This blog is a continuation of my previous blog introducing blockchain where I delve deeper into the established applications of blockchain, its types, and potential. Here’s a breakdown of what I’ll discuss:
1- Types of blockchain and their uses
2- Real-life Applications of Blockchains
3- Blockchain and Web 3.0
To quickly recap what blockchain is, it is a time-stamped digital record of information shared within a network of peers. The technology is relatively new and is constantly being developed with the introduction of new technologies and evolution of sciences. The most commonly known early application of blockchain is the Bitcoin cryptocurrency, however it soon came to light that cryptocurrencies are only a small fraction of the applications blockchain technology is capable of.
Types of Blockchain
Since its inception and the early adoption of the time-stamping mechanism created by Stuart Haber and Scott Stornetta, blockchain evolved from its first application of Bitcoin and expanded into different sectors. The technology proved itself versatile and accessible to users and therefore was able to adapt to their different needs via different degrees of accessibility. This means that not all peers within the network would have the freedom to change or vote against an action, thus creating different types of blockchain: private, public, or a hybrid of both.
The table below can summarize the major differences between all three:
Evolution of blockchain
Since the inception of the time-stamping idea by Stuart Haber and Scott Stornetta in 1990, blockchain went through several evolutionary cycles that shaped the way we are interacting with blockchain today.
The first application of blockchain technology started with Bitcoin in 2008 when Satoshi Nakamoto published his/their whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System”. With Bitcoin taking the spotlight, the technology was veiled and has not been realized as the mechanism that operates Bitcoin. However it later became clear that blockchain can expand beyond Bitcoin and offer a wide variety of uses, as is the case with Ethereum. Blockchain 2.0 manifests in the ability of blockchain technology to be utilized not only as an information database, but as an engine for other applications, via decentralized applications or Dapps. Dapps represent a scalable benefit of blockchain, where developers can utilize the existing infrastructure to create new uses for blockchain. Furthermore, blockchain 2.0 comes with the introduction of smart contracts. These contracts are computer codes that carry out contractual agreements that are self-executing; the codes and algorithms take in readings or data and in consequence trigger outputs dependent on the type of readings/ data.
Today, blockchain expanded on smart contracts and dapps and became the backbone of what is called Web 3.0, which I’ll be explaining later on.
What is blockchain Used for?
If we are to better understand blockchain technology in terms of a timeline we could start with the introduction of bitcoin in 2008 in response to Stuart Haber and Scott Stornetta timestamping mechanism. From then on, other cryptocurrencies such as Ethereum emerged in 2014, which expanded on the potential and uses of blockchain in comparison to its bitcoin predecessor. Smart contracts were introduced, and decentralized applications (or DApps) were built on existing blockchain infrastructure. This evolution in usage for blockchain marked a shift in its being primarily an information database to being a distributed computer that utilizes smart contracts and decentralized nodes in a network. Apart from the DApps, blockchain found many uses due to the growing interest and acceptance of it, and despite the fluctuating relationship between governments and cryptocurrencies, the technology itself provides solutions for many industries including supply chain, and banking.
Today, hundreds of projects are launching in the hopes of better utilizing blockchain technology in order to provide a better service aspect to the many sectors involved in our everyday lives. Supply chain is one industry that touches upon almost anything we use and there are currently blockchain-based programs, such as the one launched by IBM, that utilize the peer-to-peer validation to ensure that information is carried out simultaneously throughout the network, not to mention gather information and analyze it to predict any hindrances to the supply chain caused by external factors, or any spikes in demand. IBM reports that 79% of decision makers reported significant improvements in data quality from using blockchain for supply chain.
As for the banking sector, blockchain technology is facilitating many transactions and optimizing banking processes via blockchain software and networks. Results include better account management, minimal human error, and tamper-proofing transactions that thus offer a safer and more trustworthy monetary environment. Finance blockchains include Quorum, created by JP Morgan in 2019, and Corda by R3; where each blockchain harbors an impressive list of global banking institutions, which goes to prove how much this relatively new technology can provide to the world.
Web 3.0 and Blockchain
An important and relatively new use for blockchain is its application as the basic backbone of what is called the Web 3.0. Web 3.0 allows users to read, write, and own part of the data via a decentralized network of ownership dependent on a blockchain virtual machine that executes logic defined in smart contracts and based on a specific blockchain, predominantly ethereum.
Because public blockchains used in Web 3.0 are open to inspection by the public, they can be further developed and used to produce decentralized applications, or DApps. Essentially, anyone can build these Dapps and create value from them which allows for a large variety of uses.
I hope this blog was useful and helpful in regards to blockchain and what this exciting new technology has to offer! If you have any thoughts on the subject, share them with FLAN's community on discord. Stay updated with FLAN on LinkedIn, Facebook, or Instagram! and contact me at email@example.com.