Thursday, 28 February 2019

What are the fundamentals of Blockchain Use Cases and Cryptocurrency(Bitcoin)?

 
       Bitcoin is a cryptocurrency. It uses the cryptography which is advanced mathematics to essentially ensure validity, security, and the transaction of this currency. Cryptocurrencies are a digital currency and they are not backed by a single authority and a single point of failure that it differs from the conventional currency. There is a network of users help running the process. Another difference is that it's not issued with conventional currency. It is decentralized and distributed. Generally, the government would issue if they need more which would lead to deflation.
       Cryptocurrencies are created using the process called mining. Mining is the process of verifying transaction validity. For ex, Bob sends 5BTC to Joe. This needs to be validated to ensure that Bob did actually send it. New coins are generated as rewards for verifying a certain number of transactions. So, you generally need specific computer hardware like ASIC cards for truly do mining effectively and profitably.
       You can transact only x amount of bitcoins in the future then you want to limit the number of users. Theoretically, there is a way around this and built into the Bitcoin protocol itself. You don't have to transact a whole bitcoin, part of the coin can be transacted as 0.00407BTC whatever that value is wherever you are comparing it whether that's fee a currency or gold that is the amount get transacted. The smallest denomination is 1 Satoshi Nakamoto is equivalent to eight decimal points like 0.00000001 is the smallest coin or denomination of bitcoin that can be transacted any given time. The key feature is something called public ledger. It stores all transactions and is shared by the users on the network. Another feature of this corporate currency is called exchanges and wallets. Exchanges facilitate the sending and receiving of the coin and the wallets essentially store the Bitcoins.
Bitcoin Mining: Bitcoin is a Peer to Peer network and its not controlled by a single authority (government). Miners are rewarded with Bitcoin for solving the mathematical problem and they are not always rewarded. The mathematical problem has been so for is verification and improvement of Bitcoin transaction. This incentive attracts more miners. More miners make the system more robust and secure which leads to more adoption by the public. The bitcoin network automatically changes the difficulty of the math problem that depends on how fast the problem is being solved. So, it just ensures that not being too many coins are being issued. Normal CPU is sufficient for mining, but GPU system works faster at solving the problems. Basically, ASIC(Application Specific Integrated Circuit chips) processor designed for the process of mining.
BitCoin Use: If you don't know how to use Bitcoin effectively, it will useless to you as an individual. The first thing is to create an exchange account from the exchanges like Coinbase , blockchain.info etc., It also acts as a wallet to store, send and receive the cryptocurrency. It is your cryptocurrency bitcoin bank account.
    2. Next, Create your public address like an email. It is a unique id that facilitates public transactions. So, if you want to send some bitcoin, you should share the public address with them and they will send something to it.
   3. You can buy some bitcoin using normal fiat currency. You can do this via exchange and ultimately the exchange which facilitate the process from one currency to another currency that can be fiat currency or cryptocurrency.
 4. Finally, find Online(websites) /Offline(physical store) retailers that accept bitcoin or any other cryptocurrency of your choice that facilitates the usage of cryptocurrency. You can trade the bitcoin via currency to more specific applications and make money from the difference and ultimately to know the market what areas are working.

Blockchain UsesCases: Blockchain is exciting and powerful technology to really be adopted and accepted by the marketplace in the real world. We will focus on the use case that emerged out by using the ATOMIC framework. ATOMIC helps to memorize key blockchain use cases. ATOMIC covers use cases regarding assets, trust, ownership, money, identity, and contract topics. Different kinds of applications and things build with blockchains that will be useful for the industry, for people ,and for business in general.
     The first letter of ATOMIC - A stands for assets so the blockchain can help us secure the assets on a blockchain. T stands for trust. The blockchain is trustless technology. It doesn't require that the users of the blockchain trust each other. O stands for Ownership. it facilitates the proof of ownership, proof of identity and other use cases. M for money. The cryptocurrencies are most prevalent use cases of the blockchain. I for identity. Proof of identity is important use case in block chain. With blockchain, you can legitimate yourself as the person that you actually are. C for Contracts. Smart Contracts are well-known use cases in blockchain technology.

