March 28, 2024
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How will blockchain change the way the world works?

The ideas behind blockchain date back to 1991, but the technology only began to attract more attentionafter the launch of Bitcoin in 2009Bitcoin was created by a person or group of people under the pseudonym Satoshi Nakamoto. Although it is still not known for certain who Satoshi Nakamoto is, his technological innovation has already had a huge impact on the way the world creates and uses money.

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Most blockchains function likea distributed ledger that records and protects digital data using cryptography. This technology is often applied to networks of digital currencies (cryptocurrencies), but its decentralized and secure nature also makes it a powerful tool for many other industries.

With the growth of the cryptocurrency sector and the improvement of blockchain-based solutions, it is very important to know how this innovative technology can be applied in different scenarios.

Eliminating the need for trust and expensivesecurity, blockchain allows for improved efficiency. In addition, the decentralized network can be configured as a transparent database, visible to all participants. In this sense, blockchain technology makes it possible to create a distributed, but at the same time unified registry. This can improve productivity and security in many industries and organizations.(e.g. in charity, supply chains, healthcare, etc.).

Let's try today to understand in detail how and in which industries blockchain technology can be applied and useful. For ease of reading, we have divided the article into areas of application.

Part 1. Blockchain in public administration

: Unsplash

Blockchain technology can improve governanceacross sectors, enabling more democratic, fair and secure governance of networks and operations. Blockchain-based systems eliminate vote fraud and the need for trust during elections and other constitutional processes. They can also be used as a powerful weapon against corruption, improving the integrity and traceability of data in a variety of scenarios, from taxation to the distribution of financial aid.

Why should governments embrace blockchain?

There are a number of important reasons why governmentsit is worth considering the application of blockchain technology. These include improved decentralization, data integrity and transparency, as well as better efficiency and lower transaction costs.

Decentralization and data integrity

There are many different blockchain implementations, but,As distributed systems, they all represent some degree of decentralization. The blockchain network is served by numerous computer nodes(so called nodes), synchronously checking and confirming all data. In essence, they must reach a consensus on the state of the database while retaining a unique version of the truth.

Therefore, blockchain systems are capable ofachieve a high level of immutability, and they can be configured so that only authorized participants can access the information and - in some cases - change it. In practice, various governing bodies could act as validators involved in the distribution and validation of data. This would significantly reduce the likelihood of data tampering and fraud.

In other scenarios as validator nodesNGOs, universities and citizens could also be included, giving an even greater degree of decentralization. In addition, such verification mechanisms can, for example, prevent errors when recording data(a distributed network of nodes will reject a block of data that is missing key information).

Blockchain can also play an important role inelectoral process. Fair and open elections are one of the cornerstones of democracy, and the high level of immutability of the blockchain makes it an excellent solution to ensure that votes cannot be tampered with. In addition to additional protection for votes cast at polling stations, blockchain can also enforce secure online voting. West Virginia provided the first real-world example of such a system during the 2018 U.S. midterm elections.

Transparency

Blockchain-based databases canused to store and protect government records in a way that makes it harder to manipulate or hide information. Under the current model, most government data is stored in centralized databases directly controlled by the authorities. Some of these databases are in the hands of just a few people, making it much easier to manipulate with impunity. In such cases, blockchain is appropriate, since it allows you to distribute the process of verification and data storage among a large number of participants, in fact, decentralizing power.

Thus, the blockchain can be used as a transparent database, reducing(or eliminating)need for trust between citizens andgovernment agencies. For example, some European states are exploring the extent to which blockchain-based registries can reduce the incidence of real estate disputes. Such a model could be based on a distributed system, where both government agencies and citizens have the ability to access and verify it - and each party is able to securely store a copy of official documents and legal claims.

Centralized network (left) versus decentralized (right). : binance.com

Decentralized blockchains are also capable ofoffer continuous access to the data that law enforcement and regulatory agencies need to expose corruption or abuse of power. By reducing or eliminating the need for intermediaries in the exchange of data and financial transactions, blockchain systems can also make it much more difficult for officials to conceal wrongdoing when they channel funds through a series of opaque private entities.

Increased efficiency

Another reason to use blockchain inmanagement - reducing transaction costs due to the fact that the efficiency of the work of state institutions is maximized. Since governments rely on taxpayer funds, it is important that they use their budget wisely. Blockchains and smart contracts allow you to automate tasks and work operations, which will significantly reduce the time and money spent on bureaucratic processes.

Although the reduction in administrative costs is alreadyWhile extremely practical in themselves, they can also improve citizens' trust and satisfaction. Greater efficiency and lower costs are likely to lead to higher approval ratings from the authorities. By lowering transaction costs, governments can invest more in other areas such as education, security, and health care.

Taxation is another key sectorgovernment where blockchain technology can be applied. Blockchain-based registries can easily transfer funds between parties in accordance with specified conditions. This can potentially significantly reduce the administrative costs associated with the collection and distribution of tax money and tax compliance. For example, by storing records and processing receipts on private blockchains, tax authorities can also provide improved security to protect taxpayers from fraud or identity theft.

Disadvantages and limitations

While it is clear that blockchain has the potential to improve data integrity, transparency and efficiency, there are a number of limitations associated with its use in the public sector.

Interestingly, the immutability property is one ofthe main advantages of blockchain, in some cases can also be a disadvantage. Due to the immutability of the data, it is important that the information is entered correctly before being validated, which means that steps must be taken to ensure the accuracy of the collected data.

Although a more flexible implementation of the blockchain is possible, allowing data to be changed, this requires approval(consensus)most validator nodes, which canraise questions about the decentralization of the system and lead to disagreements. However, this disadvantage can be quickly eliminated in private blockchains that do not require a high level of decentralization.

The issue of confidentiality is also relevant,since the data added to the blockchain will always be visible to everyone who has access to it. This may be in conflict with procedures for blocking access to documents, such as clearing a criminal record. In countries that recognize the digital right to be forgotten, these immutable records may also be contrary to existing laws or judicial precedents. A potential solution to these problems could be the use of burn functions and cryptographic techniques such as zk-SNARK or other types of zero knowledge proofs.

Finally, it is worth noting that the obstacle toimplementations can be governments themselves. In some cases, the authorities simply do not understand the value of blockchain technology and, because of this, neglect many of the potential benefits. In more extreme cases, governments, where corruption is widespread and entrenched, may resist blockchain adoption to protect their own interests.

Despite potential disadvantages,blockchain systems can be applied in public administration. From improving transparency to optimizing taxation, distributed networks can help governments operate more efficiently and generate more trust in citizens. While some applications are still only hypothetical, many countries are already experimenting with them.

