What is a blockchain?
Blockchain is a way of preserving information in a computer network, an ever-growing list of computer records called ” blocks’, interconnected and encoded cryptographically.
The blockchain database contains information about all transactions carried out by system participants. Data is stored as a chain of blocks. Each of them includes a certain number of transactions. An analogous example of its structure is an infinitely long metal chain in which links cannot be broken or swapped.
The concept of “blockchain” has no national origin; it has network “citizenship.” The term’s history began in 2008 when an anonymous person or a group of persons hiding under the pseudonym Satoshi Nakamoto published an article that became the manifesto of this innovative technology. The article described its essential characteristics and the possibility of creating a decentralized system of monetary settlements.
Eight main trends in the blockchain development
Tighter regulation comes as governments, banks, and institutions join the race to bring blockchain into traditional infrastructures.
Many believe that increased regulation is a sure way to promote the mass adoption of cryptocurrencies. However, this could be a double-edged sword for some crypto projects already in the spotlight due to dubious support, such as Ripple (XRP) and Tether (USDT).
Stablecoins seem to be at the forefront of these conversations. Central banks around the world are showing increasing interest in creating blockchain-based central bank digital currencies (CBDCs). Many investors expect tighter restrictions in the crypto space to pave the way for institutional adoption.
Acceptance of cryptocurrencies by institutions
Many commercial and central banks, once called the “nemesis” of the cryptocurrency world, are turning to cryptocurrencies and blockchain to streamline their practices and keep pace with technological advances. Cross-border payments are painfully slow and expensive.
The coming months will see an increase in the institutional adoption of blockchain and cryptocurrencies by major payment processors, corporations, and governments. In addition, a decentralized autonomous organization (DAO) can play a prominent role in facilitating decentralized governance for various applications.
Development of non-fungible tokens (Non-Fungible Tokens)
The NFT token protocol appeared on the Ethereum blockchain in 2017 – they contain unique metadata, which distinguishes them from other tickets. With their help, you can store more individualized information.
Use cases: government documents (from marriage certificates to driver’s licenses and property documents), luxury goods registers, tickets, and other digital goods.
The token will be a ticket, coupon, or collectible. It can represent an actual object: a cup of coffee or a piece of art. Non-fungible tokens will completely change the concept of the economy.
Tokenized shares are securities converted into digital security tokens using blockchain technology. The security token is backed by a real asset and tied to its value.
This is another example of linking tokens to objects from the real world. Infrastructure development will drive their popularity — extraordinary STO (security token offering) exchanges and wallets. The instrument itself will reduce liquidity in the stock market.
All illiquid assets will be split into fractions, tokenized, and placed on exchanges. This is how new liquidity will be formed: in the real estate market or, for example, in art. They will be traded 24/7, 365 days a year. Such infrastructure is already being developed in Malta and Switzerland.
Blockchain can be used for data protection, reducing fraud, waste, and abuse while increasing trust and accountability. In a blockchain-based government model, individuals, businesses, and government authorities share resources in a distributed ledger protected by cryptography. This framework eliminates a single point of failure and inherently protects sensitive citizen and government data.
Freedom of speech
Thanks to the blockchain, no statements can be unilaterally removed by corporations or governments.
We will move away from a hierarchical society toward network structures. These changes will have significant social implications: trust and decentralized control will become the new standards.
Blockchain and the Metaverse
The term that has become synonymous with blockchain is “metaverse.” The Metaverse is one of the biggest blockchain trends that has made headlines in recent months.
It is understood as a network of virtual worlds, the purpose of which is to promote the establishment of social connections using virtual reality, augmented reality, and Web3 technologies. The Metaverse uses blockchain to create an immutable record of transactions for digital assets.
In the metaverse, people use cryptocurrencies to purchase assets such as virtual land, resources, and tools in various game scenarios. In addition, these assets are “tokenized” on the blockchain as non-playable tokens (NFTs).
Easily accessible cryptocurrencies like Bitcoin and Ethereum are fungible. However, NFTs are often scarce or unique. This makes it possible to own virtual property in the metaverse.
The most popular blockchain platforms
On the fundament of blockchain platforms are developed blockchain-based applications. They may be permissioned or permissionless. These platforms provide different blockchain services. Ethereum, Hyperledger, R3, Ripple, and EOS are a few names that have created blockchain infrastructure to allow people to develop and host applications on the blockchain.
Ethereum is an open-source blockchain platform. Designed for intelligent contracts and provides programming tools for their creation. Introduced by Vitalik Buterin in 2013, this platform simplifies the development of next-generation decentralized applications (DApps) and online contractual agreements.
Ethereum allows the development and issuance of cryptocurrencies and existing digital tokens. Moreover, you can create your own DAO (Democratic Autonomous Organization), a virtual organization where various problems are solved by voting its members.
This platform offers valuable features, including Turing-complete languages, command-line tools (built on Go, C++, Python, Java, etc.), and an Ethereum wallet. The latter makes it possible for developers to store and protect crypto assets and simplifies the development of smart contracts.
BigChainDB is an open-source distributed ledger. It was created to store large amounts of data. The system allows developers to deploy proofs-of-concept and blockchain applications.
This database provides decentralized control, low latency, resiliency, powerful query functionality, and high transaction processing speed.
The system does not have its cryptocurrency but allows the issuance and transfer of assets, tokens, and cryptocurrencies. BigChainDB supports digital user assets and sets access rights at the transaction level.
