Blockchain Primer

Resources to Understand The Technology and Its Applications

Blockchain Primer: Resources to Understand The Technology and Its Applications

How This Primer Is Organized:

  • Introductory Concepts What is blockchain? Why is it such a big deal?
  • Terminology The main purpose of this resource is to get more people involved in conversations about blockchain. Jargon is a barrier that prevents the cross-discipline conversations that spark great ideas.
  • Key Blockchain Use Cases These transformative technologies are poised to radically change business models. These changes go beyond the mainstream disruptive effects on media and training.
  • Current Examples of Blockchain Applications Startups, incumbents and non-profits are on the ground implementing blockchain solutions right now. This organizations provide a window into what’s possible within blockchain.
  • News Sources These are some of the sources that cover the day to day shifts within the technology. Everyone consumes news in a different way so resources represent diverse approaches.  Scan through the list and subscribe to a few to keep up to date on cutting edge advancements.
  • Learning About Blockchain for Companies and Individuals Resources for you or your company to explore further learning opportunities.
  • Looking to the Future What’s next in blockchain?

Blockchain: An Overview

What is Blockchain?

Before anyone can start learning about blockchain’s implementations, they have to learn about blockchain itself as a technology. A blockchain, put simply, is a globalized ledger of transactions which are encrypted. These transactions are verified by users of the blockchain through advanced mathematical algorithms. This decentralized nature isn’t how all blockchains work, but that’ll be explained later. This infographic and video will supplement this brief explanation.

These two resources are essential to explaining blockchain as the decentralized storage of information in the form of blocks on a ledger, rather than getting into Bitcoin, which is only one type of blockchain utilization.

MIT has a great website dedicated to learning about blockchain. It’s not maintained as frequently as other websites but the content is definitely there.

Blockchain Terminology

If you have trouble following along don’t worry it’ll start to make sense with more readings. Here is a glossary of terms that will be good to know. A lot of these terms may have no context now, but they’ll become second nature after being used more frequently.

This glossary is perfect for beginners due to its varied terminology. It can be used to look up information that a typical google search may not be able to handle.

This guide is well written in both depth and length, though it isn’t structured alphabetically so it may be better used as way to brush up on terminology.

Many terms are lost or forgotten with such large reference guides. Here are some of the most essential terms you should know:

Systems:

  • Bitcoin: A well-known cryptocurrency, based on a proof-of-work blockchain.
  • Ethereum: An open software platform based on blockchain technology that enables developers to write smart contracts and build and deploy decentralized applications using the platforms’ token, Ether.
  • Litecoin: Litecoin introduces changes to the original Bitcoin protocol such as decreased block generation time, increased maximum number of coins and different hashing algorithm.
  • Ripple: A payment network built on distributed ledgers that can be used to transfer any currency. The network consists of payment nodes and gateways operated by authorities. Payments are made using a series of IOUs, and the network is based on trust relationships.
  • Dash: An open source peer-to-peer cryptocurrency that offers instant and private transactions. Dash operates a decentralized governance and budgeting system, making it the first decentralized autonomous organization.
  • Lisk: A decentralized network with its own blockchain that has been launched to enable developers to build a wide range of apps on the Lisk network by developing custom side chains.
  • Steem: A blockchain social network with rewards. Steem is an aggregate social networking site where users, or “Steemians”, post original content, links from the Internet and questions. Steem users upvote or downvote this content to promote interesting post and reward the author.
  • Hyperledger: An open source collective effort initiated for the betterment of cross-industry blockchain technologies.

Properties of the Blockchain:

  • Consensus Process: A group of peers responsible for maintaining a distributed ledger use to reach consensus on the ledger’s contents.
  • Permissioned Ledger: A permissioned ledger is a ledger where actors must have permission to access the ledger. Permissioned ledgers may have one or many owners. When a new record is added, the ledger’s integrity is checked by a limited consensus process. This is carried out by trusted actors — government departments or banks, for example — which makes maintaining a shared record much simpler that the consensus process used by unpermissioned ledgers.
  • Unpermissioned Ledger: A ledger, such as Bitcoin, which has no single owner — they cannot be owned. The purpose of an unpermissioned ledger is to allow anyone to contribute data to the ledger and for everyone in possession of the ledger to have identical copies.
  • Distributed ledger: are a type of database that are spread across multiple sites, countries or institutions. Records are stored one after the other in a continuous ledger. Distributed ledger data can be either “permissioned” or “unpermissioned” to control who can view it.
  • Proof of Work System: A system that ties mining capability to computational power. Blocks must be hashed, which is in itself an easy computational process, but an additional variable is added to the hashing process to make it more difficult. When a block is successfully hashed, the hashing must have taken some time and computational effort. Thus, a hashed block is considered proof of work.
  • Smart Contracts: Contracts whose terms are recorded in a computer language instead of legal language. Smart contracts can be automatically executed by a computing system, such as a suitable distributed ledger system.

