The Blockchain Might Be The Next Disruptive Technology

To process a transaction, you need first to make sure the sender owns the asset he wants to transfer, and make sure he will not trade it twice.

In the blockchain, information is stored in blocks that record all transactions ever done through the network. Hence, it allows validating both the existence of assets to be traded and ownership.

To avoid double spending, the technology requests several nodes to agree on a transaction to process it. A validation is also artificially difficult to achieve: miners leverage computer power to solve complex cryptographic problems (the proof-of-work). Every time a problem is cracked, a block is added to the chain, and all the transactions it includes are thus validated. The updated chain, including the new block, is shared with other nodes and becomes the new reference; this process leverages cryptography to prevent duplicate transactions.

New blocks issued are also linked to previous ones, so that it is almost impossible to go back on a transaction. This technology addresses all the issues to validate a transaction, so that processing one doesn’t request a third-party any more: the network replaces institutions. Now, transferring assets through the blockchain is done almost in real time as it takes around 10 minutes to add a new block to the ledger. The complexity of the math problem to solve is increasing with time and computer power. And it is cheaper than ever as miners get rewarded at around 0.0001 Bitcoin (BTC) every time they process a transaction. This is a game changer.

Of course, Bitcoin was the first use case of the blockchain, and the most famous one. Its founder developed this technology to process money transfers and to solve many cryptocurrency issues. Instead of having a central bank that issues money, and banks to validate financial transactions, Bitcoin relies on the blockchain. Abra, for instance, is leveraging this technology to ease money transfers across borders — they rely on Bitcoin to disrupt the remittance market.
But beyond this monetary use, many applications of the blockchain could be explored. And startups are already working on this technology to disrupt industries. Indeed, every time a third-party is involved to process a transaction, the blockchain could replace it.

Overstock developed “tØ” a public equities trading platform based on the blockchain. And in the same area, NASDAQ announced a partnership with Chain a few months ago: They are working on disrupting shares trading by using the blockchain. More generally, financial institutions, like Goldman Sachs or Barclays are teaming up with the startup R3 to create a new framework for the markets based on the blockchain.

A few startups are going even further, and plan to use the blockchain to trade physical assets. Thus, Bitproof and Blocknotary are disrupting contracts by recording them on the blockchain; instead of completing your house sale in front of a notary, just store the contract on the public ledger. Colu, on its side, is using the blockchain to manage property through digital tokens that can unlock either online services or physical objects. This also could be applied to intellectual property. For instance, Verisart is using this decentralized technology to verify art pieces. It encodes copyrights of artwork and records them on the blockchain. ProofOfExistence, as well, is leveraging the public ledger to keep track of files you have created.

To go further, the blockchain could be used to identify people. ShoCard encodes and stores personal information regarding identity. It could enable smart contracts, as well: As soon as terms are met, the contract is processed, thanks to the decentralized infrastructure. IBM is currently working on this application. It also unveiled a partnership with Samsung ADEPT, a proof of concept using the blockchain in the Internet of Things area.

But to go ahead, the blockchain technology needs to fix a few issues. Starting with the network capacity. As we saw earlier, a block is added to the ledger every 10 minutes. Due to the limited size of a block (1MB), the network is restricted to processing 7 transactions per second (tps). This is way far from what VISA can handle, with up to 56,000 tps.
A debate around the block size appeared a few weeks ago and a fork happened in the blockchain: A few miners started increasing block size to 8MB. And this sized is scheduled to double every two years. To solve this debate, if the Bitcoin XT reaches 75 percent of the network, the network will entirely switch to the new block size. More generally, the debate is around whether the blockchain should process a huge amount of transactions for a small transaction fee, or a small number of transactions at a higher rate.

Security is also a threat, as a few Bitcoin trading platforms were hacked or closed, making millions of BTC disappear. This also could happen with assets that could be traded over the blockchain.
These issues highlight the need to have governance, which is a challenge for a decentralized network. But stability is a key success factor for the technology to expand widely.

If Bitcoin has been everywhere for years, its underlying technology — the blockchain — might be the most interesting and disruptive part of it. Indeed, for the first time in history, the technology seems to be able to replace institutions. When the decentralized network replaces third parties, there is a wide range of potential use cases, as it eases and reduces the cost of transactions. Startups are now accelerating on this technology, and famous VC investors, like Marc Andreessen, even compare it to previous tech revolutions: “Personal computers in 1975, the Internet in 1993 and Bitcoin in 2014.”

TechCrunch:http://http://tcrn.ch/1MT5T9V

 

 

« Nuclear Facilities Have Poor Cyber Security
Blackphone: Privacy-obsessed Smartphone »

CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

Cylance Smart Antivirus

Cylance Smart Antivirus

An antivirus that works smarter, not harder, from BlackBerry. Lightweight, non-intrusive protection powered by artificial intelligence. BUY NOW - LIMITED DISCOUNT OFFER.

XYPRO Technology

XYPRO Technology

XYPRO is the market leader in HPE Non-Stop Security, Risk Management and Compliance.

Authentic8

Authentic8

Authentic8 transforms how organizations secure and control the use of the web with Silo, its patented cloud browser.

Cyber Security Supplier Directory

Cyber Security Supplier Directory

Free Access: Cyber Security Supplier Directory listing 5,000+ specialist service providers.

IT Governance

IT Governance

IT Governance is a leading global provider of information security solutions. Download our free guide and find out how ISO 27001 can help protect your organisation's information.

LockLizard

LockLizard

Locklizard provides PDF DRM software that protects PDF documents from unauthorized access and misuse. Share and sell documents securely - prevent document leakage, sharing and piracy.

CYRIN

CYRIN

CYRIN® Cyber Range. Real Tools, Real Attacks, Real Scenarios. See why leading educational institutions and companies in the U.S. have begun to adopt the CYRIN® system.

Syxsense

Syxsense

Syxsense brings together endpoint management and security for greater efficiency and collaboration between IT management and security teams.

Jooble

Jooble

Jooble is a job search aggregator operating in 71 countries worldwide. We simplify the job search process by displaying active job ads from major job boards and career sites across the internet.

CSI Consulting Services

CSI Consulting Services

Get Advice From The Experts: * Training * Penetration Testing * Data Governance * GDPR Compliance. Connecting you to the best in the business.

IT Security House

IT Security House

IT Security House is a leading European supplier of Cyber Security Intelligence and eCrime services.

Shadowserver Foundation

Shadowserver Foundation

Shadowserver Foundation aims to improve internet security by raising awareness of compromised servers, malicious attackers and the spread of malware.

GreyCampus

GreyCampus

GreyCampus is a leading provider of training for working professionals in the areas of Project Management, Big Data, Data Science, Service Management, Quality Management and Information Security.

SecureIoT

SecureIoT

SecureIoT is an EU-funded project and a joint effort of global leaders in IoT services and IoT cybersecurity to secure the next generation of dynamic, decentralized IoT systems.

PatrOwl

PatrOwl

Automate your SecOps with PatrOwl, and start defending your assets efficiently.

Query.ai

Query.ai

At Query.AI, we are committed to helping companies unlock the power of their security data, so they are empowered to meet security investigation and response goals while simultaneously reducing costs.

Cybertronium

Cybertronium

Cybertronium is a leader in managing cyber risk. We bring you the latest from the complex, ever-evolving online threat environment with the insights to inspire and the expertise to act.

Nagios

Nagios

Nagios is a powerful tool that provides you with instant awareness of your organization’s mission-critical IT infrastructure.