Cryptocurrency, Blockchain, Bitcoins have managed to catch the fancy of investors, financiers, technocrats, and even the general public. The interest is so intense that Bitcoins have become a coveted gift option and companies have started incentivizing investors through ICOs. While almost everybody is keen to jump onto the blockchain bandwagon, few are actually aware of how this transformational technology works. Is Bitcoin just a bubble and blockchain a mirage? Or, do they really have some hidden potential that can overturn fortunes? This blog is a jargon-free account of the concepts underlying blockchain technology so that you can judge for yourself its merits and drawbacks and make a well-informed decision about its prospects.
Blockchain Bitcoin – A Block of Gold or a Chain of Blockheads?
The concept of blockchain technology is nothing new. It’s the application and orchestration of the concept that has the world awestruck.
From a bird’s eye view, a blockchain looks like the internet or world wide web- a chain of nodes attached and sharing information. But on a closer look, one notices the finer differences. While information in the web is stored on a centralized server and, nodes can access, modify, or delete information if they have sufficient access, blockchain has a public, decentralized “append-only” network system. There is no central authority that permits or forbids people (nodes) from accessing data in the chain. Data can only be added and, once added, data cannot be modified or discarded without the entire network shouting hue and cry. This is because a mirror copy of the entire blockchain is available to each node at all times.
A Public Distributed Ledger
Authentication of new transactions is done by solving complex mathematical puzzles that generate cryptic hash codes that are appended to the data; time stamped, digitally signed, and bundled into a block. This block inserts itself in the chain in a chronological fashion and the genius who solves the cryptic puzzle is awarded with some Satoshis. Each transaction can be traced back to its point of origin and discrepancies can be spotted along the way.
A Chain of Blocks
Now arises a legit question- why would people bother to solve these seemingly unsolvable puzzles? Because they are motivated by self-interest. When Satoshi Nakamoto concocted blockchain technology, he put a clever spin to it. The longer a blockchain, the more will be the nodes in it. All will compete to verify a new transaction because the first one to do so will bag a fraction of the transaction amount! So, greed motivates miners to keep a blockchain secure and verified.
With cryptocurrency blockchains, the aim is to prevent double-spending of the same coin. Motivated by lust for coins, miners dedicate computational powers and time to verify transactions and ensure that all initiated transactions are genuine and error-free. Environmentalists complain that mining is consuming precious energy reserves. At time of writing, Bitcoin mining is guzzling more power than all-electric cars in the world. In 2018, power demand for Bitcoin mining will be equal to that consumed by Argentina in a year! Surely, this is too large a price to pay for a few Satoshis!
Another catch: there is a limit to the number of Bitcoins in circulation at a given time. Out of the 21 million Bitcoins permissible at a time, 11 million are already generated. So, with each successive day, the mathematical puzzles for miners will become harder. And it certainly doesn’t help that each day thousands of new miners join the blockchain system. The financial model is made so unviable to keep the Bitcoin bubble in control.
Digital Trust- A Myth?
A trust mechanism between miners is established if they are able to satisfy the cryptic protocol on which a particular blockchain is based. The good news is that protocols can be tailored to suit unique needs. Here enters the concept of public and private blockchains. Private blockchains are not entirely public though they are distributed. Entry into these does require validation from a central authority. These are used primarily by banks and large firms to regulate and control accessibility to sensitive official data.
Trust boils down to two factors- identification and authorization. Authorization is by proving your mathematical solution to the chain. Identification of a miner is by his cryptic public and private keys.
Each miner has an encrypted public and private key
A combination of the two keys provides a miner with a completely unique digital signature. It also guarantees ownership of his/her digital assets. Since blockchains are pseudonymous, digital signatures serve to validate a miner’s identity and remuneration.
Digital signatures are unique to each miner and asset unit
So what’s the Verdict?
Hacks are not uncommon with the Interpol calling blockchains “vulnerable” and susceptible to intentional malware that can disrupt its working. But, by far, blockchain technology has shown great promise and tremendous scope. Still in nascent stages, enthusiasts vouch that blockchains will replace notaries and banks sooner rather than later. In fact, any system that hinges on verification and data security can leverage blockchain technology. Presently, 700+ use cases and applications have been discovered. Owing to blockchain’s robust architecture and infallible mathematical logic, it is being viewed as the next big thing in domains such as tokenization, liasioning, and financing.
Blockchain’s peer-to-peer (P2P) network can be used to eliminate expensive intermediaries that were used traditionally to verify monetary transactions. Plus, the verification process is quick and efficient. Moreover, unlike digital wallets like PayTM that rely on bank validations, blockchains are self-reliant and independent. Bitcoin blockchains can store value, keep accurate records and, validate transactions- all in one go- with little expense or time spent. No wonder, it has intrigued even the harshest skeptics.
