple financial token system that was bitcoin though was the BLOCKCHAIN. You can think of Bitcoin technology or any cryptocurrency for that matter as being built up from 3 layers. There's the foundational Blockchain tech that verifies, records and confirms transactions, on top of the foundation rests the protocol, basically, a rule or an online etiquette to honor, record and confirm transactions and of course, on top of it all is the cryptocurrency token commonly called Bitcoin. A token is generated by the Blockchain once a transaction respecting the protocol is recorded on it.

While most people only saw the top layer, the coins or tokens being representative of what bitcoin really was, few ventured deep enough to understand that financial transactions were just one of many such possibilities that could be accomplished with the help of the Blockchain foundation. These possibilities are now being explored to generate and develop new standards for decentralizing all manners of transactions.

At its very basic level, the Blockchain can be thought of as an all-encompassing ledger of records and transactions. This in effect means that all kinds of records can theoretically be handled by the Blockchain. Developments in this area will possibly in the future result in all kinds of hard (Such as real estate deeds, physical keys, etc.) and soft intangible assets (Such as identity records, patents, trademarks, reservations etc.) can be encoded as digital assets to be protected and transferred via the blockchain.

For the uninitiated, transactions on the Blockchain are inherently thought of and designed to be unbiased, permanent records. This is possible because of a “consensus system” that is built into the protocol. All transactions are confirmed, vetted and recorded by the participants of the system, in the case of the Bitcoin cryptocurrency platform, this role is taken care of by miners and exchanges. This can vary from platform to platform or from blockchain to blockchain. The protocol stack on which the platform is built is by definition supposed to be open-source and free for anyone with the technical know-how to verify. Transparency is woven into the system unlike much of the other platforms that the internet currently runs on.

Once transactions are recorded and coded into the Blockchain, they will be seen through. Participants are bound to honor their transactions and contracts the way they were originally intended to be executed. The execution itself will be automatically taken care of by the platform since it’s hardcoded into it, unless of course if the original terms forbid it. This resilience of the Blockchain platform toward attempts of tampering with records, permanency of the records etc., are hitherto unheard of for something working over the internet. This is the added layer of trust that is often talked about while supporters of the technology claim its rising significance.

These features are not recently discovered hidden potentials of the platform, these were envisioned from the start. In a communique, Satoshi Nakamoto, the fabled creator(s) of Bitcoin mentioned, “the design supports a tremendous variety of possible transaction types that I designed years ago… If Bitcoin catches on in a big way, these are things we’ll want to explore in the future… but they all had to be designed at the beginning to make sure they would be possible later.”. Cementing the fact that these features are designed and baked into the already existing protocols. The key idea being that the decentralized transaction ledger like the functionality of the Blockchain could be used to transfer, deploy and execute all manner of contracts.

Leading institutions are currently exploring the possibility of re-inventing financial instruments such as stocks, pensions, and derivatives, while governments all over the world are concerned more with the tamper-proof permanent record keeping potential of the Blockchain. Supporters of the platform claim that once development reaches a critical threshold, everything from your hotel key cards to copyrights and patents will from then on be recorded and implemented via the use of Blockchains.

An almost full list of items and particulars that could theoretically be implemented via a Blockchain model is compiled and maintained on this page by Ledra Capital. A thought experiment to actually realize how much of our lives the Blockchain might effect is a daunting task, but a look at that list will reiterate the importance of doing so.

Now, all of the bureaucratic and commercial uses mentioned above might lead you to believe that a technology such as this will be solely in the domain of Governments and Large private corporations. However, the truth is far from that. Given the fact that the vast potentials of the system make it attractive for such uses, there are other possibilities and features harbored by Blockchains. There are other more intricate concepts related to the technology such as DApps, DAOs, DACs, DASs etc., more of which will be covered in depth in this series of articles.

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Basically, development is going on in full swing and its early for anyone to comment on definitions, standards, and capabilities of such Blockchain based systems for a wider roll-out, but the possibilities and its imminent effects are doubtless. There are even talks about Blockchain based smartphones and polling during elections.

This was just a brief birds-eye view of what the platform is capable of. We’ll look at the distinct possibilities through a series of such detailed posts and articles. Keep an eye out for the next post of the series, which will explore how the Blockchain is revolutionizing transactions and contracts.

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