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Blockchain is one of the hottest technologies in the skill market for the last few years. In 2019, blockchain professionals were at the top of the list of most in-demand jobs, as per LinkedIn. A great number of banking, insurance, and technology companies have been utilising various blockchain solutions. The blockchain ecosystem has been flourishing in places like Europe and South Asian countries with new-age banking services and advancing decentralised innovation in the financial sector, known as Decentralised Finance (DeFi).
Because the technology is still very nascent, people with varied technical backgrounds and coding skills have got on the bandwagon and built a career by understanding the technical aspects in detail and finding an area where they can contribute, be it open-source software, blockchain architecture, and working on new protocols.
Blockchain is based on technology application, and its true value is in bringing trust and fairness to applications. Blockchain technology uses hash functions and Merkel trees as the basic data structure. Through a distributed consensus protocol that is not controlled by any individual, an immutable and traceable data structure is established. Due to the protection of cryptography technology, no organization, any individual, or any machine has the ability to tamper and smear the data in the blockchain at the current technical level.
This makes blockchain the most reliable infrastructure for record chains and evidence chains. Blockchain technology can enable any number of nodes to cooperate and reach a distributed consensus, thereby the network is not controlled by any specific party, eliminating a series of problems caused by the corruption of traditional super central nodes.
Why Decentralisation Could Be The Future
In many industries, problems such as monopoly and corruption caused by centralization constitute a shackle to the development of the entire industry. Blockchain has great potential for transforming trust relations in the world of technology.
The first is that the decentralized system structure provides a new mechanism for solving the monopoly, inefficiency and corruption caused by the centralized system; the second is that immutable data records become a new reliable foundation for business trust, social governance and systems for privacy. In addition, smart contracts provide new tools for improving the level of business automation. Finally, blockchain as a reliable cryptographic infrastructure can promote the widespread application of cryptography in various industries in society.
There are various types of technology projects related to blockchain are categorised into four categories: tools and frameworks, technologies, languages, and platforms. For example, through in-depth communication with hundreds of blockchain developers, we learned that their most important point of view on public chain projects is the complete documentation and excellent performance that are more closely related to the actual development process and products.
The blockchain provides an ideal infrastructure for the universal application of cryptography, which can effectively promote the universal application of cryptography protocols. Their application can effectively protect personal privacy and business secrets, ensure the standard implementation of contracts and processes, strengthen trust and prevent fraud, and then the basic values of modern society: freedom, fairness and trust.
Blockchain technology is the basic technology for building a trusted network and a value network, and the cryptographic content such as encryption algorithms and signature digests are run through each link of the blockchain technology to achieve trusted accounting, controllable permissions, traceable sources, support for trusted transactions, smart contracts and many other applications. For example, blockchain technology can be used for social media platforms based on distributed platforms, where rewards are paid to content creators, which is conducive to traceability of copyright transactions.
Public Blockchains Like Ethereum Are Attracting Thousands Of Developers
n public blockchains, network nodes can be freely created and the software is predominantly open source. It leverages Byzantine algorithms, asymmetric encryption, peer-to-peer network and other cutting-edge information technologies through decentralisation
Ethereum has the following design goals in addition to Bitcoin’s functions, including a Turing-complete contract language, and Built-in persistent state storage. At present, there are hundreds of contract projects based on Ethereum. For example, Augur is a decentralized prediction market platform based on Ethereum blockchain technology. Users can use digital currency to make predictions and bets, rely on the wisdom of the masses to predict the development results of events, and can effectively eliminate counterparty risks and server centralized risks.
As long as users simply use a few lines of code to implement logic, developers can create a blockchain-based application and apply it to scenarios other than currency. Ethereum’s design idea is not to directly “support” any application, but Turing-complete programming language means that theoretically any contract logic and any type of application can be created.
The second-generation blockchain represented by Ethereum is equivalent to a computer where all nodes share state. On top of this infrastructure, smart contracts can code and automate complex business actions in a clear way. If the asset is digitized, the smart contract can automatically manage the digital asset according to a predetermined contract. Smart contracts promote the “code as law”.
The biggest advantage of Ethereum is that it is a distributed consensus system without centralized control. In addition, because of the emergence of digital currency, we can use microeconomics to create a new system that subverts the tradition in a new way. The emergence of smart contracts provides an effective way for the blockchain to process data in a programmable and automated manner.
It is believed that Ethereum can continue to upgrade and iterate with the cooperation of global programmers to promote the sustainable development of the blockchain ecosystem. The technology is also laying a solid foundation for the blockchain financial market ecology and the underlying architecture.
Blockchain May Be The Next Frontier For Finance Applications
Finance is one of the most suitable fields for blockchain. The blockchain application in the financial field has three major values, including solving data security problems in the era of big data, improving transaction and service efficiency, and improving Data credibility. DeFi, or decentralised finance, also flourished in the first half of this year.
According to a report, there are thousands of DeFi projects, and Ethereum’s DeFi ecological development in the public chain is at the forefront of the market. The application of Ethereum covers the entire financial ecology of the blockchain through other tokens. DApp development is an important part of public chain ecological construction. The number and quality of DApp developers determine the ecosystem scale of the public chain. At present, the number of DApps and the more active public chain projects are Ethereum and EOS. The emergence of blockchain technology provides a new data storage and management mechanism, which is far collaborative and decentralised than current systems.
According to ConsenSys, an Ethereum based incubator, Ethereum-based decentralized financial services has achieved a 10-fold increase since and has seen network lock-ins over a billion dollars. DeFi’s vision is that all assets can be tokenized and freely traded at any granularity in the global open market. In this process, time and geographic restrictions will be eliminated, and high transparency will also eliminate various counterparty risks in the system.
For market users, DeFi allows users to borrow money without having to deal with a centralized network, that is, they can rely on a decentralized network (such as Ethereum) for mortgage and other financial services. In addition, DeFi can fill the gap in emerging market finance to a certain extent. According to the World Bank, 2 billion people worldwide do not have bank accounts or enter financial institutions. DeFi allows people who do not have banks or financial institutions to access financial services.
On the other hand, enterprises will increase the requirements for blockchain technology and services, and technical application solutions must be able to provide visible and appreciable value-added. Internet giants like IBM and Alibaba use blockchain technology to build its own global traceability ecosystem, which covers multiple countries and regions.
The development of blockchain technology and applications requires cloud computing, big data, Internet of Things, artificial intelligence and other new-generation information technologies as infrastructure support. The blockchain is merging with a new generation of information technology. This fusion will greatly affect the organization’s processing of data and how to gain insights from it. New solutions and methods from organizations, regulatory agencies and individuals are needed to ensure that ultimately everyone can benefit from.
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Vishal Chawla is a senior tech journalist at Analytics India Magazine and writes about AI, data analytics, cybersecurity, cloud computing, and blockchain. Vishal also hosts AIM's video podcast called Simulated Reality- featuring tech leaders, AI experts, and innovative startups of India.