The “why” Behind Blockchain: Key Use Cases

Now that a baseline for blockchain has been established, it will help you to understand the use case of the technology. For this next video, pay attention to the use cases and future of blockchain. This video provides great examples and a simple explanation of uses.

It is quite hard to simplify blockchain into one use case. You’d be very hard pressed to find an industry that wouldn’t benefit from blockchain. Many times, you’ll hear three things. “Efficiency. Fraud Control. Universal Data Base.”

Here is an article that emphasizes the realistic use cases for individuals and companies integrating blockchain into their business model.

Additionally, here are the key use cases of blockchain from the perspective of IBM. More on this will come later.

Blockchain Technology of Today – Diversity of Application

Here is a clear example of these three use cases in the health care industry.

A few startups in the blockchain space (non-cryptocurrency) that have been gaining traction in recent months include:

  • https://colony.io/:This is a great concept. Essentially, it’s a way to crowd share an organization, company, corporation. The idea is that this platform is a means to creating without centralized ownership.
  • http://agriledger.com/: This concept is to bring farming back to the people. Giving small farmers the ability to collaborate as a world-wide cooperative.
  • https://gem.co/: Hard to describe the concept. It’s a way to share informational resources through network streams to save time and money, but there’s also a lot more to check out.

These start-ups depict how use cases become a reality. Either a blockchain is implemented directly in a company’s infrastructure or a company will use a service that provides them with resources or storage on the blockchain.

Some clear advancements using blockchain technology can be seen in the retail world today with a few cutting-edge startups that have been first to the table. As time goes on there will inevitably be more companies to adopt blockchain and with the ability to use Hyperledger through IBM, this future may not be too far off.

Here are some current day implementations of blockchain technology for consumers.

  • Purse.io: Purse.io is a retail platform that allows users to buy merchandise from Amazon or other vendors in Bitcoin. All items are marked down by some percentage that fluctuates from day to day, but typically its somewhere between 15% and 25%.
  • SpellsOfGenesis.com: Spells of Genesis is a decentralized card game run on the blockchain. Each card has a unique data type and can be used in the online game as well as traded between other players. This game is regulated on the blockchain and has a storyline “inspired by the blockchain”.
  • Colu: Colu takes the idea of a universal blockchain and localizes it. This app allows businesses to tokenize their assets and receive payments instantly at checkout with a digital currency specific to that town or region. Colu also promotes “good deeds” with a reward in that location’s specific cryptocurrency. The idea is similar to Venmo but it leverages the instantaneous nature of cryptocurrency and an eventual IoT in order to promote small businesses and local initiatives.

If you’re interested in any other innovative blockchain start-ups that provide use cases for consumers, check out this source.

Ten Companies Using the Blockchain for Non-Financial Innovation by Luke Parker

Blockchain in Your Life Today

Interestingly enough, even if you’re not part of any of these blockchain startups, you’re still part of the blockchain revolution. Many companies are implementing blockchains in their companies because of the countless benefits, though are not publicly advocating their use for whatever reason.

These next few articles go into detail about specific blockchain uses of banks such as Barclays and retailers such as Walmart all using the blockchain in their own unique way.

This article by published by CNBC is astounding. The statistics are understandable but you would imagine that more people would be talking about blockchain if nearly half of all big-name companies are considering implementation.

It is an amazing reality to consider. To really get a full grasp on the magnitude of blockchain developments, check out this TedX talk.

How the Blockchain will Radically Transform the Economy by Bettina Warburg

News Sources: How to Stay Informed About Blockchain Developments

The current news sphere of cryptocurrency is a jungle. One must train their eyes to weed through the muck of advertising and hype and see the true potential of the technology.

With that in mind, here are the top news sources.

https://cointelegraph.com/tags/blockchain: This website is a lot to take in. There are lots of articles just to peruse and stay somewhat up to date on large blockchain events, but many of the articles are also just specific stories about particular companies. Great source for talk about the blockchain and very interesting graphics. One thing to note is that this is a subsection of a larger cryptocurrency news page, though the other parts of the site are a bit noisy.