: Medium

It should be noted that digital systems are usedin public administration since the early 2000s, long before the creation of the blockchain. A good example is Estonia, which launched a digital identity program in 2002, and in 2005 became the first country to hold elections on the Internet. In 2014, the Estonian government launched an e-residency program that mentions the use of blockchain technology to manage and protect digital data.

Part 2. How blockchain will transform the banking industry

photo: RIA Novosti

How can blockchain change banking?

In the global economy, banks are oftenintermediaries coordinating the financial system through their internal registries. Since these registries are not publicly available, it forces confidence in banks and their often outdated infrastructure.

Blockchain technology is potentially capable oftransform not only the global foreign exchange market, but also the banking industry as a whole, removing intermediaries and replacing them with a trustless, borderless, transparent system that anyone can easily access.

Blockchain can facilitate faster andcheap transactions, increase the availability of capital, improve data security, secure contracts without the need for trust using smart contracts, simplify compliance, and much more.

In addition, thanks to the innovative structure of the blockchain, the interaction of new financial elements can lead to completely new types of financial services.

What are the top benefits of blockchain for banking and finance?

  • Security:Blockchain-based architecture eliminates a single point of failure and reduces the need to trust data to intermediaries.
  • Transparency:Blockchain standardizes common processes and creates a single source of truth for all network participants.
  • The trust:Transparent registries make it easier to communicate and reach agreement between different parties.
  • Programmability:Blockchain makes possible the reliable automation of business processes through the creation and execution of smart contracts.
  • Privacy:The privacy technologies made possible by blockchain allow businesses to selectively share data.
  • Productivity:Networks are designed to handle large numbers of transactions while maintaining interoperability between blockchains.

Fast money transfers using blockchain

Sending money in the current banking systemcan be a long process, accompanied by various commissions for both banks and clients, and require additional verification and administration. In the age of instant communications, traditional banking has fallen behind technological developments.

Blockchain technology provides fastera way of making payments with lower fees, available around the clock, without borders and with the same security guarantees that the old system could offer.

Fundraising directly on the blockchain

Historically, entrepreneurs who neededto raise funds, relied on external sources: business angels, venture investors or bankers. It can be a complex process that requires lengthy negotiations about value, ownership interest, company strategy, and more.

Initial Coin Offerings (ICOs) andexchange-traded offerings (IEOs) give start-up projects the opportunity to raise funds without the need for banks and other financial institutions. Blockchain-backed ICOs allow companies to sell tokens to receive funding with the expectation that the tokens will generate income for investors. Traditionally, banks have charged huge fees for securitizing businesses and organizing initial public offerings (IPOs), but blockchain technology allows this to be avoided.

It is important to note that while ICOs candemocratize fundraising, they also have drawbacks. The relative ease of organizing ICOs has allowed projects to raise significant sums without any formal or specific requirement to keep promises. The ICO market remains largely unregulated and therefore carries significant financial risks for potential investors.

Tokenization of assets on the blockchain

Buying and selling securities and other assets,such as stocks, bonds, commodities, currencies and derivatives, requires a complex, coordinated interaction of banks, brokers, clearing houses and exchanges. This process must be not only efficient but also accurate. The added complexity is directly related to the increased cost of time and money.

Blockchain simplifies this process by providinga technological baseline for easy tokenization of assets of all types. Since most financial assets are bought and sold digitally through online brokers, their tokenization on the blockchain seems like a convenient solution for all stakeholders.

Interesting topics: Tokenization of traditional assets

Some innovative blockchain companies are exploringtokenization of real assets such as real estate, works of art and commodities. So transferring ownership of assets that have real value can be cheap and convenient. It will also open up new opportunities for investors with limited capital, allowing them to buy partial ownership of expensive assets - investment products that were previously unavailable to them.

Lending using blockchain

More income → more credit → more expenses → more income. : binance.com

Banks and other lending firms monopolizedthe lending sector, which allowed them to offer loans at relatively high interest rates and limited access to capital depending on the credit rating. This makes the process of obtaining a loan long and expensive. While banks benefit from this, the economy depends on providing the necessary funds for high-value goods such as cars and housing.

Blockchain technology allows everyone to participate ina new credit ecosystem that is part of a movement often called Decentralized Finance (DeFi). To create a more accessible financial system, DeFi is looking to move all financial applications to blockchain.

Peer-to-peer lending made possible byblockchain allows everyone to borrow or lend money easily, simply and inexpensively without arbitrary restrictions. Due to greater competition, banks will also be forced to offer better terms to their customers.

Read on topic: For the first time in Russia, a loan was issued secured by cryptocurrency

The Impact of Blockchain on Global Trade Finance

Participating in international trade is very inconvenientdue to the huge number of international rules and regulations for importers and exporters. Tracking items and going through each stage still requires manual processes, with handwritten documents and registers.

Blockchain technology allows you to achieve moretransparency in trade finance thanks to a shared ledger that accurately tracks goods around the world. By simplifying and streamlining the complex world of trade finance, blockchain technology can significantly save importers, exporters and other businesses time and money.

Safer contracts thanks to smart contracts

Contracts exist to protectpeople and businesses when they enter into agreements, but this protection comes at a high cost. Due to the complex nature of contracts, the process of creating them requires a lot of manual work from lawyers.

Smart contracts allow you to automatecontracts using tamper-proof, deterministic code running on the blockchain. Money can safely remain in escrow storage and will only be unlocked if certain conditions of the contract are met.

Smart contracts significantly reduce the element of trust required to reach an agreement, minimizing the risks of financial contracts and the likelihood of litigation.

Data integrity and security thanks to blockchain

Providing data to intermediaries always carries the risk of data leakage. In addition, many financial institutions still keep paper documents, which significantly increases costs.

Blockchain technology allows you to automatedata verification and accounting, digitize customer identification (KYC) and anti-money laundering (AML) processes, and validate financial documents in real time. This helps reduce operational risk and fraud and reduces data handling costs for financial institutions.

The banking and financial industry is one of themajor sectors that will experience the impact of the blockchain. There are many potential uses, from real-time transactions to asset tokenization, lending, international trade facilitation, more secure digital contracts, and more.

Removing all technological and regulatory barriers to realizing the full potential of this new financial infrastructure seems like a matter of time.

The banking and financial sector, built on nona trustworthy, transparent and borderless basic level should effectively contribute to a more open and interconnected economy.

Part 3. Blockchain in supply chains

: Medium

A supply chain is a network of people and businessesinvolved in the creation and distribution of a particular product or service - from primary suppliers to end users and clients. The simplest supply chain often involves food or raw material suppliers, manufacturers(processing stage), logistics companies and end retailers.

Most supply chains facemany obstacles related to transparency and efficiency. The current governance system continues to rely on trust and far from ensuring proper integration of stakeholders and parties.

