This is to bring to your notice the genuine possibility of a ‘hard fork’ in the Bitcoin industry — which is accounted as a foreseen divide happening among the communities supporting two different version of the consensus rules to communicate with the bitcoin network. [ “Bitcoin Core (BTC)” & “Bitcoin Unlimited (BTU)” ]
A successful ‘hard fork’ could result in two separate token representations for the resultant consensus chains. In the midst of these heated debates, Unocoin would like to express support for the original “Bitcoin Core (BTC)” version and is in the process of building a strong contingency plan for operations in case of a ‘hard fork’.
While user preferences vary between the two versions, there are a quite few technical questions to be answered at our end to deal with the possibility of handling both the tokens. However, Unocoin is technically equipped to handle the situation and assure we deal with this decision smoothly.
In the interest of customer security, we advise to hold your bitcoin private keys for yourself either in ‘paper wallets’ or ‘software or hardware tools’ that are capable of storing them safely (eg. Mycelium, Bitcoin Core, Electrum etc.)
Although there seems to be an increased chance of a ‘hard fork’ this time comparatively, we believe it to be very unlikely to happen and is not an issue to be panic about.
Blockchain has the potential to profoundly transform some of the basic operation of businesses, governance and open technology projects.
From a technological standpoint, blockchain is a network oriented software implementation. It shifts the risk and responsibility of code execution and data storage from centralised machines to decentralised networks.
Three major components of blockchain technology that enabled decentralised networks are:
Trustless Consensus of participating nodes
Maintaining a shared truth
Decentralised execution of programs
(Fundamental problem of distributed computing is to achieve system reliability and integrity in the presence of faulty players)
Blockchain provides a solution for a decentralised network consensus using cryptographic hash functions. It has developed different flavours of consensus algorithms suitable for different set of problems with varied control level, latency, security and transparency:
Proof-of-Work, reliability on intense processing power preferred majorly for highly secure networks.
Proof-of-Stake, reliability on loyal stakeholders of the network which helps to avoid energy wastage.
Designated Signatories, considered for performant networks with strict access controls.
Permissioned, suitable for enterprise solutions and standardisation of sectoral accounting.
Permissionless, robust public projects aiding in interaction and transaction models.
(Truth is the foundational element of a business)
Blockchain has introduced an innovative mechanism to preserve the provenance of digitally shared truth with a system of chronologically chained blocks holding transactional information which always refers to the previous block.
Major three innovative implementations that bring a secured shared truth to life are:
Transaction based ledgers — makes it easy to validate the ledger data with a single point of source (agreed genesis block) and provides an additional ability to cross-verify the mutation records of the token ownership.
Block level incentives — enables modular, open & competitive participation to keep the system secure and running.
Immutability and block confirmations — back referencing the previous blocks keeps adding security layers with each block confirmed by the network and makes it practically impossible to reverse engineer or alter the metadata inside these blocks.
With the combination of these technologies, the blockchain achieves a secure, transparent, immutable, repository of truth, designed to be highly resistant to outages, manipulation, and unnecessary complexity.
Some of the possible applications of shared truth:
Intellectual Property rights
Birth and Marriage records
(Decentralisation orchestration of code execution is the key to efficiency and performance of an application)
Apart from ledger keeping, blockchain also introduced a new way to orchestrate open and decentralised execution of computer programs. Key technology behind this could be:
Scripting Capabilities — standardised assembly code language with mutual agreement of nodes on the scope of logics which help to design complex acceptable transactions.
Smart Contracts — autonomous software code that can help in building large scale business logics running with independence.
Autonomicity and Oracles — Independence in software execution enables complete autonomicity in data and decision making. Further with the help of oracle networks (autonomous hardware collecting data points on incentive model) we are about to witness a completely autonomous industrial scale systems.
Barter system was provably inefficient in terms of portability, divisibility and mainly accountability. Money has its roots as an abstract form of accounting (Subjective Ledger Technology) used to facilitate a closed community trade goods and services inside their system.