Asset UseCase: With the help of blockchain, digital assets can be created and safely stored on the blockchain. The assets can also be moved different users of the blockchain to facilitate the transfer or change of ownership of an asset.
Example Use Case:
 Colored coins: Colored coins are representations of real-world assets in the digital sphere that facilitate the handling and trade of these assets. Suppose, you bought a car and want to secure the ownership of the car in the blockchain and maybe in the future transfer the ownership of the car without the need to go some kind of intermediary of some kind of legal scholar to facilitate and setup all the paperwork. Now, you could use the blockchain to create the record of owning this car that contains all the information is required. And this record of an asset that you actually possess is a colored coin. It is a kind of digital coin that is colored with all the information of the actual physical asset. In the future, if you would like to trade the car instead of meeting somebody and giving him, you could just reassign the coin that represents your car on the blockchain to another person as a sign of transfer of ownership.The platform called "ColoredCoins" which stores asset meta data to the bitcoin blockchain and focuses on banking applications.

Trust Use Case: The key property of blockchain is that they trustless which means they do not require the users of the blockchain trust each other. Different rules of transactions can be embedded in the blockchain. It means that you can set the rules when creating the blockchain of how users will interact with each other and need to adhere to these rules in order to participate.
    For instance, In the central marketplace that ensured the transactions were being followed through the parties paid each other, the goods were actually exchanged and the central intermediary takes a certain fee in order to make that possible to provide the service. But, In the blockchain, this would not be necessary. So with the marketplace, you will be able to trade goods (physical or digital) without the need for a centralized institution. Open Bazaar is a decentralized marketplace where users can sell physical goods to each other with Bitcoins. It is something similar to eBay or some other similar services where you can sell goods online and the other will buy it and all operating on the blockchain.

Ownership Use Case: Blockchains can be really powerful when it comes to ownership because there can be a medium where proof of ownership can be stored. On a blockchain, you can read and register owners of digital and physical assets. You can use the blockchain for timestamp documents and transactions in order to prove that a given point in time this document has existed or you made some kind of change or amendment of the document. Whatever you register on the blockchain cannot be changed and tampered. First of all, it enables proof of ownership so we can insert proof of ownership in the blockchain that other people can look up and that is irrefutable proof for us.
     A platform called Binded for image copyrights. If you are a photographer you can upload a picture to the platform and then the picture will be stored on the blockchain and you will receive the proof that you are actually the photographer of the picture.
Money UseCase: The advantage of using block chains for money substitute is transaction speed by peer to peer transactions. In bank transfer, there would often take several business days in order for the transaction to be cleared. The blockchain is also protection against quantitative easing. It means that there is no central bank that can decide to just print lots of new bitcoins because of the feel that the economy would need it. The maximum number of bitcoins that will ever exist in the world is fixed. It is set a certain amount and it can never be exceeded without breaking the rules of the system. So we have an inherent protection against inflation and centralized institution floating up the value of your coin for some kind of political reasons or other agenda. The platform called "Bitcoin" is the first blockchain based digital money offering and is positioned in the store of value use case regarding the payments.

Identity UseCases: The beneficial to manage identity on the blockchain is tampered proof records. By setting them up on a blockchain, you can make sure that no other external party intervenes with records that you can put out there on the blockchain. It is a good and sound integer identity management system. Secondly, it can help you to merge online and offline identity systems. Due to the distributed nature of the blockchain, there is inherent trust and security in the identity management system.
    Through the reputation management use case, you can manage your reviews, identity, endorsement and other reputation based service that you may use online and build on the blockchain. Shocard is the identity platform for users and service providers that enable you to engage and make transactions with each other as the identity of your counterparty is verified by the platform.

