Basics of blockchain
Blockchain is easier to understand when you know how it’s being used in various industries.
It is no surprise that many still believe that blockchain technology is confined to cryptocurrencies.
After all, blockchain’s entrance into the mainstream was catalysed by the granddaddy of cryptocurrencies – Bitcoin.
But what is Bitcoin anyway? In 2008, an unknown person (or people) by the name Satoshi Nakamoto published the Bitcoin whitepaper which laid the groundwork for the first trustless, peer-to-peer virtual cash system.
Nakamoto set out to create a decentralised digital currency in an attempt to solve many of the issues faced by traditional fiat currencies and banking systems, including slow speed and high transaction fees.
Bitcoin, as argued by many experts, also has the capacity to tackle deeper problems inherent in centralised systems, such as fraud/counterfeiting, inflation and monopolies.
And as Bitcoin gained popularity, so did the ideas for applying blockchain in a wide array of businesses.
What is blockchain?
Blockchain is a decentralised, openly shared and distributed digital ledger that is secured using cryptography.
Blockchain challenges conventional, centralised models by offering a cost-effective, efficient and secure way to trade, but also without any need for intervention from intermediaries or central authorities.
On top of that, every transaction is time-stamped, making the ledger auditable and virtually tamper-proof.
One of the unique features of blockchain is that it’s managed by participants who contribute to the network’s upkeep. The same participants will validate the integrity and authenticity of the data through a predefined consensus mechanism.
Simply put, this means that everyone on the network works together to ensure the validity of the data, instead of it being controlled by a single person or entity. What’s also important here is that there is no single point of failure that can occur within a blockchain.
The technology is being tested and deployed in various industries and here are six interesting ones.
Supply chains of today require an extraordinary amount of diligence when it comes to tracking goods as it moves from supplier to factory to shipyard.
Due to reliance on trust, supply chains are susceptible to human error, regardless of whether it is accidental or malicious.
Late last year, major retailer Walmart partnered with IBM to work on the Hyperledger Fabric blockchain for tracking food items from supplier to shelf.
Thailand Post is looking to implement blockchain technology to improve its own supply chain and processes, from warehouse to delivery and everything in between.
Blockchain will allow it to employ real-time tracking and automated verification systems, which will improve the efficiency of the state-run postal service.
Luxtag has created a decentralised app to combat counterfeit and intellectual property theft so anyone can secure their valuable assets via the NEM blockchain.
Through its digitised certificates of authenticity, it is able to protect all types of products from bags to vehicles.
Malaysian artist Poesy Liang and Luxtag recently teamed up to implement a blockchain solution that authenticates and records provenance of Liang’s artwork.
With over a third of the Philippines surviving on less than US$2 (RM8.20) a day and having little to no access to banking services, the government needs a solution that doesn’t leave out anybody.
Project i2i aims to connect rural banks that have been excluded from the main payment networks by using smart contracts via blockchain technology.
It is aiming to create a decentralised, cost efficient and fast payment network that is not reliant on existing payment infrastructures and other intermediaries such as Swift.
Banks will potentially be able to issue digital tokens which will be backed by the Philippines pesos, essentially forming crypto-cash.
Electoral fraud is rife around the world, particularly in developing nations.
Blockchain is a great tool for tackling this serious issue as it can render votes anonymous while also providing better security.
A project known as Agora has already built a digital voting platform for governments and organisations to use.
In 2017, 2.6 billion cases of identity breaches were recorded across the globe, according to the Breach Level Index. Identity theft alone accounted for about 69% of all data breaches.
As blockchain is tamper-proof by design and makes verification painless, it’s easy to see why it’s great for preventing identity theft.
Civic is an identity verification platform that uses multi-factor authentication without requiring passwords or usernames, as it combines biometric authentication with blockchain technology.
But there’s more to blockchain as the technology is still in its infancy.
You can learn about blockchain’s potential and how it is going to transform businesses at Blocfest 2018, scheduled to take place at the Shangri-La Hotel, Kuala Lumpur, on Sept 26 and 27.
You’ll also get to network with people who are developing technologies based on blockchain during the KL Blockchain Week, from Sept 24 and 27, which also includes a hackathon.
Those interested in attending can get 40% off VIP tickets priced at US$450 (RM1,860) or normal tickets priced at US$375 (RM1,550) by keying in the promo code BLOC40D during checkout but this offer is only available for a limited time.