Growing population and impractical methods to maintain subjective ledgers beyond a community lead to objective ledgers underpinning value to physical objects such as sea shells.
With time, we have seen emergence of standardised attributions of money especially to rare metals (universal ledgers) which comply physical limitations around the globe and made it easy for accountability, portability and divisibility.
However, with massive industrialisation driving humongous amounts of trade and commerce worldwide gave birth to a more powerful technology of fiat currency which is more portable, divisible and fungible aiding the problem of accounting. Further, 21st Century has seen the dawn of digital money as an abstract representation of physical fiat currency for online transactions.
Problems of Money (Need for Bitcoin)
Decoupled abstraction of fiat currency with the introduction of cash reserve ratios brought new financial troubles of fraud (counterfeiting, digital hacking) and unpredictability to the economy giving rise to inflationary economics.
Apart from these, some notable flaws in the current underlying economic frameworks are:
Delayed transaction settlements
Totalitarian accounting and Unpredictable money supply
Higher cost per transaction
Transaction reversibility and the origin of fraud
Double spending and digital security vulnerabilities
Fragmented currency networks
Bitcoin has been the definitive answer to these problems by building an alternate currency system which is more evolved and robust adopting a decentralised model with no central vulnerabilities to trust upon.
Solution Behind (Blockchain Technology)
While Bitcoin is the end solution, blockchain technology powering Bitcoin is the fascinating invention that made it possible with a combination of technical tools such as
P2P networking – for an efficient and open system
Proof-of-Work algorithm – to make the system more robust and secure with open competition
Cryptographical ownership – financial inclusion and impractical to break privacy
Transaction based ledger (UTXOs) – introducing immutability and solving double spending problem
Scripting capability – helping nodes to validate pseudonymous transactions and build complex transactions
Merkle Root mechanism – utilise the power of blockchain without hosting a full node (complete blockchain)
Beyond Money (Evolution of DApps Frameworks)
Blockchain has caught a serious attention lately by industry leaders impressed with the power to facilitate autonomous trade and smart contracts between two unknown parties without trust.
Continuous iteration and development of blockchain is very evident with four major evolutionary steps it took:
Iteration One (On Bitcoin blockchain)
Borrowing the advantages of immutability and data redundancy backed with network security, we have seen adoption of Bitcoin blockchain for storing critical data points of an application/ use case such as tracking real world assets.
Iteration Two (Forking Bitcoin blockchain)
While Bitcoin blockchain offers limited scope for building only complex financial transactions, a different iteration/fork of this blockchain has shown the possibility of building a completely turing complete scripting possibility on top of blockchain making it possible to write completely open decentralised server code for the first time.
Iteration Three (Codebase to bootstrap blockchains)
There have been multiple instances and specific requirements from enterprise communities for a more specialised advantage of blockchain with added privacy and accessibility management leading to a multiple open source code repositories which can help you kickstart your own public/private blockchains suitable for your applications.
Iteration Four (Blockchain as a Service model)
More rapid adoption and emergence of blockchain as a critical technology for open and secure systems for applications shared between multiple parties arises a definite learning curve for adoption. We are already seeing popular cloud services already embracing this technology stack labelled as ‘BaaS’ (Blockchain as a Service) offering a plug and play model for developing more personalised blockchains.
While Bitcoin is the first practically famous application of blockchain technology, we are yet to unleash a world with the core communication and accounting infrastructure built on blockchain.
As a natural evolution of the technology for money, we are seeing the emergence of new breed of currencies backed by cryptography taking the place of fundamental units of economics. Bitcoin has been the pioneer of cryptocurrencies set to replace gold to be the new ‘Gold Standard’ of currency system.
Bitcoin has its own advantages differentiating it from all the present payment networks and monetary instruments. Talking about one such property, Bitcoin unlike gold is infinitely divisible with up to eight decimal places currently in use.