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In recent years, IoT has entered in the tech scene and is growing in both the terms, be it value or adoption that too at a rapid rate. And being a technological concept, which spans in every single domain or vertical, it is creating wonders, thus creating both disruption and opportunity. Today every bank is looking forward to leveraging these ground-breaking technologies in order to create a better and engaging customer experience. So there’s another brand or company that actually fails because of a lack of faith and determination in terms of IoT security.
Enter the Blockchain’s World
One of the key challenges that are widely accepted by masses in the IoT adoption range is Blockchain. And in a short span of time, it has become a much accepted and distributed database of online records. Basically used in a lot of financial transactions required for the cryptocurrency, Bitcoin. Soon this peer-to-peer Blockchain technology has become popular and can record every transaction in an exchange to form an online trustworthy ledger system. And the key benefits of such system are: it’s permission-based, distributed, and highly secured.
Distribution has become a crucial factor because it allows a shared form, which is required for keeping records safe. So that means every person within a certain range and business network could successfully supervise every transaction done via the Blockchain. And with this, they could trace the record easily back to its source. Nowadays no one has a sole responsibility of the block or transactions that too within the chain and no one can even delete the record. Similarly, no spiteful malware can easily infect the system because others in the ledger will be able to detect the attack, thus could deny its access. Hence it is said to be secured and safe.
Impact on IoT
Blockchain technology – it is being tested by a lot of banks all across the world. So it’s not only available for financial transactions. And any transaction or record could be made a crucial part of the Blockchain. Hence its use could be extended to product identification, digital communications, or even to customer claims. Thus the proper auditing of the validity of the digital transaction between certain machines and things could be particularly used for IoT based mobile apps.
If IoT devices could communicate and interact flawlessly, they must be secured and trustworthy. And Blockchain provides that trust.
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In this rapidly changing technological world, where every day we see new advancements and enhancements, companies are looking to develop a reliable, scalable and functionality driven platform for Internet of Things (IoT). Every big brand and company including Dell, Rolls Royce, and Cisco are spending millions so that they could develop user-centric and proof of concept IoT space that too within organized and controlled environments. In today’s scenario, security is one of the potential threats to IoT solutions. By leveraging IoT, you are imbibing exclusivity – key goal of any business. Let’s understand what Internet of Things (IoT) is:
What Is the Internet of Things?
The Internet of Things (IoT) is something what everyone would have dreamt off. It allows your office and home to automatically turn on lights and other electronic devices like ACs, and Refrigerators etc. as you walk into your office or house. IoT not only connects, but also provides a flawless communication for almost every electronically connected device.
Let’s take an example to understand IoT better, let’ say we have a lamp, which is digitally connected via wifi and suddenly its bulb blazes out. Then IoT could help you in meeting the issue, as it will recognize the issue, suddenly place an order, and will suddenly ship it to your home without a need of person who can do that by lifting a finger.
Above example showed how potential the platform is. And why it’s being pursued by many companies for managing their tasks. So if you are among those who would have been able to successfully develop a robust, secure and highly functional IoT platform, then you are among one who could have successfully adopted the emerging technologies and trends for growing their business. By leveraging IoT, you are imbibing exclusivity and a regular user base: two key goals of any brand or business.
However, there is a crucial challenge that IoT developers must look forward to solve. And that’s Security. If anyone hacked the system and have gained access to IoT platform, that means they have gained control over the whole ecosystem of connected devices, including digital cars like a Tesla, Digitally connected office, house thermostats, and can even purchase systems.
This must be a scary situation for you. And hackers could purposely raise your house temperature upto 100 degree Celsius and could shut off or even trick your car while any of your family members or you is in it. It could prove really dangerous as once hacked they could buy anything or can do any transaction, once they’ve given the access to IoT platform. It’s the law of innovation. Every new innovation comes with the threat that could harm it potential users.
So as per the current scenario, security is one of the potential threats to IoT solutions. And the reason behind this is – its security is limited to account’s name, password, and a Two-Factor control and authorization system. However, there are a lot other solutions to make IoT secured have been explored. One of them is biometrics, which include voice recognition, facial recognition, and fingerprint scanners. As the idea behind biometric security is every person has unique vocal/ facial/ biological characteristics, which can’t be anytime duplicated. Thus these biometrics features could be leveraged to help those who can biometrically identify the access to IoT platform.
But again there’s a lag: biometric verification technology still a far away from implementation. And that could be seen when Apple attempted to use facial recognition on its newly released iPhoneX while giving demonstration and failed. So as we said every technology comes with a lot of drawbacks and advantages. That’s the case with IoT, too.
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