Blockchain is the new buzzword around the block and seems to be attachable to almost any other noun, ever heard of the blockchain toothbrush? Jokes aside, the technology has a bright future in today’s techno-society and promises to revolutionize the way we pay, think, work, communicate, and even eat, but what exactly is Blockchain? Nowadays, many seem enthusiastic about the technology without understanding what it really means. This article will be a blockchain explained for dummies kind of article intended to lift the veil on one of the most confusing buzzwords.
Blockchain Tutorial for Beginners
Blockchain came to existence along with another innovation, the Bitcoin, which started the whole cryptocurrency craze. To put it simply blockchain is a new form of network and database. It may come as a surprise to some but most networks, including the internet, are centralized with all the information stored in one, or a few, central databases. This means that a central entity has full power over said database; this raises questions concerning privacy, security, history, transparency, and influence.
After all who’s to say your account is safe when an entity can one-sidedly, and in all impunity, erase all traces of its existence. This is the idea that led to the creation of the blockchain technology, a decentralized, immutable, public, and chronologically inputted.
Blockchains work on the basis of consensus, where all the information is distributed across all players, or nodes, and everyone has access to the same information. To add information to that database one needs to add it in a block which will, in turn, be confirmed by one entity and transmitted to the entire network. The entity confirming the block is called a miner and is either chosen after solving a complex mathematical puzzle, Proof of Work, or chosen deterministically, Proof-of_Stake. Block confirmation is thus distributed amongst the users and a transaction can take several blocks to be confirmed, ensuring no one can one-sidely compromise the network.
Each block starts with a hash (#) corresponding to the hash at the end of the last block with each hash being used with only one block this effectively links all the blocks together along a chain, hence the name. This ensures that blocks remain immutable as changing something any previous information would require re-mining the entire blockchain up to the current block, something unlikely to happen, looking at the energy and resources necessary to do so.
Blockchain Supply Chain
Take the closest object to you, do you know where it came from? How many steps it went through? If the dates and environmental practices it boasts are true or a simple marketing trick?
The Blockchain found many applications but one of the most promising ones is in supply chain management.
Some of the advantages the blockchain offers to supply chain management are:
- Transparency: Origin, transaction, stage, location, and ownership changes; everything is recorded in the Blockchain. Every participant and user can access all the information, ensuring everyone that they are presented with the genuine article and with the correct information.
- Security: With everything recorded on the blockchain, resolving litigations and disputes are as easy as checking on an immutable and available to all actors database.
- Smart contracts: Smart contracts can be used to automatically transfer ownership, process payments, update location, receive updates on expired products, and so on the applications are numerous and promise an easier, less expensive, and more streamlined process for many actors once implemented correctly.
- Efficiency and scalability: With most changes being handled automatically and the integration of new participants requiring a simple download, blockchain offers tremendous opportunities when it comes to efficiency and scalability. An example would be efficient warehousing, with each purchase or expiry the blockchain would automatically be updated and may automatically replenish the product in the desired location. These would hopefully result in a decrease in price on the long-term not only for the merchants but also for the consumers.
- Ease of payment: The blockchain’s mean of payment, cryptocurrency, can be used for border-less, low fee, near instantaneous, payment using smart contracts or manual transfers, providing a much-needed simplification and lower costs to a very complex process. An example of this would be a product changing ownership between three different countries requiring the use of multiple currencies; through the use of cryptocurrencies the payments would be made in one currency, would avoid double spending, be automatized, and be done at a much lesser fee.
With this, Blockchains are truly revolutionizing the way not only supply chains but many other industries will work.
Blockchain stocks represent a new and innovative way for companies to get the funding they need. Blockchain stocks generally work on the premise of a token or coin that will rise in prices and can be traded, exchanged, or in some cases changed back into fiat currency at any moment. Initial coin offerings, or ICOs, have become increasingly popular but the lack of regulations gave way to abuses, scams, and empty promises that gave ICOs a bad name and resulted in their ban in many jurisdictions.
These offerings work in fact much in the same way ordinary stocks do but give much more leeway as to who can access and invest in them with anyone owning some cryptocurrencies or fiat currencies with international payment options possibly joining the project. In an ICO, coins are offered at a specific price and when bought provide capital for the company to start their project. Investors are either genuinely interested in the project or expect a rise in price of the coins they bought due to either the project being successful, high demand for their coins, or a token burn strategy in which the company buys back a part of their coins later and destroys them, effectively raising the price of the remaining coins.
ICOs have proven a popular and very successful way to raise capital for many companies and gave birth to many amazing projects but have also had many controversies due to the excesses it brought.
Jobs in blockchain and cryptocurrencies are on the rise and the trend has not ended with the bear market. While November and December 2018 have seen a rise in the lay-off of employees in the industry, this is a reflection of the current market state, and the way these companies were financed, rather than a decline in interest in the industry.
As a booming market, the blockchain industry is facing a current shortage of qualified personnel; some of the most in-demand jobs are of course Blockchain engineers, developers, financial experts, marketers, and customer support.
The companies hiring in this industry span from start-ups with innovative projects to international banks and tech corporations trying to catch up on the technology. Traditional job boards like Linkedin, Monster, Indeed, and Glassdoor are a good place to look for jobs related to blockchain or cryptocurrencies but don’t forget to look on your local job website.
This concludes today’s articles giving a brief blockchain explanation before moving on the how the new technology impacts some of the world’s biggest industries like blockchain in supply chain management, and how are the blockchain stocks similar yet different from traditional stocks.