Contracts Use Case: Blockchains can be helpful in order to enforce the contract. You can code the contract that is enforceable without relying on a third party organization. It directly agrees something on other person and then write the contract program in a way that contract is carried out automatically when certain conditions are met. In order to know the contract met certain conditions, you need to use something called "Oracle". It takes data from some kind of external data source and based on the input that is delivered to the contract in that way the contract is doing certain things based on the program.
     One use case is peer to peer lending, You could lend another person money and write a smart contract that clearly defines when the other person needs to make repayments that you can agree on the smart contract and making an active transfer but this can automatically handle by the blockchain. BlockStream is an infrastructure platform that enabling the smart contracts and you will also find scaling initiatives.


Friday, 15 February 2019

How Blockchain Technology propelling Businesses?


      BlockChain is the new technology to store and manage data across the internet and other computing networks. BlockChain or Distributed Ledger Technology(DLT) was created as a result of the introduction of Bitcoin CryptoCurrency. Fundamentally, it is not a complex technology, but it enables complex solutions. Blockchain technology can be used as a foundation for new generation software distributes code that enables a transaction between individuals and machines without the need for complex infrastructure. It is a peer to peer network architecture that all participants are equal in the role on their network. It does not just offer a new way to manage databases and support trust, but it creates new opportunity. For example, If you are a professional photographer and you register your photographs on the digital blockchain, it will be difficult for someone else to claim that they took the picture.
      Blockchain changes the world that is working right now. It means to increase trust and efficiency in the exchange of almost anything. The blockchain is the shared distributed ledger that facilitates the process of recording transactions and tracking assets in the business network. Assets can be tangible assets that basically respect to house, car, cash or land and intangible assets like patterns, copyrights, or intellectual property. Virtually, anything of value can be traded and tracked on the blockchain network reducing the risk and cutting the cost it is involved.
     In real-world uses the blockchain beyond its original use for bitcoin. There is a great interest in technology that helps to track stolen diamonds, in adding to knowing whether the diamond is associated with conflict zone. A startup called "Everledger" has begun to use the blockchain to store information on almost the million diamonds. Each diamond is scanned to glean 40 unique points that are condensed into a digital footprint. Each time, a diamond moves from a seller to buyer, a new block is created and over a secure digital trail of ownership is established. This adoption of this solution is growing and Everledger is attracting attention from investors.

The Concept of BlockChain:  Blockchain architecture gives participants the ability to share in their
joy and updated through peer to peer application. Peer to Peer application means that each participant is connected to other participant and nothing is centralized. It is like all the participants are equally responsible for the network. It is the main functionality in the distributed ledger. It also means that each participant in the network as the subscriber and publisher.
Features: Blockchain Technology has important features like,
* Each node can send or receive the transaction to the new one and the data is synchronized across the network as it is transferred. It is economical and efficient because it eliminates the duplication of effort and reduces the need for intermediaries.
* Blockchain network has a key characteristic called consensus. For a transaction to be valid, all the participants must agree on its validity and when it comes to provenance, participants know where the asset came from and how its ownership has changed over a period of time.
* Once the transaction is completed, it can not be changed. This feature is called immutability. No participant can tamper at the transaction after it is recorded on the ledger. If the transaction is an error, a new transaction can be used to reverse the error.
* The major feature is Finality. A single shared ledger provides one place to go to determine the ownership of an asset or the completion of the transactions.