BigChainDB is based on a federated consensus model, a federated node with the right to vote. Supporting public and private networks, BigChainDB has many uses, including intellectual property, labor, government, and land cadastre.
The Hyperledger Fabric blockchain is one of the most popular Hyperledger projects organized by the Linux Foundation and released in 2016. Hyperledger Fabric is written in Go and uses Docker containers to implement smart contracts.
The platform is the basis for creating blockchain-based solutions with a modular architecture and supports using one or more networks. The ability to provide high flexibility, reliability, and scalability makes Hyperledger Fabric suitable for developing enterprise-level solutions.
If we talk about its useful functions, it contains channels for exchanging confidential information and adheres to the policy of confirming transactions. In addition, transactions include signatures of all supporting participants and are forwarded to the service of the order. Hyperledger Fabric is one of the best platforms for creating public blockchains.
Hyperledger Cello is a blockchain platform and operating system; This is one of the Linux Foundation’s Hyperledger projects. Hyperledger Cello’s goal is to minimize the effort required to create and manage blockchains by delivering on-demand “as-a-service” deployment models in the blockchain ecosystem.
Hyperledger Cello allows developers to create a blockchain-as-a-service (BaaS) platform from scratch and manage the blockchain lifecycle. Moreover, Cello can support a range of networks over bare metal, virtual clouds, and clustered containers (Cello supports Docker, Swarm, and Kubernetes).
Hyperledger Sawtooth Lake
Hyperledger Sawtooth Lake is a blockchain platform representing an enterprise solution supporting public and private development. This platform makes it easy for software engineers to create, deploy, and run distributed registries and applications.
Sawtooth Lake is a set of modules written in Python and provides an abstraction of intelligent contracts, which allows developers to write contract logic in the language of their choice. Transactional business logic in Hyperledger Sawtooth is separated from the consensus layer.
The consensus mechanism is called Proof of Elapsed Time (PoET). It uses the reliable SGX computing module built into Intel processors of the latest generations.
There are many valuable ways to use Sawtooth Lake. For example, in the case of seafood procurement management, he solves such problems as improper food supply, illegal fishing, and seafood fraud.
Hyperledger Sawtooth can provide a secure infrastructure for creating and exchanging digital assets.
HydraChain is an open-source extension for the Ethereum blockchain platform. It offers support for the development and deployment of public distributed registries.
HydraChain is fully compatible with the Ethereum protocol and provides an infrastructure for creating Python intelligent contracts. Hydrachain has many tools to reduce development time and improve debugging.
HydraChain must provide a high level of customization: various aspects of the system can be easily adjusted according to the user’s needs. For example, when creating smart contracts, you can easily configure transaction fees, gas limits, and blocking time.
Corda is an open-source blockchain platform for creating public distributed ledgers. This project was created by the R3 consortium, which unites the largest banks and allows for to management of legal agreements between parties.
R3 Corda provides secure data storage and immutable data recording like other distributed registries. It is noteworthy that only Corda makes possible the development of interacting blockchain networks whose transactions are strictly private. It is probably the only distributed registry platform with a pluggable consensus.
Multichain is an open-source distributed ledger based on the Bitcoin Blockchain and created to process financial transactions with multiple cryptocurrencies.
This platform provides various levels of access control and permissions and enables rapid solutions deployment. In Multichain, virtual networks can simultaneously be located on one server.
As an open-source blockchain platform, Openchain was created to issue and manage digital assets in a reliable, secure, and scalable way. This technology includes intelligent contract modules, a unified API, and multiple control and access rights levels according to a hierarchical system of accounts.
In Openchain, each transaction is signed with a digital signature (as in Bitcoin), and the consensus mechanism is represented by Partitioned Consensus. It is worth noting that Open chain is a free platform, so you don’t have to spend cryptocurrency to use it.
Chain Core is an enterprise-level blockchain platform based on the Chain Protocol and created to issue, transfer and manage digital assets on public blockchain networks. In addition, the platform allows developers to make financial services from scratch.
In Chain Core, proprietary digital assets include currencies, securities, derivatives, gift cards, and loyalty points. The platform offers role-based network management. Chain Core has a federated consensus and supports smart contracts, transaction privacy, and multi-signature account support.
Influence of blockchain technology on the general state of the economy
Company «PwC» recently published an analysis according to which the application of blockchain technology already by 2030 will be able to provide colossal economic growth. The development will be provided at 1.7 trillion dollars, according to average estimates. «PwC» is an international network of companies worldwide that professionally includes auditing and consulting services.
Analysis of blockchain systems entered the category of studies directly related to the study of the influence of modern technologies on the state of the world economy. Representatives of the international organization believe that blockchain is helping in restructuring and “rebirth” organizations, an opportunity to work in a new way.
Having analyzed the system’s state, experts identified five of its main areas of use. They included:
- tracking and control of listed sums of money;
- execution of payments and provision of financial services;
- creation of contracts, regulation of conflict and disputes;
- working with clients;
- identification and management.
This report on system and blockchain trends 2022 suggests blockchain can be used in different industries, from fashion to heavy industry.
Today, experts consider the most favorable position of the blockchain in the fields of health protection, education, and management. PwC specialists believe these industries will become the most profitable in ten years and raise the economy’s overall level significantly.
Also, the report mentions that a favorable political environment is necessary to develop such systems fully. Without it, cooperation between states is impossible and, accordingly, the development of strategic goals to which they must strive. It is also worth mentioning the importance of the business ecosystem, which must be ready to use all new opportunities and learn to manage them.