The Promise of the Blockchain
If you are unfamiliar with what a blockchain is, then imagine the Internet without email, Facebook, YouTube, or iPhones. It would be a barren black hole of cyberspace, where nothing of note happened. Well, in the future that might happen but it’s not happening now because there is an exciting new protocol in place called the Blockchain. This protocol is an ingenious way to move money from one place to another instantly, securely and at a small fee.
The Blockchain is a distributed ledger, which maintains the transaction records and ledger details for the entire network of computers, no matter what those computers are physically located at. Because the ledger is digital, it is capable of being secured by hundreds of machines at once, making it very difficult for a single computer to collate, compile and then send the information to all the other computers. This system is what allows the backbone of the modern financial system to be kept online, safe, and letting computers trade back and forth quickly and effortlessly with no delays for payments, investments, or business hours. The Blockchain is also what allows you to do things like send an order to a restaurant and have the food take orders immediately from your home computer instead of having to call in to let them know you want to make a purchase. In addition, the Blockchain is what allows for the secure transmission of large amounts of data.
Unlike previous networks such as the Internet or the WAN, which rely on TCP/IP packets for the transfer of data, the Blockchain operates on a peer-to-peer basis. This means instead of needing to be connected to the mainframe of the company you are working for or having to configure your computer for use with the company’s servers, you simply log onto the Blockchain ledger from your internet browser. You will be able to transact with other users from any part of the world, using any device, at any time. In other words, you don’t need a server. Everything travels via the Blockchain.
One feature that has really jumped out at me as a potential use for the Blockchain is called Heat. Heat is described by Wikipedia as “a measure of the time it takes to transfer a specific number ofether [in the form of coins] between agents. The underlying benefit to using the Heat model is that it provides an accurate indication of the time required for transaction execution”. With decentralized systems, you won’t need to wait for the mainframe to upload the information you require, you’ll be able to transact immediately. This makes the distributed system ideal for real-time transactions such as price feeds, stock exchanges, cash transfers, and more.
Another great feature of the Blockchain is referred to as Heatmap visualization. Heat maps show the relationships between the values of your transactions over time. An example would be that a particular currency price can be seen as the sum of the total number of buy and sell transactions done at a certain moment in time, with the x value representing the amount of buy transactions and the y value representing the amount of sell transactions. You can use this heat map to see which currencies are most active during certain times of the day. This is a good way to get a general feel for what the different currencies do during particular periods of time, which can provide insight into a particular type of investment.
The biggest reason why the Blockchain is ideal for the distributed system is due to the centralization of processing power. This comes from the fact that the entire system is controlled by a single computer system. There’s no need to have separate servers for everything, which means businesses that want to run their applications in the best conditions, can do so by transferring data to the central authority instead. The power of this new blockless architecture is not only used for everyday transactions, but for reporting and analysis as well.
The Blockchain also has the ability to prevent downtime by using proof-of-stake algorithm. Unlike most networks, the Blockchain requires a supercomputer to prove that a specific chain of blocks is valid and in order to remove any possibility of fraud. This prevents the risk of having a network of unconnected nodes, which would render the system useless. If this problem exists, then the transaction fees would have to be high in order to cover the costs of those unconnected nodes, which is not desired by any business. The proof-of-stake method is referred to as Byzantine Faulty as it consists of two competing groups, each of which creates blocks that can be included in the final ledger.
The promise of the Blockchain lies in its ability to scale to meet the needs of businesses large and small. The main goal of the decentralization of the Blockchain is to provide fast, low-cost, secure and reliable transactions between users across the world. This promises to create better conditions for food industry players around the globe who want to provide the best products to consumers at the best possible prices. In addition to providing a more secure system for global transactions, the Blockchain offers improved scalability, higher transaction volumes, instant confirmation and the ability to strengthen the integrity of the network. Ultimately, the promise of the Blockchain is to replace the traditional approach to logistics and make the food industry a more proactive partner in the preservation of the environment. The ecosystem created by the Blockchain will benefit from the synergistic benefits of being a creator of value-added products and having lower overheads compared to traditional food chains.