Blockchain – The Best Technology To Come From The Rise Of Digital Currency

When Bitcoin arrived on the scene, a speculative cryptocurrency that inspired many imitators including governments that launched digital currency mimics, it introduced an interesting technological innovation, the blockchain.

What is a blockchain? For financial transactions, the blockchain is a ledger. For other applications, it is a database. It differs from other ledgers used in accounting technologies in the way it stores transaction records. Instead of a central ledger, transactions stored in encrypted blocks are distributed over many computers. There is no single point of failure for transactions that use a blockchain. It works the same way for database applications replicating file content in many locations.

Decentralizing transactions and data entries makes them more difficult to alter. Each file in a blockchain is called a block. Each block contains one or more transactions. Once a block is created it cannot be validated until it gets distributed over several computers (at least 5). Then the block is closed and becomes unalterable. It cannot be deleted without impacting blocks preceding or following it in the chain, like a chain of evidence used in trials. Each block receives a unique identity using a hash, an encrypted number and a time stamp.

Blockchain first appeared on the scene in 2009 as the method for managing Bitcoin transactions. Bitcoin was the first cryptocurrency. Ethereum, a company with its own cryptocurrency, recognized blockchain technology could serve many other purposes other than recording digital currency transactions. Instead, it could be a distributed ledger or database to hold information securely for almost anything.

The blockchain complements the Internet, the global network that connects us all. Like the blockchain, the Internet is a distributed medium with no central gatekeeper lording over users connected to it. That evolution is about to turn out a third iteration called Web 3.0 or Web 3.

The first World Wide Web (the “www” in website identifiers) is now referred to as Web 1.0. Currently, most of the world uses Web 2.0 which evolved with the introduction of social media and cloud computing. Web 2.0 has coincided with the emergence of technology giants, companies like Meta, Google, Amazon, Microsoft and Apple who provide us with hundreds of thousands of applications. In return, we freely share our personal information for their use which is making them billions of dollars. How, you ask? When you accept cookies, fill in forms and leave your email and mobile phone information, the giants sell it to third parties who use it to contact you to sell stuff.

The arrival of Web 3.0 will and is changing the relationship between and among Internet users. Using blockchain technology and artificial intelligence (AI), users can roam the Internet without surrendering themselves to the whims and chicaneries of technology giants. Web 3.0 and blockchain can protect our intellectual property, and prevent piracy, identity theft and fraud. When we bank or interact with other companies, the blockchain can record transactions, insurance claims, online payments and more, all while ensuring our privacy within the safety of encrypted information exchanges. Web 3.0’s use of the blockchain will alter communications, business transactions and even elections across the globe. We will be spared from hackers, scam artists, and cybercrooks.

Separating blockchain from its Bitcoin origins, you begin to see how useful this technology can be. Unlike Bitcoin, blockchain is not a speculative technology. Bitcoin rises and falls based on the whims of the marketplace. Blockchain is unassailable. Its distributed nature means individual blocks are recorded many times on many systems that are only accessible to those involved in the transactions, contracts, or other information contained within them.

There are two downsides to using blockchains. The time needed to complete a blockchain-based transaction takes longer than traditional computer exchanges conducted one-to-one. With more computers needed to confirm and close a block, more energy is needed per transaction.

The upside of the technology’s promise is much greater. That’s why in 2022 Canada and Alberta joined forces to create a consortium focused on digital decentralized assets and the blockchain to become a global leader in blockchain innovation. The consortium members include companies in finance and technology as well as government. Its activities have included hosting events and conferences, conducting research and development projects, and providing education and training programs for blockchain technology.

On August 1, 2024, Abu Dhabi announced the opening of The Blockchain Center, its initiative to encourage academic research and the development of “a thriving ecosystem to support startups.” The Center’s focus is similar to Canada’s blockchain consortium. It will provide five services and programs:

• An Incubation and Acceleration Hub with resources and providing mentorship for business startups developing new blockchain solutions and applications.
• A Venture Capital arm investing in Web 3.0 startups to speed deployment.
• Education and Research and Development (R&D) to advance blockchain knowledge, skills, and innovation.
• Consulting services for individual projects.
• A hosting site for conferences, workshops, and industry events.

Blockchain has come a long way from being the little brother to Bitcoin. Billions of dollars are expected to fuel its use and growth from USD 17.57 billion in 2023 to 470 billion by 2030 as Web 3.0 becomes ubiquitous.