Currently, the chain management systemsupply chain suffers from a lack of efficiency and transparency, and most networks find it difficult to integrate all participants. Ideally, products and materials, as well as money and data, should run smoothly through the various stages of the value chain.

However, with today's model, it is difficult to maintain a coherent and efficient supply chain - which negatively affects not only the profitability of companies, but also the final retail price.

Blockchain technology can solve some of thethe most pressing supply chain issues as it provides new ways to record, transmit and share data. It can be used to track the entire process of creating and distributing goods in the supply chain. A distributed database is well suited for securely recording any information, ensuring the authenticity of products, as well as transparency of payments and transportation.

Benefits of using blockchain in supply chains

Since blockchains aredistributed systems, they are extremely resilient to change and very well suited for supply chains. A blockchain consists of a series of blocks of data linked using cryptographic techniques that ensure that the data cannot be changed - unless the entire network agrees.

Thus, blockchain systems providea secure and reliable architecture for transmitting information. Although it is often used to record cryptocurrency transactions, blockchain technology can be extremely useful for protecting all kinds of digital data, and there are many benefits to its application to supply chains.

Transparent and immutable records

Introduce several collaborating companies andinstitutions. They can use a blockchain system to record the location and owner of materials and products. Anyone in the supply chain can see what happens when resources move from one company to another. Since the recorded data cannot be changed, there will be no question as to which side is responsible if something goes wrong.

Reducing costs

Supply chain inefficiencies lead to highlosses. This problem is especially relevant in those industries that deal with perishable goods. Better traceability and data transparency will help companies identify where losses are occurring so that they can take action to reduce costs.

Blockchain can also eliminate fees,associated with the passage of funds through various bank accounts and payment systems. These commissions reduce profits, so eliminating them from the equation is important.

Creation of interoperable data

One of the most significant problems of the currentsupply chain is the inability to integrate data from all participants in the process. Blockchains are distributed systems with unique and transparent data storage. Each network node(each participant)adds new data and checks itintegrity. This means that all information stored on the blockchain is available to all participants, so that one company can easily verify the information transmitted to another.

Replacing EDI

Many companies rely on EDI standards to send information to each other.(electronic data interchange)... However, this often does not send data toreal time, but with a certain frequency. If a shipment does not arrive or prices change quickly, other participants in the chain will only receive this information with the next EDI package. With blockchain, information is updated regularly and can be quickly shared with all participants.

Digital contracts and document exchange

For document exchange in any supply chainWhat is important is a single source of truth. Necessary documents and contracts can be linked to transactions and digital signatures on the blockchain so that all participants have access to them.

The blockchain guarantees the immutability of documents, andtreaties can only be changed if all parties reach consensus. That way, organizations can spend less time getting their lawyers to handle paperwork or negotiating, and more time developing new products or developing a business.

Challenges for implementing blockchain in supply chain management

While blockchain technology has tremendous potential for the supply chain industry, there are a number of challenges and constraints worth considering.

Implementation of new systems

Systems specially built for chainssupply organizations may be unable to adapt to the blockchain environment. Modernizing a company's infrastructure and business processes is a daunting task that can disrupt operations and drain resources from other projects. Therefore, management may hesitate to make such investments until they see the massive adoption of new technology by key players in the industry.

Involvement of partners

Supply chain partners alsomust be ready to join blockchain technology. Although even blockchain coverage of only a fraction of the processes gives companies advantages, the resistance of partners does not allow them to unleash their full potential. Also, not all companies want transparency.

Change management

When a blockchain system is implemented, businesses mustteach it to your employees. A change management plan should cover what blockchain is, how it improves their performance, and how to work with the systems that use it. A lifelong learning program can cover new options and innovations in blockchain technology, but this of course takes time and resources.

Perspectives

A number of major players in the supply chain industryare already implementing blockchain-based distributed systems and committing resources to promote their use. We will likely see global supply chain platforms using blockchain technology to optimize the exchange of information between companies in the process of supplying products and materials.

Blockchain technology has the power to transformorganizations in many ways, from production and processing to logistics and accounting. Each event can be logged and verified to create a transparent and immutable ledger. Therefore, the use of blockchain in supply chains can definitely eliminate inefficiencies inherent in traditional management models.

Part 4. Blockchain in international money transfers

: Medium

Money transfers between people who are far from each other are a very necessary service in the modern world. For example, it is often used by labor migrants to send money home.

International remittances represent the largest inflow of funds to developing countries today, surpassing foreign direct investment and official development assistance.

According to the World Bank Group, the international remittance industry has experienced significant growth in recent years:by 8.8% in 2017 and by 9.6% in 2018

Some developing countries are highly dependent onfunds coming from abroad, making international remittances a significant part of their economy. That is, one of the main sources of income for such countries today is remittances from labor migrants. For example, in 2017, international transfers to Haiti accounted for 29% of the country's GDP. In 2018, this figure rose to 30.7%.

Problem

According to the World Bank, the average commission withinternational transfer of $ 200 is now 7%. Since international transfers amounted to $ 689 billion in 2018, 7% is approximately $ 48 billion in operating costs.

In addition to high fees, most solutions forinternational transfers rely on third parties such as various services and financial institutions. The need for a range of intermediaries makes the current system highly ineffective. Not only because the services are expensive, but also because the translation can take several days or even weeks.

In this context, blockchain technology canoffer the international translation industry a viable and more efficient alternative. Blockchain technology has already proven to be highly effective in international money transfers. Sending cryptocurrencies to friends, family and others anywhere in the world is already cheaper and faster compared to what centralized banks and payment solutions offer.

In addition, centralized sites and applicationsdo not allow users to control their data and often do not reward them according to the true value they bring to the platform. Decentralized Applications(dApp)blockchain-based eliminates middlemen and offers users lower fees, better incentives and increased transaction efficiency, while also allowing them to send and receive digital money.

As Vitalik Buterin said, blockchain solutions allow people to interact with each other directly, eliminating the need for intermediaries or centralized systems:

“While most technologies automateperipheral workers performing routine work, blockchains automate and eliminate the center. Instead of taking taxi drivers out of their jobs, blockchain is taking Uber out of jobs and allowing taxi drivers to work directly with customers. "

Let's consider some of the possibilities and existing solutions, as well as examples of companies working on this task.

Does blockchain solve the problem?

The main goal of companies using blockchain forinternational transfers - to simplify the whole process by eliminating unnecessary intermediaries. The idea boils down to providing seamless and near-instant payment solutions. Unlike traditional services, blockchain does not rely on a slow transaction confirmation process that usually goes through multiple intermediaries and requires a lot of manual work.