While breaking down the units to such a miniscule level may sound idiotic, unmanageable and hard to comprehend at a first glance, it is an important trait that enables the future of a extremely deflationary economics.
Matter starts to exhibit new behaviour at Nanoscale. Similarly, radically different businesses models spring up when you open up sub-micro payments with the flexibility to innovate without permission.
What difference will the divisibility of bitcoin bring? Let us explore:
Diversity of scale
Bitcoin network allows a wide spectrum of transaction sizes ranging from sub-micro payment streams (in satoshis) to super-macro monetary settlements (in millions of bitcoins). While there exists infinite variety of transactional use cases, the image below helps to familiarise with some of the examples to understand the scale of payments on bitcoin network.
With such an extended flexibility, it opens up the possibility of indulging in granular payments which could happen at a very high frequency with motivating new variety of transactions such as ‘performance-oriented-payments’, ‘pay-for-what-you-use’, ‘supply-chain-reimbursements’, ‘creative-royalties’ etc amongst others.
Easy Division (Precision)
Infinite divisibility enables us to make payments with infinite precision. Each individual participant of a production channel can be directly included in the payment transaction holding precise amounts unlike bulk settlements delaying payments and abused distributed margins.
Apparently, 2016 has been a very bright year for the #bitcoin ecosystem as the price started marketing the ideology more than the community.
The global economic environment has further fueled the topic giving a good stance on opening up the public mindset to the core financial policies that central banking has been built upon.
Meanwhile there have been multiple cybersecurity breaches floating in the news showcasing the compromising security architectures leading to privacy failures often. Adding to the vulnerabilities of the present systems, these corporate profiles have been churning big money out of data monetisation reducing the value of the content and identities around the world.
On the other hand, we are able to observe a much robust and secure financial implementation of #bitcoin blockchain dealing with all these issues in a more sophisticated fashion.
While this is the case, we can portray an important underlying trend evolving among the corporate systems defining the future industries.
There has been an evolving trend visible in the businesses models clearly giving hope for a more robust and scalable systems for the future.
We can see the famous example of evolution in taxi services emerging out of enterprise models to open information sharing techo-corporate models (Uber/Ola) and now to a more decentralised autonomous solutions such as Arcade City. Imagine the next wave of self driving autonomous ride sharing vehicles.
To put E-commerce in this perspective, we have seen the DNA shift from a more centralised commerce hub (Amazon) to much decentral and distributed commerce (Ebay) and now entering into a much powerful open market systems such as OpenBazaar. How would an autonomous drone delivery system would look like?
Similar is the case of other industries.
What made this transition faster and much practically achievable now is the contribution of the missing piece of the framework (a trust machine – believed to be ‘blockchain’). Now that we have got the weapon to dissolve the corporate authority to code, we will witness see a much faster growth in this direction which could be easily adopted globally.
Growing industry for machine computing such as robotics, cognitive computing and sensor devices are pushing the adoption and dependency of humans on technology and project a much greater requirement for robust trustless frameworks and machine inclusion.
Blockchain technology has been able to provide answers to this growing requirement and been showcasing some promising solutions with the powerful smart contract mechanisms recently.
Interesting live example showcasing how technological solutions can eradicate bureaucratic systems is Tala (previously known as ‘Mkopo Rahisi’) the brainchild of Shivani Siroya, is a Kenyan mobile credit facilitating application providing a micro-finance opportunities and visibility to the aspiring micro-entrepreneurs with the system built on top of big data and behavioural psychology driving credit eligibility decisions and further credit issuance at an unfathomable speeds rather than traditional credit rating system on top of financial accounting procedures and identity regulations taking humongous time with limited coverage.
To give some taste of how the upcoming financial systems are going to look like, we already have some brilliant startups working in this spectrum.
While 2016 was the year the blockchain technology achieved general acceptance, we hope 2017 will be the year of “Trust Leap” as suggested by Rachel Botsman in her TED-Talk bringing more practical applications of the technology.