January 7, 2019

Blockchain: A Specialized Data Platform

As Blockchain continues its rise to widespread mainstream adoption, new use cases will continue to arise and spark innovative development.  As a Blockchain solutions firm, we get asked almost daily if Blockchain can be used as a regular data store similar to SQL and other common relational database management systems.  Almost always our response comes down to the following description of what Blockchain has to offer and how it should be leveraged for specific use cases. As time goes on and increases are made to the scale and transaction speed at which the Blockchain can operate, the use cases for Blockchain will expand into many new fields and scenarios.

“Blockchain” is a general term used to describe a set of capabilities offered by platforms that promote the concept of decentralization. Typically, SQL, No-SQL, in-memory database, and other similar systems are based on the concept of providing a reliable and single central repository of information. These are data stores where the end users have complete trust in the authority that manages the central system. Alternatively, Blockchain is built to offer digital trust across different entities in order to facilitate trustless transactions across these entities.

Blockchain consists of data that is automatically replicated across a network of nodes (in some cases thousands of nodes). The data is stored across the nodes in such a fashion that it is tamper-proof by design. Data is structured cryptographically so that tampering with data in any node invalidates the node while maintaining integrity of data across the network. These platforms also ensure that data is stored in sequence after consensus was reached across different nodes, thus making it an ideal distributed ledger across various parties. Some blockchains even ensure that data is stored in the exact sequence it was received, enabling some very interesting timestamp-sensitive use cases (more on this in our next blog). Each transaction is validated using public-private keys to ensure that the data was sent and received by the right parties. Additionally, these platforms offer the ability to execute code, called smart contracts, on each node based on the occurrence of specific external events or data triggers. Properties such as immutability, reliable replication, secure data sequencing, and smart contracts ensure digital trust across trustless parties.

Blockchain-based data storage is ideal in scenarios where multiple firms or third parties are collectively engaged in transactions and want to conduct business without a intermediary. Some example scenarios where this technology can be utilized include supply chain systems keeping track of goods across different suppliers in the chain, settlement across different entities in a real estate transaction, and trade financing.  In these networks, a digital token is often used as compensation for participants to incentivize or reward them, as well as to discourage poor performance or behavior. Within enterprises, the inherent audit trail capabilities of these platforms make them a good candidate to solve compliance issues involving keeping track of document flow across different groups, as well as reconciliation of data across various internal and external parties.

At this point, initiatives around the world are in progress to store human identity, enable micropayments, digitize illiquid assets, and fulfill numerous other use cases utilizing Blockchain. These large scale deployments could potentially make Blockchain-based applications more mainstream in the next few years. However, it is important to keep in mind that even when Blockchain reaches a high level of adoption, decentralization should be one of the core requirements of the use case in question.

January 3, 2019

Is the Crypto Winter Ending? 5 Blockchain Predictions for 2019

Given the state of the current crypto winter, many of us have seen and heard about a large amount of negative sentiments regarding blockchain and its potential to be a truly game-changing technology.

As a team that has been deeply involved in helping clients build solutions with this technology, we foresee some solid momentum with regards to the applicability and feasibility of blockchain-related products. Below are a few of our predictions as to how blockchain will move forward and evolve in 2019.

1. New guidelines from the SEC and other regulatory bodies will assist the growth & adoption of both blockchain and crypto asset trading.

The SEC has become increasingly more vocal across the community on expressing their point of view. Multiple companies continue to lobby the SEC for a bitcoin exchange-traded fund (ETF) with serious backing from industry powerhouses like the NYSE.

2. There will be a substantial increase in the blockchain transaction speed, which will inspire the development of real life, end-user applications aimed for daily use.

Transaction speed, cost, and scale have all been major hurdles in both enterprise and general mass scale adoption of this technology. The tech community has been working on several platforms, including Hedera Hashgraph, EOS, and others to solve these issues. We expect the capabilities of these platforms to be extremely helpful for building real world applications in 2019.

3. The security token market will gain traction, with tokens being traded on the market for accredited investors that will eventually provide enhanced liquidity.

A lot was written and discussed on security tokens and liquidity in 2018. As platforms like Securrency and Polymath launch ready-to-use capabilities like KYC, token creation, integration to exchanges, and more, the concept of security token and its benefits will finally be realized. We see 2019 as the year of the STO.

4. The need for inter-ledger communication will reach a critical stage, forcing many to build access standards across ledgers.

As a blockchain development firm, more of our applications (DAPPs) now have a need to have a presence in multiple ledgers. Teams are creating quick solutions to solve this issue. This need is becoming common enough for more interledger communication utilities and products to be launched.

5. The usage of compute-heavy proof of work-based logic will continue to be the consensus protocol of the past.

Almost every new blockchain or distributed ledger platform either has some combination of proof of stake and other consensus logic to build consensus. For example, the alternative blockchain Hedera Hashgraph utilizes an innovative gossip protocol to build consensus. We expect Proof-of-work protocol to be primarily used in Bitcoin as it has in the past.

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