The blockchain system is capable of conducting internationalfinancial transactions based on a distributed computer network. This means that a number of computers are involved in the process of verifying and confirming transactions - and this can be done in a decentralized and secure manner. Compared to traditional banking systems, blockchain technology can offer faster and more reliable payment solutions at significantly lower costs.

In other words, blockchain is able to solvesome of the main problems of the international transfer industry, such as high fees and long transaction times. Transaction costs can be significantly reduced by simply eliminating intermediaries.

Areas of use

Mobile applications

: BitNews

Many companies are now experimenting withblockchain technology to offer new payment solutions. Some mobile crypto wallets allow users to not only send and receive digital assets around the world, but also quickly exchange cryptocurrency for fiat currency.

An example of a mobile application with such options&#8212; Coins.ph. Users can not only make international transfers, but also pay bills, buy in-game credits, or simply trade Bitcoin and other cryptocurrencies. Some financial services also do not require a bank account.

Digital platforms

Some companies use infrastructuredirectly interacting with the traditional financial system. For example, BitPesa is an African online platform using blockchain technology. Founded in 2013, it offers payment solutions and currency exchange with lower fees and faster speeds.

Stellar protocol is another exampleblockchain platform serving international payments. Stellar was founded in 2014 with the goal of promoting affordability and connecting people and financial institutions around the world.

Calculations on the Stellar network take place indistributed ledger and using its own currency - lumen (XLM). This internal token can be used as an intermediate currency to facilitate exchange between fiat currencies and cryptocurrency assets. Similar to BitPesa, people and financial institutions can use the Stellar platform to send and receive money with lower fees.

ATM machines

: BitNews

Along with mobile apps andonline platforms, ATMs can offer an interesting solution for sending and receiving money around the world. This approach can be especially useful in underdeveloped regions where there is still no good internet connection or banking system.

Companies like Bit2Me and MoneyFi are developing new money transfer systems that combine blockchain technology with ATMs. Their goal is to issue prepaid cards with broad functionality.

Combining blockchain with ATMs cansignificantly reduce the need for intermediaries. Users don't need a bank account, and ATM companies are likely to charge a small fee.

Current challenges and restrictions

While there is no doubt that blockchain technology canto give the international translation industry many benefits, there is still a long way to go. Some potential obstacles and major limitations, as well as possible solutions:

  • Conversion between cryptocurrencies and fiat currencies.The global economy is still based on fiatcurrencies, and conversion between them and cryptocurrencies is not always an easy task. In many cases a bank account is required. Peer-to-peer (P2P) transactions can eliminate the need for a bank, but users may need to withdraw cryptocurrency into fiat currency in order to use the money.
  • Dependence on mobile technologies and the Internet.Millions of people living in underdevelopedcountries still do not have access to the Internet, and many do not even have a smartphone. As mentioned, blockchain-compatible ATMs can partially solve this.
  • Regulation.Cryptocurrency regulation is still pendingvery early stages. It is unclear or non-existent in a number of countries, especially those that rely on inflows of funds from abroad. But further development of blockchain technology will definitely lead to progress in regulation.
  • Complexity.Use of cryptocurrencies and blockchain technologyrequires certain technical knowledge. Most users still rely on intermediaries because using the blockchain on their own is not an easy task. Also, many crypto wallets and exchanges still lack accessible instructions and an intuitive interface.
  • Volatility.Cryptocurrency markets are still immature and subject tohigh volatility. Consequently, they are not always suitable for everyday use as their market value can change quickly. Additionally, highly volatile currencies are not very suitable for those who simply want to transfer money from one point to another.

International translation industry latesthas grown substantially for ten years and is likely to continue to expand in the near future. Perhaps one of the main reasons is the increase in migration for the sake of work or education. According to the 2018 World Migration Report, there were about 244 million international migrants in 2015 - about 57% more than 155 million in 2000.

However, the field of international transfers is stillsuffers from inefficiencies and limitations. As a consequence, many companies are embracing blockchain technology to offer more efficient alternatives, and it is likely that we will see an increase in its use among migrant workers in the near future.

Part 5. Blockchain in healthcare

The healthcare sector is one of the most frequentlyDiscussed use cases for blockchain alongside philanthropy and supply chains. Operational constraints, data errors, and bureaucracy pose significant challenges in the healthcare industry. Blockchain has several uses in healthcare, including tracking drug supply chains and managing patient data.

In addition, blockchain is able to offerhospitals have significant security benefits as these institutions are often attacked by hackers due to the value and important role of the data they store.

Companies are exploring the use of blockchain forstorage of digital medical information. Such solutions can reduce overall costs while also improving data privacy and accuracy. What aspects of blockchain make it suitable for healthcare?

Benefits of using blockchain in healthcare

Some properties that allow cryptocurrenciesblockchains serve as secure ledgers of financial transactions, and are applicable to the storage of medical data. Since most blockchains are distributed systems that record and protect information using cryptography, it is extremely difficult to change or compromise data without the approval of all network participants. Consequently, immutability is one of the properties that make it possible to create reliable medical databases.

Also, the peer-to-peer architecture usedin blockchains, allows you to synchronize all copies of patient data as they are updated, despite the fact that they are stored on different computers. Each network node keeps a copy of the entire blockchain and regularly contacts others to ensure that the data is up to date and authentic. Thus, decentralization and data distribution are also important aspects.

It is worth mentioning that blockchains are distributed, but not always decentralized(if we talk about management)... Decentralization is not something binary,therefore, depending on how the nodes are distributed and on the overall architecture, distributed systems can have varying degrees of decentralization. In the healthcare context, blockchains are usually created as a private network, as opposed to public networks commonly used by cryptocurrency ledgers. While anyone can join the public blockchain and participate in its development, frequent versions require permission and are managed by fewer nodes.

Potential Benefits

Enhanced security

As mentioned, one of the most important applications of blockchain in healthcare is the creation of secure and unified peer-to-peer(distributed)databases. Thanks to the immutability of the blockchain, concerns about data corruption disappear. Blockchain technology makes it possible to efficiently record and track the medical data of thousands of patients.

Unlike traditional databases,relying on a centralized server, using a distributed system allows data exchange with a higher level of security, while at the same time reducing administrative costs. The decentralized nature of blockchains also makes them less vulnerable to technical failures and external attacks, often leading to the leakage of valuable information. The security provided by blockchains can be especially useful for hospitals facing frequent attacks by hackers and ransomware viruses.

Interoperability

Another advantage of medical registries onthe basis of blockchain is their ability to improve interoperability between clinics, hospitals and other healthcare facilities. Due to technological differences in data storage systems, it is often difficult for organizations to exchange documents. However, blockchains can solve this problem by providing authorized members with access to a single patient database or even drug distribution registries. Thus, instead of trying to interact with each other's internal repositories, institutions can work with one common one.