Transaction in BlockChain: Basically, Every transaction data is represented in such a way of block in the blockchain. It also stores the transaction data. As the number of transaction grows so does the blockchain block record and confirms that time and sequence of transactions which are
locked into blockchain discreetness rules. Basically, each blog contains a hash as you see the hashes that are nothing but digital fingerprint or unique identifier stamp batches of recent valid transactions and the hash of the previous block is stored over here. The previous blocks link to the blocks together that prevent any blocks altered or block being inserted and tampered in a specific way. So, once the transaction is committed, it can not be changed the databases or messaging technology, or transaction processing of business. It is the proof of evidence of work in the blockchain. This benefit is far beyond traditional databases.
    There are 4 important concepts in BlockChain. Those are,
    1. Shared Ledger: It is a system of record with a single source of trick and shared among all participant in the net. Each participant has a duplicate copy of the ledger and the participant can only see the transactions they are authorized to view.
  2. Permission: It is the authority that is given to the nodes in the blockchain. In the permission blockchain, Each participant has a unique identity which enables the user for the constraint network participation and access to the transaction details. Permission blockchain is effective in controlling the data for confidentiality and anonymity.
  3. Consensus: In Business Network whose participants are trusted. Transactions can be verified and come to ledger through various means of consensus. It means, there are certain defined protocols loaded in blockchain and you have to follow the particular protocol and that we call as a consensus. It includes a multi-signature and proof of state which is useful to validate the transaction.
4.  Smart Contracts: Smart contract is a digital agreement or set of rules that govern the business transaction which is signed by both parties who are undertaking the particular transactions. It is stored on a particular blockchain and executed automatically as part of the transaction. The smart contract may have many contractual classes that can be partially or fully or self-executing.
    The main purpose is to provide security superior to the traditional contract but reducing the cost and delays in traditional contracts. A smart contract may find certain digital contractual conditions. It is like the set of digital signatures which takes place within the party. They agree on the particular agreement or digital agreement, later they can perform the necessary transactions which is needed.
    These four concepts will be going through whenever we will be creating the blockchain.

WorkFlow in BlockChain:  Blockchain is the new database. Instead of a single database residing on a single server in the data center, the blockchain database is installed on an individual computer used by the people. In fact, the identical database is installed in every computer of every user of that database. It is called as a distributed database. In order to create a new entry in the distributed database, all participating company must agree to the change and the consensus must be reached.
      Basically, the transaction in the blockchain is designed in such a way that the block has been taken as a transaction and this transaction is checked and verified whether it is valid or not. If it is valid, it is taken inside the blockchain network and it is considered as an importer. If it is invalid, then it is again sent to the particular client or exporter.
      When analyzing the business aspects of the blockchain, the business has multiple sources of friction. The institution and instruments of trust emerge to reduce risk in business transactions. Still, many business transactions remain inefficient, expensive and vulnerable. Blockchain Technology has the potential to remove market friction. Market friction is nothing but the speed bumps that throttle or stop the business. It is anything that impedes the exchange of assets or adds cost or delays such as taxes, regulations, bureaucracy, fraud, an involvement of intermediaries, delays in executing contracts and so on. Various types of market friction impact different industries in different ways in varying degrees that drag the global issues in trade of showing business or stopping it. Here are the various types of Market Friction eliminated by Blockchain Technology,
   * Information Friction: - Participants in a transaction don't have access to information. Giving one party unfair at an advantage, the information may also have been incorrect or inconsistent leading to bad decisions or delays while reconciling it. This incurs costs and damage brand reputation.
       By including the shared ledger who has the information shared among the network reduces the information friction and permissions help certain people conduct the transactions. Also, various types of cryptographic methods with advanced permissions that ensure privacy on the network to preventing unauthorized access of transaction details and deterring the fraudulent activity.
   * Interaction Friction: - Business transactions take days or costly to manage via intermediaries are the prime candidate for disruption by nimbler components. It is often managed by the number of interactions required.
       Blockchain peer to peer architecture reduces the number of interactions or the parties which are required to execute particular interaction. Blockchain consensus shows that all the transactions are validated before being appended to the block and it is highly tampered resistance. Smart Contracts which are nothing but a digital signature that will help you the interactions, or reducing the interactions friction.
  * Innovation Friction: - It is an internal or external type that compromises the organization ability to respond particular value for reducing the cost and delays in regulatory processes. So, the automation can take place by eliminating governance through regulation that can lower the cost and reduce the delays inherent in the regulating process. Blockchain has the potential to eliminate the complexity and ultimately redefining the traditional boundaries of a particular organization.