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Insolar: Open-Source Blockchain

The blockchain space continues to expand. Many blockchain entities will likely not survive in the next few years.  Yet some of them will become dominant.

It’s too early to determine which will be the winners.  It’s even possible that the future’s largest blockchains have yet to be established.

If we look to the internet and the worldwide web as a potential frame of reference, we might cite WordPress as an example of success for websites.  The internet has its roots in the 1960’s and gained massive adoption in the 1990’s with the introduction of the worldwide web.  WordPress is a web hosting platform that was established in 2003 as an open-source and free online software solution, which has since become the dominant website platform on the web.

It’s not inconceivable that an open-source blockchain could follow a similar trajectory, although such is not guaranteed, since there are a number of factors that can bring about massive adoption, not the least among them being ease of execution, security and cost.

Hence, it’s interesting to see Insolar describe itself as “building an open-source enterprise-grade blockchain platform to enable seamless interactions between companies and new growth opportunities powered by distributed trust.”

Insolar further states that “its code is open source and its research is freely shared; it supports the most popular enterprise languages (Golang and Java); and it allows 3rd party microservices, dApps, and smart contracts.”

Additionally, “Insolar doesn’t require expensive upfront investments in IT labor and infrastructure to deploy; it can be run on the cloud, securely and scalably.”

In this article, Insolar is launching a new blockchain-as-a-service platform, the company outlines their “fourth generation” technology as “an open-source, enterprise-grade blockchain platform and ecosystem that helps companies rapidly and affordably deploy distributed business networks.”

I will be interested to see if Insolar , or some other open-source blockchain, can make a name for itself in the space.

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EOS Update from Brendan Blumer

Brendan Blumer, Block.one Co-Founder and CEO, speaks about their 4 billion investment, creating a new internet infrastructure and allowing people to take control of their privacy.

Block.one is the company behind EOS.IO, which is a blockchain protocol powered by its native cryptocurrency EOS.

EOSIO operates as a smart contract platform and decentralized operating system intended for the deployment of industrial-scale decentralized applications through a decentralized autonomous corporation model. The smart contract platform claims to eliminate transaction fees and also conduct millions of transactions per second.

In the video interview, Blumer describes blockchain as a secure way to store and transfer data. Whereas, the internet was a fundamentally insecure way.

He notes that there won’t be one blockchain for all purposes. Different types of governance will tailor to different types of industries.

Blumer also touches upon blockchain’s innate ability to create transparency, even in Force majeure circumstances.

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What is Blockchain Tokenization?

Tokenization

Tokenization is an intrinsic part of the Blockchain technology that serves the purpose of platform identification and accessibility.

For example. Bitcoin is a token.  And so is Litecoin, Dash, and other currencies that function over a blockchain. While tokens can represent money, as in the examples above, they can also represent other things.

The demand for a particular blockchain product or service is usually the main determinant of the value and eventual market price of its token. This is why there is a variation in the prices of different altcoins in the Blockchain environment. For example, Bitcoin is more readily accepted by merchants than Litecoin, and is consequently more valuable.

Broadly speaking, tokenization is the process of converting some form of asset into a token that can be moved, recorded, or stored on a blockchain system. That sounds more complex than it is. To put it simply, tokenization converts the value stored in some object — a physical object, like a painting, or an intangible object, like a carbon credit — into a token that can be manipulated along a blockchain system.

Blockchain tokenization is powerful because it has the potential of  tokenizing everything from “gas” on the Ethereum blockchain (GasToken), to fine art, real estate, or even “attention” (Basic Attention Token), which have applicability in social media and advertising. There is also the possibility of tokenized governance — making 1 token worth 1 vote in meetings for some organizations.

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The Tokenization of Things

In October 2017, Matthew Roszak discussed how we’re transitioning from an old model where money is used to equal power; changing to “money becoming technology” via the rise of cryptocurrencies and tokenized assets on the blockchain; and ultimately becoming “technology equals power.”

In brief, a token is a scarce, digital asset. Bitcoin was the first.

Roszak states that Bitcoin is one of the greatest inventions of our time. More specifically, it’s one of the greatest technological, financial, political, industrial and humanitarian inventions of our time.

Blockchain is like the rails for Bitcoins (tokens), which represents the cars that run on the rails.