Accessibility and transparency

Besides the fact that blockchain systems simplifythe process of sharing data, they can also give patients better accessibility and transparency of their health information. In some cases, the need to confirm changes to patient records can ensure the accuracy of the records, and when used correctly, such verification can provide additional protection against both human error and deliberate falsification.

Reliable supply chain management

Blockchains can provide a reliable waytracking pharmaceuticals at all stages of their production and distribution, solving the common problem of counterfeiting. Combined with IoT devices used to measure factors such as temperature, blockchain technology can also be used to monitor proper storage and transport conditions, or to validate the quality of drugs.

Insurance Fraud Protection

Blockchain can also be used to combathealth insurance fraud, a problem that is estimated to cost the American healthcare system an estimated $ 68 billion annually. Immutable records stored on the blockchain and available to insurance companies can prevent some of the most common types of fraud, such as billing for procedures that were not carried out, or for unnecessary services.

Finding volunteers for clinical trials

Another use of blockchain in healthcare isit is about improving the quality and efficiency of clinical trials. Medical data on the blockchain can be used to find patients who can be helped by the drugs being tested. Such a system can significantly improve the recruitment of volunteers in clinical trials, since many patients are unaware of drug trials and therefore cannot participate in them. When tested, blockchains can guarantee the integrity of the collected data.

Potential Limitations

Although blockchain offers many benefits likefor both patients and healthcare institutions, it still needs to overcome a number of obstacles in order to achieve widespread acceptance in the medical sector.

Compliance with legislation

Taking the United States as an example,healthcare companies interested in adopting blockchain technology must comply with existing data regulations such as the Health Insurance Portability and Accountability Act (HIPAA) 1996. HIPAA describes standards for the storage, exchange and protection of data in the healthcare sector. To fully comply with the law, US companies need to use customized blockchain systems with improved privacy options and limited access.

Initial cost and speed

Blockchain solutions are likely to requiremedical institutions have a large initial investment, which definitely hinders wider adoption. In addition, distributed systems are significantly slower than centralized systems in terms of the number of transactions per second. A large blockchain network with many nodes is likely to take longer to transfer and synchronize data compared to centralized systems. This is especially true for huge databases that need to store and track information about millions of patients. The problem is even more serious in the case of large image files such as CT and MRI scans.

So blockchain networks have a number of promisingapplications in the healthcare sector, from creating immutable medical records to increasing transparency in pharmaceutical supply chains. Despite some technical, logistical and regulatory challenges, the implementation of such systems may play an important role in the storage and transmission of medical data in the future.

Part 6. Blockchain in charity

: BitNews

Many charities aroundthe world is faced with the challenges of resource management, operational transparency and good governance. Blockchain technology can definitely help such funds optimize the process of receiving and distributing funds.

There are already remarkable examples of implementationblockchain technologies to charities such as the Blockchain Charity Foundation (BCF), a non-profit organization working with sustainable development goals to fight poverty and inequality and promoting philanthropy using blockchain around the world.

Barriers often include a lack of transparency, accountability issues, and restrictions on how donations can be accepted. Cryptophilanthropy(or using blockchain technology to facilitate charitable donations)offers an alternative solution, with decentralized and direct transactions, that will help these organizations receive donations and run fundraising campaigns more efficiently.

Cryptocurrency donations

The global adoption of cryptocurrencies is still a long way off, butwhen it comes to charity, this is an especially long road. But there are already a number of charities that use cryptocurrency as a way to transfer donations.

Donors willing to use for donationscryptocurrency can either focus on the few organizations that support them, or donate large enough to convince their favorite charities to accept crypto payments.

Before the charity startsto accept cryptocurrency donations, you need to develop a process for transparent and efficient management and distribution of funds. It is important to understand the basics of cryptocurrencies and blockchain technology, as well as how donations can be converted to fiat currency.

Potential Benefits of Cryptophilanthropy

Cryptophilanthropy promises a number of notable benefits for philanthropists and charities:

  • Full transparency:Each cryptocurrency transaction is unique, which meansmeans it can be easily traced on the blockchain. Greater levels of transparency and public accountability will attract donors and also enhance the charity's reputation.
  • Decentralization and Global Access:Most blockchain networks have a high leveldecentralization, which means they do not have to rely on centralized government or other institutions. In this way, funds can flow directly from donors to charities; In addition, the decentralized nature of blockchain makes it especially suitable for international transactions.
  • Digital contracts:Blockchain simplifies the exchange and storage of digital data and can also be used to ensure that important documents or contracts are not changed without the approval of all participants.
  • Less costs:Blockchain technology can simplify the management of charities by automating some processes and reducing overall costs by requiring fewer intermediaries.
  • Less taxes:Taking the US donor as an example, if the donation is made in Bitcoin, then the charity will receive the full amount(no capital gains tax will be charged)... In addition, the donor may request a larger tax credit from the government.

Challenges and limitations

Despite the potential benefits, there are potential barriers to consider when considering cryptophilanthropy:

  • Volatility:Apart from stablecoins, most cryptocurrencies are traded in highly volatile markets and are often subject to large fluctuations in value.
  • Security:If the private keys giving access todonated funds are lost and cannot be restored. Likewise, if keys are not stored properly, an attacker can gain access to wallets and steal funds.
  • Public awareness and understanding:Most people consider blockchain to be verycomplex, and many potential donors do not understand the basics of cryptocurrencies enough to trust the system or use it for charitable donations.

Real examples

In recent years, cryptophilanthropy has been taken up bysome prominent charities. For example, in 2017, the global philanthropic organization Fidelity Charitable received $ 69 million in cryptocurrency donations.In the same year, an anonymous donor, pseudonym Pine, sent $ 55 million in bitcoins to various organizations around the world through the Pineapple Fund.

Blockchain Charity Foundation (BCF) is another onea remarkable example of cryptophilanthropy. BCF is a nonprofit organization committed to transforming philanthropy through a decentralized giving platform.

Cryptophylanthropy is still relatively newmethod of receiving and distributing donations. But as blockchain technology becomes more widespread and familiar, charities and donors may increasingly turn to it as an attractive way to help those in need. It is reasonable to assume that as this type of donation becomes more acceptable to the public, charities will become more active in using cryptocurrency.

Part 7. Blockchain and digital identity

: BitNews

Digital identity is perhaps one of the mostpromising applications of blockchain technology. Every year, millions of people around the world are faced with a personal data breach. There is a clear need for more secure methods for storing, transferring and verifying confidential information. In this context, blockchain systems can offer valuable solutions to some of the problems faced by most centralized databases.

How can blockchain be applied to digital identity systems?

In essence, when information is written toblockchain, its authenticity is guaranteed by the nodes that control the network. In other words, the validity of all recorded data is validated by a group of disparate users.

