Cyber•Fund is introducing a series of publications that provide an overview of some of the best speaker topics we’ve hosted at our meetups. During our last session of summertime meetups, Valery Litvin—cyber•Fund’s CTO—aptly described the blockchain industry as “a revolution in trust.” Blockchain technology broaches the concept of creating a new world that is founded on principles of decentralization and autonomy. It is this groundbreaking technology that suggests a complete reorganization of society as we know it; a civilization that is transparent, honest and most importantly, concerned with an individual’s general welfare.
From Thomas More’s Utopia, “Kindness and good nature unite men more effectually and with greater strength than any agreements whatsoever, since thereby the engagements of men's hearts become stronger than the bond and obligation of words.”
According to Litvin, one of the most revolutionary steps in this direction was made back in 2009 when Satoshi Nakamoto first introduced blockchain technology to the world. Ironically, he didn’t invent anything new, but rather compiled multiple working concepts into an information system and called it Bitcoin. Only after a few years have the masses begun to to distinguish the concept of blockchain from bitcoin. The dapps market is valued at roughly 110 billion dollars. There are an increasing number of projects based on this technology, and as a result Bitcoin’s initial and gradually decreasing share of this market is 40 percent.
Hash-Function
This involves the transformation of a string of characters into a usually shorter fixed-length value or key that represents the original string. Hashing is used to index and retrieve items in a database because it is faster to find the item using the shorter hashed key than to find it using the original value. It is also used in an abundance of encryption algorithms.
Digital Signatures
The owner of digital property has a private key and a public key. When a transaction takes place on the network, it must be signed with a private key. A unique digest of the message subsequently appears as a digital signature. The public key helps to verify the authenticity of the signature without opening the private key.
Distributed Registers
Tersely phrased, blockchain is a decentralized database that ensures security and durability.
Economic Incentives and Consensus Algorithms
Economic bonuses and incentives support the work of the blockchain network. This ensures everyone performing a certain task receives a certain reward for their work. Subsequently, all nodes of the network compete with one another in the speed of solving the computational problem for obtaining compensation.
A handful a basic methods are available to quickly solve a problem, while concurrently protecting the network.
Proof-of-Work
A node with higher network computing power can quickly solve the problem and receive a reward.
Proof-of-Stake
A person can mine or validate block transactions according to how many coins they hold.
Delegated Proof-of-Stake
The fastest, most efficient, most decentralized and flexible consensus model available that uses a reputation system and real-time voting to achieve consensus. This is the algorithm implemented on the platform Golos.io.
When examining the market, we can see that each blockchain system addresses its’ own class of tasks. Bitcoin allows you to transfer any amount of money anywhere in the world in a few minutes with a small commission void of taxes, passports and intermediaries. Likewise, Ethereum became the first solution for smart contracts.
These are computer protocols intended to digitally facilitate, verify or enforce the negotiation or performance of a contract. Smart contracts facilitate credible transactions without involving third parties. For the first time in history, code is a law that even the creators themselves can’t do much about.
Token distribution is the key point of launching any new blockchain project because the tokens allow people to use the associated services. Many investors in today’s marketplace place a great deal of emphasis upon ICOs, which has spurred a flurry of investments that contribute to the further development of new technologies.
Tokenization is the digitization of business. Say you have a traditional business, but want to move it onto blockchain. You can conduct analytics and accounting on the blockchain, issue shares and even run your business using this same data. A new economy has been created based on completely different principles. As developers it is time to utilize this opportunity to realize your potential and harness the powerful tool that is blockchain to pioneer world-changing projects.
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