Roszak discusses how things can be tokenized, not just money, resulting in new opportunities for businesses and entrepreneurs.

Blockchain and tokenization is one of the greatest generational opportunities for entrepreneurs and investors. 

He notes how technology generally outpaces regulation and that the early phase of technology adoption includes some risk and uncertainty.

Matthew Roszak is co-founder and chairman of Bloq, a leading blockchain enterprise software company. Mr. Roszak is also founding partner of Tally Capital, a private investment firm focused on digital assets and blockchain-enabled technology with a portfolio of over 20 investments, including Block.One, Civic, Factom, Rivetz and Qtum.

Mr. Roszak is a blockchain investor, entrepreneur and advocate. He has spent over 20 years in private equity and venture capital with Advent International, Keystone Capital Partners, Platinum Venture Partners and SilkRoad Equity, and has invested over $1 billion of capital (from start-up to IPO) in a broad range of industries. Mr. Roszak is a director and beneficial owner of Eboost, Enter Financial, MissionMode, Neu Entity, Onramp, SolidSpace and TrueLook.

Mr. Roszak serves as chairman of the Chamber of Digital Commerce, the world’s largest trade association representing the blockchain industry. In addition, Mr. Roszak serves on the board of BitGive, a no This talk was given at a TEDx event using the TED conference format but independently organized by a local community.

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Vitalik Buterin Explains Ethereum

In 2014, Vitalik Buterin explained decentralized applications (dapps) and Ethereum. He notes that dapps reduce costs, remove points of failure, prevent censorship, promote transparency and trust.

Ethereum borrowed the concept of distributed consensus and cryptographic proof that makes cryptocurrencies such as Bitcoin so effective in trustless payments. Ethereum then extended the use of these technologies to trustless agreements (Smart Contracts). This allows developers to easily build innovative, new products on a collusion-resistant foundation without censorship.

In brief, Ethereum is a platform that makes it possible for any developer to write and distribute next-generation dapps.

Vitalik Buterin is a Russian-Canadian programmer and writer primarily known as a co-founder of Ethereum and as a co-founder of Bitcoin Magazine.

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What Is Hashing in Blockchain?

Blockchain validation relies on data encryption using cryptographic hashing.

Simply stated, a hash function takes some input data and creates some output data.  More specifically, a hash function takes an input of any length and creates an output of fixed length.

And more precisely, cryptographic hashing represents processing the data from a block through a mathematical function, which results in an output of a fixed length. A fixed length output increases security, since anyone trying to decrypt the hash won’t be able to tell how long or short the input is simply by looking at the length of the output.

An ideal cryptographic hash function should have five properties:

  1. It would be deterministic so the same message always results in the same hash
  2. It would be quick to compute the hash value for any given message
  3. It would be infeasible to generate a message from its hash value except by trying all possible messages
  4.  A small change to a message should change the hash value so extensively that the new hash value appears uncorrelated with the old hash value
  5.   It would be infeasible to find two different messages with the same hash value

There are lots of different types of hash functions. One blockchain cryptographic hash function is SHA-256 (designed by the United States National Security Agency). When there is a number such as “256,” it generally refers to the length of the output.  In this case, SHA-256 will produce a 256 bit output. So, an input value of “Hi,” “Blockchain” or “1,000,000” will all have an output of 256 bits (64 English characters).

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Usages of Blockchain

Blockchain represents data and transaction security: unchangeable blocks of data that are decentralized and distributed on public, private or hybrid computer networks. (“Immutable Distribution.”) Blockchain establishes faster, more efficient, more transparent, more accountable and less expensive operations and transactions.  Following are some examples of blockchain usage.

ACCOUNTING AND AUDITING

Blockchain decreases the possibility of errors and ensures the integrity of the records.

HEALTHCARE

Healthcare devices will be able to store data they generate on a healthcare blockchain and append the data to a person’s medical records.

REAL ESTATE

Property blockchains can quickly verify finances, reduce fraud and provide transparency to the entire process.

ENERGY

Blockchain could be used to execute energy supply transactions, as well as metering, billing and clearing processes.

RECORD MANAGEMENT

Governments are responsible for maintaining individuals’ records, such as birth and death certificates. Blockchain can simplify record keeping and make the records far more secure.