In this scenario, network nodes canbe controlled by the authorized bodies or government institutions responsible for the verification and validation of digital data. In fact, each node can "vote" for the authenticity of the records, so that such data can be used like regular official documents, only with increased security.

The role of cryptography

It is important to understand that an identification system based onblockchain does not require direct or explicit provision of confidential information. Instead, digital data can be provided and verified using cryptographic techniques such as hash functions, digital signatures, and zero knowledge proofs.

Using hashing algorithms any documentcan be converted to a hash - a long string of letters and numbers. In this case, the hash represents all the information that was used to create it. In addition, government institutions or other trusted entities can provide digital signatures to give legal validity to a document.

For example, a citizen can provide hisdocument to the authorized body to generate a unique hash. The authority can then create a digital signature confirming the validity of the hash, which means it can be used as an official document.

Also, zero knowledge proofallows you to share and verify personal data without disclosing any information about it. That is, even if the data is encrypted, you can still confirm its authenticity. In other words, zero-knowledge proof can be used to prove your age allows you to drive or join a club without revealing your exact date of birth.

Sovereign identity

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Sovereign identity refers to a model where each user has full control of their data, which can be stored in a personal wallet(resembling a crypto wallet)... In this context, you can independently decidewhen and how to share personal information. For example, you can store your credit card information in your wallet and then use your private key to sign transactions that transmit that data. This way you can prove that you are really the owner of the card.

Although blockchain technology is mainly usedfor storing and sending cryptocurrencies, it can also be used to exchange and confirm personal documents and signatures. For example, if a government agency grants someone accredited investor status, this information can be sent to the brokerage firm using a zero knowledge proof protocol. Consequently, the brokerage firm will be confident that the investor is properly accredited, without detailed information on his capital or income.

Potential Benefits

Applying cryptography and blockchain to digitalidentification can provide at least two important advantages. First, users will have better control over how and when their personal information is used. This will significantly reduce the risks associated with storing personal data in centralized databases. Also, blockchain networks are able to provide better privacy through the use of cryptographic systems. As mentioned, zero knowledge proof allows users to prove the validity of their documents without having to share additional information.

The second advantage is that the systems are digitalblockchain-based identifications can be more reliable than traditional ones. For example, it is relatively easy to verify the origin of claims about a user with digital signatures. In addition, blockchain systems make it more difficult to counterfeit information and can effectively protect all kinds of data from fraud.

Possible limitations

As with other blockchain applications,the use of this technology in digital identification systems presents a number of challenges. Perhaps the hardest problem is the fact that such systems will still be vulnerable to so-called synthetic identity theft.

Synthetic identity is whenactual information about different people is combined to create a completely new identity. Since every piece of information used to create a synthetic identity is correct, some systems may mistake fake data for authenticity. Such attacks are actively used by criminals in credit card fraud.

However, the problem can be mitigated by usingdigital signatures so that fake data combinations will not be accepted by the blockchain. For example, a government institution can issue digital signatures for every document, but also a common digital signature for all documents registered by one person.

Also noteworthy is the possibility of 51% attacks,which are more likely on smaller blockchain networks. A 51% attack can reorganize the blockchain, essentially changing its records. This problem is especially relevant for public blockchains, where anyone can join the block verification and confirmation process. Fortunately, private blockchains can reduce the likelihood of such attacks as they will only add verified validators. However, such a model will be more centralized and less democratic.

Despite its shortcomings and limitations, technologyblockchain has tremendous potential to change the way digital data is verified, stored and sent. While many companies and startups are already exploring the possibilities, there is still a lot to be done. However, in the coming years we will definitely see more services focusing on digital identity. And, most likely, blockchain will play a central role in them.

Part 8. Blockchain and the Internet of Things

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What is the Internet of Things?

Since the beginning of the digital revolution in the 1950s,a wide range of new technologies. Initially, the industry employed a small number of people, but it developed very quickly and most of the innovative technologies became more widespread and accessible.

The convergence of various new devices(such as RFID chips, sensors and the Internet)and their increasing availability gave rise to the concept of the Internet of Things (IoT). IoT technology marks an important milestone in the computer era, when more than just computers can be connected to the Internet.

History of the IoT

The first known use of IoT was recorded inMassachusetts Institute of Technology, where students used cheap sensors to track and refuel a soda machine. Significant progress in IoT was made in 1994, when a journal article by Reza Raji was published, in which he proposed the idea of ​​forwarding data packets to automate homes and factories.

In the 1990s, they began with similar ideasexperimenting by Microsoft and a number of other companies, and since 2002 breakthroughs in the IoT, such as the use of "smart" devices connected to each other and to the information tracking system, have been actively discussed in the media. Nevertheless, many consider 2008 to be the official birth year of the IoT industry, when more electronic devices were connected to the Internet than people.

How does IoT work?

IoT technology is actually connecting a friendto a friend of various devices and devices, usually using a network of sensors and non-computer devices that interact with computers and other devices over the Internet. This could include thermostats, heart rate monitors, sprayers, home security systems, and more. IoT innovations allow you to remotely monitor, control, automate and verify the status of various devices and sensors that can be used in smart homes and self-driving cars.

IoT for personal and home use

IoT technology canused at home and for personal purposes. Typical examples are related to the concept of home automation, where various devices can monitor and control lights, air conditioners, heaters and even security systems. These devices can also connect, for example, to smart watches and smartphones, or to smart hubs that connect various smart home appliances(such as TVs and refrigerators).

Automated homes can also significantlyimprove the quality of life of older people and people with disabilities by providing assistive technology - especially for those with vision, hearing or mobility impairments. This may include the use of sensors to alert family members when a loved one has an abnormal heart rate or has dropped. Another interesting example is “smart” beds that detect whether someone is lying on them. Some hospitals are testing them to keep track of when patients get out of bed.

IoT for commercial and industrial applications

Industrial application example - sensors,monitoring environmental parameters such as temperature, humidity, pressure and air quality. IoT devices can also be used by farmers to track when livestock is running out of water or feed, or by producers to know when stocks of important raw materials are running out. You can even envisage automatic ordering of raw materials when stocks fall below a certain threshold.

Limitations

The Internet of Things brings many interestinginnovation and definitely has great prospects. However, one of the limitations in using IoT systems both in business and at home is the increasing number of devices that need to be monitored.(and many of them may depend on internet connection)... In case of improper implementation, companies andhomeowners may need to use several different apps to track all of these devices. This can make the IoT too time consuming and less attractive to potential customers.

Therefore, companies such as Apple and Lenovo,have created applications that allow you to control devices in the iOS environment, even using voice commands. Other IoT platforms operate with hubs that are independent of internet or WiFi access. Examples are Amazon's Echo and Samsung's SmartThings Hub. In this way, the devices are connected to a sensor, which is often connected either to the Internet or to another WiFi device, allowing central control, programming and monitoring.