It’s important to keep with these news sources for now because of their simplicity. They describe things from a higher level than most news sites. More detailed and in-depth site will be recommended later on.

In the meantime, check out this podcast, it’s pretty good, and talks mostly about high level use cases of blockchain technology. It’s also pretty popular and doesn’t require much knowledge about blockchain specifics so you can recommend this to your coworkers or friends so you can have someone to chat with about blockchain on the day to day.

“Unchained” by Forbes

Hyperledger and Industry Oriented Applications

At the beginning of this blockchain walkthrough, there was a heavy emphasis that cryptocurrency was only one of the many implementations of blockchain technology, and here’s why.

Though Bitcoin describes a virtual currency, both tangible and intangible goods can be recorded on the blockchain. At its core, a blockchain is an immutable ledger of transactions. These transactions can be anything from fiat currency to diamonds to baseball cards all of these goods (and the associated data) can be recorded on a blockchain.

IBM realized this and created their own blockchain fabric called Hyperledger. This is a commercial, permissioned network that companies can run their own systems on using IBMs hardware. This article describes the benefits that IBM’s Hyperledger presents with its permissioned network and encrypted hardware.

Technical Advantages of Hyperledger Fabric by Sharon Cocco and Gari Singh

This video gives a summation of why IBM employees believe Hyperledger is important and the key features that make it unique.

Why Hyperledger? by IBM

Hyperledger is unique not because of the fact that it has a better concept or better code, but simply because it has the “Blue-Chip” status and security that is associated with IBM. Due to this trust that companies have with IBM and their associated highly secure systems, more and more top businesses are using Hyperledger integration within their businesses. You may be surprised to find out that many big-name companies are actually already using the Hyperledger fabric to run some of their logistics.

https://www.hyperledger.org/members

Many companies have adopted this new technology because of the amazing benefits that the Hyperledger fabric provides to its members. Just as Bitcoin and Ethereum provide amazing means for value transactions and codability, Hyperledger provides business efficiency and inter-business relationships in a trustless environment. Many factors of blockchain are universal such as immutability and encryption, though Hyperledger brings a few more focused use cases that are highlighted in this reading.

Hyperledger Use Cases and Requirements by Carlo Gutierre

Hyperledger allows companies who are worried about the negative connotations associated with Bitcoin to use a blockchain ledger to run business transactions. Even if it’s not decentralized and unregulated, Hyperledger is still a win for open-source and open-governance, and it will improve big corporations around the world.

Learning About Blockchain for Companies or Individuals

With this influx of new technology, large companies are having a difficult time finding the personnel with the skillset necessary to complete the vast amount of work that they are faced with during blockchain integration. Due to this, companies tend to either hire an outside team of professionals through IBM (when working on Hyperledger) or other such companies which specialize in blockchain systems to manage their workload.

Today we see a trend toward workplace education on blockchain and the associated systems. Companies want their employees to be up to date on technological advances and the company as a whole to be mindful of the upcoming blockchain revolution. They would like to stay ahead of the curve and here are some of the ways in which they’re doing it.

Traditionally, education is perceived to originate from a single institution. Whether it be a college, university or accreditation program, all these qualifications depend on an outside source to verify achievement. Blockchain education is a bit different. There are definitely some brick and mortar institutions trying to adapt to the times, and as showcased in this article:

Ten Universities that Offer Blockchain Courses by Coinfy News  

Though, these institutions come with a hefty price tag and not much to show for it. The best education that can be found in blockchain is through self-teaching. These methods allow for anyone to stay up-to-date on recent developments in the platforms and shifts in the culture as well as other things which are lost in the traditional classroom setting.

If a student is looking for more structure in their education they can turn to some of these low-cost websites that are constantly updating their material to reflect the climate.

Bitcoin and Cryptocurrency Technologies Course by Arvind Narayanan

Blockchain 101: The Basics by Hudson Jameson

However, individual exploration of the content with a little guidance from a source list such as the one you’re currently reading may be the best means of education because it teaches an individual not only the specific content but how and from where to get educational content in the future.

Blockchain, Bitcoin, Hyperledger and the Future

Blockchain as a revolutionary technology, Bitcoin as a universal currency and Hyperledger as a means for established companies to join in without the inherent risks of new technology. All three of these aspects of the blockchain play a role in propelling its advancement for the future.

Some clear advancements using blockchain technology can be seen in the retail world today with a few cutting-edge startups that have been first to the table. As time goes on there will inevitably be more companies to adopt blockchain and with the ability to use Hyperledger through IBM, this future may not be too far off.

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2018-12-12T18:19:45+00:00

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