The World Bank, United Nations and a number of other well-known global organizations have turned their heads towards the possibilities of blockchain technology. Seems like the world comes to realize that the future is decentralized. Just like many innovative technologies, blockchain inflames much enthusiasm but also raises numerous questions.
In this article, Safello will explain what is blockchain and why decentralization is inevitable.
What is a blockchain?
Blockchain technology has the potential to advance any operation where people have to access, authorize, transmit or store data securely. This data can take the form of personal ID, shipping history, credit card operations, financial details, medical records and more. As we have previously explained in “Ethereum (ETH): An Introduction”, all information about people and their activities is stored in databases and ledgers. Their centralized nature exposes those systems to unauthorized access which is considered to be a serious and widely-recorded vulnerability. Blockchain technology offers an alternative approach to this problem.
First of all, the technology divides all information into special encrypted blocks. For example, Bitcoin, the first decentralized blockchain application, stores all successful transactions in unique newly created blocks which are replenished every 10 minutes. They use powerful computers and specialized software to record transactions in blocks. Each new block is encrypted using some information from the previous one. Together they form an immutable chain of blocks. Multiple peers on the network have to verify transactions by hashing them correctly. In other words, to produce a block, you need to solve a cryptographic puzzle. The process of searching for the correct numerical values requires a lot of time, energy, and computational power. But in the end, you get a reward — bitcoins. That’s called Bitcoin mining.
Secondly, blockchain offers a decentralized approach to storing data. Each block is duplicated and equally shared around the network of individuals, organizations, regulators or businesses, that’s why it is also called a distributed ledger.
Blockchain and decentralization
As an innovative technology for storing and protecting information, blockchain ensures immutability, security, verifiability, transparency and resilience which can significantly improve and decentralize a great number of sectors from finance to education to healthcare. Blockchain's benefits can also be adjusted to their particular functions to guarantee that challenges such as transparency, accountability, and privacy are effectively handled. This article will discuss two prominent cases of public blockchain application - land administration and blockchain-powered government.
Decentralised land-titling solutions
Land administration has always been one of the most corrupted and shady spheres in Latin America. The ownership and control of land by rich elites at the expense of ordinary people is fundamental to understanding the inequality crisis that has engulfed the world. Swedish company ChromaWay has launched an initiative titled “Distributed Ledger Technology (Blockchain): The Future of Land Titling and Registry”, which puts a primary focus on Bolivia, Peru, and Paraguay. The project aims to investigate how blockchain technology can contribute to solving the vital problems with land titling and registration.
Often referred to as the “city of the future”, the UEA has launched The Dubai Blockchain Strategy as a part of the Smart Dubai Government project. The initiative strives to develop the first blockchain powered government in Dubai, which will focus on 3 strategis pillars: Government Efficiency, Industry Creation, and International Leadership. The project has already unveiled DubaiPay, blockchain-based retail payment app, which supports more than 40 governmental and non-governmental agencies. Dubai Police, the Roads and Transport Authority, Dubai Airpots, Dubai Customs, Dubai Municipality and a numver of other government organizations will join the blockchain platform in the near future.
To sum up
The history of blockchain applications is only 11 years old. There is still a lot of work to be done, puzzles to be solved, and evolutionary leaps to be made. But the future is decentralized and blockchain is a great start for making it into reality.