IoT cryptocurrencies

Many IoT systems are likely to depend onfinancial microtransactions between digital devices, and for this they must be connected so that the so-called machine-to-machine (M2M) economy is possible - that is, in essence, money exchange between inanimate objects. In such a context, the demand for IoT-compatible currencies is increasing, and cryptocurrencies are definitely a viable option.

Initially, many thought that the blockchain itself would bebasic platform for the M2M economy, as it is suitable for micropayments and is widely used with cryptocurrencies. However, blockchain networks can often process a limited number of transactions per second. Consequently, most proof-of-work (PoW) and proof-of-stake (PoS) blockchain implementations currently have limited scaling potential, making them unsuitable for processing M2M microtransactions at scale. However, it is worth mentioning that many blockchain projects are working on scalability solutions, such as the Lightning network for Bitcoin and Plasma for Ethereum.

The internet of things will one day make it possiblelarge-scale automation, supervision and control of devices, which will definitely improve our daily life and increase the efficiency of various industries. There is a good chance that cryptocurrencies will be part of the IoT revolution, acting as digital money for microtransactions and the M2M economy. So far, the number of cryptocurrency projects focused on the IoT industry is limited, but in the near future there are likely to be many more, as this technology will develop rapidly.

What about blockchain in the IoT?

Blockchain and the Internet of Things (IoT) are literally made for each other. Blockchain is a decentralized technology, and IoT networks are often used to collect data from disparate sources.

Blockchain enables organizations to maintainan immutable and transparent registry of IoT devices, the data they collect and their interactions with each other. Along with its security options and cryptocurrency applications, blockchain offers an ideal platform for machine-to-machine (M2M) transactions.

Since blockchain is a technology,facilitating accurate and secure transactions, it makes sense to integrate it with the IoT to ensure accountability, accuracy and data security. This is why many firms are investing heavily in blockchain-based IoT networks.

Part 9. Blockchain in the gaming industry

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In addition to the applications discussed in previous parts, blockchain technology is also changing the gaming industry.

Game industry today

The vast majority of online games today follow a centralized model. This means that all data is stored on a server that is completely controlled by the game administrators.

Typically, such data includes account information and server history, where all events and in-game assets are recorded.(virtual items and money)accumulated by players.

Since the database is owned by the company, players do not actually own their accounts and virtual assets. Centralized servers also have many limitations and vulnerabilities:

  • Server disruption due to technical problems;
  • Penetration into the system of hackers;
  • Game blocking;
  • Undeserved account ban;
  • Opacity of game mechanisms and parameters;
  • Manipulation of the game economy by developers and administrators.

In other words, all the power is in the hands of the gaming companies. But fortunately, blockchain technology has the ability to eliminate or mitigate most of these problems.

How it works?

As a distributed database, the system is based onblockchain-based can be used to verify and protect all kinds of digital data, including in-game history, virtual items and tokenized assets. The main idea is to transfer power from the gaming companies to the players.

This way each player will be able to fully controlyour account and digital assets, and trade these assets freely. There are many different ways to develop and serve blockchain games.

How can blockchain affect the gaming world?

Let's take a look at a few key examples of how blockchain technology can impact the gaming industry.

Real ownership

As mentioned, blockchain based gamesallow players to directly own and fully control in-game assets. Typically, each asset is represented by a unique, non-fungible token such as ERC721 tokens.

These assets can be game cards, skins, equipment, and characters. But regardless of the type of asset, they can all be tied to blockchain tokens that are served by a distributed network.

Decentralized market

Companies can manipulate the economics of their games and the frequency of spawning of virtual items. They can also block or restrict in-game items so that they cannot be traded.

Blockchain games allow you to createdecentralized markets. This removes the need for trust between players and also provides censorship resistance. All players are free to buy, sell and exchange in-game assets on a peer-to-peer basis.

Optimization of payments

Blockchain and smart contracts can lower fees and speed up financial transactions. They can facilitate all kinds of payments, not only between players, but also between players and developers.

Gaming multiverse

illustrations: BitNews

Thanks to in-game data binding anditems to blockchain tokens, players can exchange assets related to different games. This allows them to reuse their digital assets by experimenting with different games.

Since gaming assets are represented by digital tokens, players can trade them on other gaming markets based on the same blockchain.

Fair conditions

Depending on the implementation, the blockchain allowscreate open, distributed and transparent game servers. In this case, the game mechanism can only be changed if the majority of the network votes for it.

In addition, the distributed nature of the blockchain prevents hackers and cheaters from compromising the game, since there is no single point of failure.

Limitless games

When the game is on a centralized server,developers can abandon or close a project at any time. With blockchain, you can keep playing the game even if the developers stop playing it.

As long as the blockchain network works, the game continues to live. In some cases, new developers may replace the old ones in order to improve the project.

Limitations

While blockchain technology has opened new horizons for the gaming industry, significant challenges remain to be overcome. Here is some of them:

  • Scalability:Blockchains are typically significantly slower than centralized networks, which can hinder the global adoption of such games.
  • Weak acceptance:Although there are hundreds of blockchain games available, the demand for them is still very low. Most games have very few players.
  • Centralization:Not all blockchain-based games are completely decentralized. Some of them use blockchain tokens such as ERC-721, but actually run on a centralized server.
  • Simplicity:With few exceptions, most blockchain games are too simple to attract players who value high-quality graphics or a sophisticated gaming experience.
  • Entry barriers:Raising funds to launch and maintain a blockchain game can be challenging. Poor adoption and scalability issues can limit developers' efforts.
  • Competition:Blockchain games are often developed by small, independent teams. Such teams may find it difficult to compete with the giant gaming companies in the centralized world.

Fortunately, various solutions are being developed. A number of teams are experimenting with Ethereum Plasma, the Lightning network, and other layer-2 approaches to solve the scalability problem.

Examples of blockchain games

Compared to the traditional gaming industryblockchain games are still a new and relatively small niche. However, there are already hundreds of decentralized applications and games based on blockchain networks.

Most decentralized applications and gaming platforms run on top of the Ethereum blockchain(like Enjin and Loom)... But more and more projects are being developed in other networks such as EOS, TRON, ONT, NEO, VeChain and IOST. Here are some examples of blockchain-based games:

  • Decentraland (virtual reality platform);
  • Cryptokitties;
  • Gods Unchained;
  • My Crypto Heroes;
  • Cheeze Wizards;
  • Crypto Space Commander;
  • Mythereum;
  • Axie Infinity;
  • HyperSnakes;
  • EOS Dynasty;
  • EOS Knights;
  • Beyond the Void;
  • CryptoZombies;
  • Relentless;
  • HyperDragons Go;
  • CryptoWars.