VOTING

Every vote can be transparently and irrefutably traced to its source without sacrificing a voter’s anonymity. You cannot change the past and you cannot hack the present and you cannot alter access to the system.

DATA STORAGE

The fact that every computer on the network is continuously verifying the information makes the blockchain an excellent tool for storing public data.

TOKENIZATION

Tokens bind the physical and digital worlds.  Tokens stand as the identity of their respective blockchains, offering access to the services or solutions provided by their resident platforms.  More famously, they also serve as digital assets and opportunities for investment, depending on how much the community values their platforms. In the physical realm, tokens are used for supply chain management, intellectual property identification, anti-counterfeiting and fraud detection. 

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Self-Learning and Self-Starting in the Blockchain Industry

In this brief video by Udacity, Marie Leaf describes herself as a lifelong learner. Leaf built a unique career path that led her to a position in the blockchain industry. She describes how she leverage self-education and her self-starter mindset to pursue the technology-centric career she desired.

Udacity provides online education courses and offers nanodegree programs such as blockchain developer, front-end and senior web developer, full stack web developer, data analyst, machine learning engineer, iOS and Android developer, programming introduction, tech entrepreneur, iOS app development beginning, Ruby beginning, and 2D mobile game developer courses.

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Blockchain Letter-of-Credit Demo

https://youtu.be/37WaD4iEHCI

IBM posted this short video to demonstrate a simple example of real-world blockchain application.

In this example, blockchain provides a small business faster access to credit.  More specifically, what is demonstrated is how blockchain facilitates a small business purchase of a number of computers from an oversea supplier via a letter-of-credit from a bank.  Blockchain facilitates the transaction by making available pertinent information as a transparent and trusted data chain so that all parties can readily identify details to ship the computers and transact payment.

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What is Delegated Proof of Stake?

blockchain technology

Fundamental to different blockchain projects is the manner in which transactions are verified, or more technically speaking, how a “consensus” is achieved to ensure blockchain integrity.

Different consensus algorithms have evolved – and are still evolving – to support efficient blockchain scaling.

To better understand Delegated Proof of Stake, it’s best to grasp what it is intending to improve.

PROOF OF WORK

Proof of Work has been a fundamental consensus solution, which relies upon a network of “miners” to solve a cryptographic puzzle to form network consensus and by that receive compensation for their efforts. However, this method is energy inefficient, restricted in its potential scalability and is vulnerable to undue influence by limited entities, which is antithetical to the decentralized intention of blockchain.

PROOF OF STAKE

Proof of Stake evolved to solve the shortcomings inherent with Proof of Work. It is faster, more scaleable and consumes far less energy. It also doesn’t require special hardware, which further contributes to the intention for a democratization and decentralization of blockhain.

Instead of using miners, Proof of Stake reaches consensus by way of “validators” who stake a certain amount of their earnings to support the system in exchange for rewards. In this case, validators seek to be rewarded for their efforts as in Proof of Work, but the opportunity to achieve that compensation is more decentralized by virtue of the system randomly selecting validators for their support. However, validators can gain greater influence by way of wealth.

Hence, Proof of Stake has evolved to various flavors, and a common variant is called Delegated Proof-of-Stake.

DELEGATED PROOF OF STAKE

Delegated Proof-of-Stake builds upon the original Proof of Stake consensus mechanism and further increases speed and scalability.

Delegated proof of stake uses real-time voting combined with a social system of reputation to achieve consensus. It can be seen as the least centralized consensus protocol compared.

Daniel Larimer invented Delegated Proof of Stake to establish a consensus system that was much faster, used little energy and was more secure via greater decentralization. In this system, community participants (owners of the pertinent cryptocurrency) vote for Witnesses and Delegates to secure and validate their blockchain network.

Witnesses are those who actually do the work of validating the network and reaching consensus and the top witnesses are paid the most.

Due to the remuneration opportunity, there are many who desire to be Witnesses, as well as backup witnesses. Voting is a continuous process and each witness in the top tier is always at risk of being replaced by a user who gets more votes and is therefore considered more trusted.

Users in Delegated Proof of Stake systems also vote for a group of Delegates who oversee the governance and performance of the entire blockchain protocol, but do not play a role in transaction validation and block production.

A drawback of Delegated Proof of Stake is the potential for voter apathy, which, like a political system, could then evolve power into a more centralized system.

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