Obviously, blockchain technology has a hugepotential in the gaming industry. It offers significant benefits to both players and developers, especially in terms of decentralization, transparency and interoperability.

If the developers manage to overcome the main limitations, the blockchain can change the gaming world for the better and create an entirely new sphere of entertainment, where players will have more freedom.

Part 10. Blockchain and prediction markets

: Shutterstock

Blockchain technology is incredibly flexible, which allows it to be applied not only to cryptocurrencies, but potentially to the markets of any financial assets, whether physical or digital.

In this final part, we will focus on one type of markets that can particularly benefit from blockchain technology:prediction markets.

What are prediction markets?

The prediction market is a speculative market whereparticipants do not trade options or cryptocurrencies, but information. In prediction markets, in particular, investors place bets on the outcome of future events.

Events can be anything(the main thing, of course, is that the broker wants to accept bets on them)... Let's take an example of a simple question: Will there be a train from the US to Europe in 2025?

Here, only two options are possible: yes or no.If you are sure that such a train will not appear in the next 5 years, then you can purchase a certain number of contracts for the answer "no". They can cost anywhere between $ 0 and $ 1.

If the train does not appear within the specified period,no contracts can be traded for $ 1, and yes contracts will cost nothing. Conversely, if there is a train, no contracts will cost nothing, and yes contracts will cost $ 1.

The cost will fluctuate depending onmarket sentiment and new information. For example, in our example, the price of “no” contracts could rise if there is no progress in undersea tunnel technology as the deadline approaches. However, the announcement of plans by a large company to launch such a train in 2024 could cause a jump in the price of contracts for the answer "yes".

This resembles standard speculative markets.Participants buy contracts in the hope that their value will increase over time. Still, prediction markets are far from the average speculative platforms. Used correctly, they can be powerful forecasting tools.

Why are prediction markets useful?

When placing a bet, a market participant may know something that influences his decision. Unlike gambling, external factors influence the likelihood of a particular outcome.

Smart investors conduct their ownresearch, and experts express their opinions. Those with inside information or knowledge of the matter invest in contracts that they believe are most likely to be worth more.In short, prediction markets act as aggregators of information.

In our example with an intercontinental train,if the contracts for a “no” answer cost $ 0.90 and a “yes” contract for $ 0.10, this tells us that relatively few people believe in the success of this idea. The data reflects the collective insight of the marketplace, as those who have information are economically motivated to share it.

Prediction markets are good at collecting and presentinginformation. They operate on the principle that collective wisdom is always better than data known to only a few experts. By studying these markets, stakeholders in various industries - from IT to renewable energy - can better understand the ecosystem's expectations. Moreover, markets collect information to provide an accurate picture of future results.

Proponents even believe that prediction markets could become the underlying technology for a new form of democracy known as futarchy.

Also, contracts do not have to be of typewell no. Any mutually exclusive outcome can be used. A popular example is the presidential election. If, say, Candidate A and Candidate B are competing, then speculators can bet on who they think will win. This topic is now especially relevant against the backdrop of the 2020 presidential elections in the United States.

Prediction Markets and Blockchain Technology

Prediction markets are impressivetools, but their value proposition would be much stronger if they were decentralized. Today's centralized platforms are limited in what they can offer, either due to local regulation or the reluctance of owners to add certain contracts. Users have to trust the operators of such platforms and pay additional fees for the opportunity to use their services.

The traditional centralized model can bereplace with decentralized blockchain-based alternatives. This can bring many benefits, such as censorship resistance, fewer middlemen, and improved accessibility.

Resistant to censorship

Today's prediction markets tend tohave one owner. This means that government agencies or attackers can easily cover them up. Decentralized platforms are not easy to cover.

When managing smart contracts from a single pointthere is no more refusal. The code is executed by every host on the network. If contracts are built in a certain way, no user can change or remove the programs on which the market is held.

Lack of intermediaries

Blockchains do not require administrators.Because work traditionally done by third parties is outsourced to automated code, intermediaries are no longer necessary. Users interact directly using smart contracts, which means they don't pay fees to third parties(as on centralized platforms)... It also reduces counterparty risks as users don't trust anyone.

Openness

In decentralized prediction markets, dousers from all over the world can create bets or create contracts. The geographic and regulatory constraints that plagued legacy platforms may no longer be an issue.

Advantages of blockchain oracles

If there are no brokers and no central office, how do you know what happened after the expiration date?

We need some kind of "mechanism of truth" - and here in the gameblockchain oracles enter. We want to have a data source that tells us exactly whether a particular outcome has happened or not. There are several possible approaches for this.

The simplest is to use somethird party site or news feed, but this actually undermines the meaning of the blockchain. Ultimately, the results will be controlled by a third party who can lie for their own benefit or be targeted by fraudsters.

Another option is to financially motivateusers to report events truthfully. Staking mechanisms can be used, where the user has to bail his tokens in order to report the event. If the message is true, he will receive a reward. However, if he tries to cheat, he will lose his collateral. This is the model used by Augur, the first blockchain platform for prediction markets, to resolve disputes. Others, such as Gnosis, allow users to choose between a centralized or decentralized solution.

Using blockchain oracles in the marketspredictions is a relatively new idea. As this technology is still in its infancy, it remains to be seen which form of oracle is best suited to particular prediction markets. Binance Research published a report on this issue last year. In one of the most popular prediction market implementations, flaws have been discovered, such as the possibility of attacks through deliberate loopholes.

Prediction markets are funtools for betting on future events, as well as for obtaining reliable information about almost anything. By financially motivating people to share their knowledge in the marketplace, insights into social, industrial and political trends can be gained.

The disadvantages of centralized platforms preventprediction markets to reach their full potential. But decentralized alternatives will change that. When more efficient oracles are developed, blockchain technology will be able to provide provably honest code that cannot be changed.

In conclusion

So, representing the technologydistributed ledger, blockchain is able to offer industries, networks and organizations improved security, transparency, accountability and efficiency. This technology improves privacy and removes the need for trust. It also creates an internet of value where users are able to conduct direct transactions without restrictions.

That is why blockchain technology andCryptocurrencies are not only with us for a long time, but also capable of transforming various industries and aspects of life - from finance, agriculture and big data to governance, voting and law.

By the way, once we have already published the seriesarticles on the prospects of blockchain in various industries. We have touched on some of the previously described industries today, but you may also be interested in reading about the prospects of blockchain for the music industry or the field of journalism.

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You can always thank the translator for the work done:BTC:1BHr4jrPPVwdWRpFTekaD34EZ2vo9p8FoCETH:0xf45a9988c71363b717E48645A412D1eDa0342e7E