Tag: Blockchain

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WHAT IS THE FUTURE OF BLOCKCHAIN?

Yogi Nelson

Namaste Yogis. Welcome to the Blockchain & AI Forum, where your questions are answered, mostly correct! Here no question is too mundane. As a bonus, a proverb is also included. Today’s question comes from Ashley in Texas, who wants to know, what is the future of blockchain?

Ashley, you came to the right place. Blockchain technology has enormous potential; however, it must conquer immediate challenges. Let’s begin with five challenges facing blockchain technology today: 1) scalability; 2) initial set-up costs; 3) smooth transition; 4) consensus mechanisms; and 5) privacy and security. I’ll focus on a few solutions, commencing with “sharding”

Sharding is a process for handling large data sets. Sharding accelerates processing by dividing the computational workload and storage space issues. It ensures no single mode (computer) is responsible for processing the network’s transactional load. Sharding increases security through transparent processing on a decentralized network. Sharding is not alone; it has a friend known as sidechains; not to be confused with 2Chainz the rapper! Lol.

Sidechains are separate blockchains attached to the mainchain. Often, sidechains are deployed to test new software before joining the mainchain. Sidechains offer more security when moving digital assets from one blockchain to another and reduce the mainchain’s workload; hence, making the blockchain faster and more reliable. What else is under construction? Answer—state channels.

Despite their Orwellian name, state channels are not spooky. State channels basically “lock” the blockchain while participants agree amongst themselves off-chain. Once participants reach consensus the transaction is uploaded onto the mainchain for processing. Let’s keep rolling with “Roll-Ups”.

Rollups are scaling solutions. Roll-ups move computation off-chain while keeping transaction data on-chain. Keeping the data on-chain allows anyone to locally process all computation in the roll-up and detect fraud. There are two types of roll-ups: Optimistic and ZK. Optimistic roll-ups assume the data/transactions are correct. However, to ensure accuracy, transactions are not final for one week. During the data verification week anyone may submit fraud proof. If no honest individual spots an error, transactions are final. If errors are spotted the transactions can be reversed. What about ZK-Rollups? ZK-Rollups stands for zero knowledge. No, it does not mean the protocol is a know nothing, lol! It means every rollup batch contains a cryptographic hash, thus making transaction more secure. In other words, possession of the private key opens the file and nothing else is required. However, with the increase in security also comes computationally intensive processes. Time, money, and energy consumption.

Charles Hoskinson, Cardano founder, is fond of saying blockchains need their “wi-fi” moment. Said differently, blockchains must achieve interoperability. Imagine having to switch providers every moment to access wi-fi. What a mess! Blockchain interoperability equals users having a seamless integration of capabilities, communication with and between intermediaries, and greater decentralization. Get it done!

Let’s wrap it up with Ricardian contracts. A Ricardian contract is a mechanism to record a document as law and link it to other sectors, i.e., accounting. A Ricardian contract is responsible for executing contracts between two parties and recording the details in forms that are readable by humans and machines. Moreover, the dual abilities of Ricardian contracts equal superior user experiences when compared to smart contracts. Holy dual use!

Today’s “proverb” is curtesy of Yogi Berra to old time baseball star who once said, “it’s tough to make predictions, especially about the future”! lol. Nevertheless, I predict blockchain will evolve and eventually become mainstream technology with widespread applications. Thanks to the Emurgo Academy for providing the source material of today’s post. The art work is by Gerardo Cloquell and on display in Dorado, PR.

Until next time,

Yogi Nelson

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WHAT IS A DECENTRALIZED APPLICATION (D-APP)?

Yogi Nelson

Namaste Yogis.   Welcome to the Blockchain & AI Forum, where your blockchain and artificial intelligence technology questions are answered, mostly correct!   Here no question is too mundane.  As a bonus, a proverb is also included.  Roger from New Hampshire wants to know what is a decentralized application (D-App)?

Roger, you came to the right place. Let’s start by first defining app.  App is an abbreviation for application.  If you say application, you risk being un-cool and might be place in computer lexicon detention!  Ha, ha.  An app is computer software. Apps can be downloaded on to your computer or phone.    The app communicates with the hardware and software on your computer/phone to provide the specific function, think YouTube.  Apps are distributed by a central authority across numerous computers, by Apple for instance.  Now, D-Apps.

D-Apps are also software but differ from apps in important aspects.  For example, D-Apps are executed on decentralized peer-to-peer networks; as noted above, apps are centralized. 

D-Apps are governed by smart contracts, whereas, apps are governed by the distributing authority, such as Apple.  D-apps make use of smart contracts and the rules contained in smart contracts allow D-Apps to run autonomously, that is not the case with apps.  Wait there’s more! 

D-Apps are open-source software; apps are closed-source.  Linux is an open-source software example.  Open-source software is available to everyone for use, modification, and distribution; closed-source apps require permission.  D-Apps store their data on a public blockchain for all to examine anytime from anywhere.  Excellent. Of course, smart contracts connect D-Apps to the blockchain.  Finally, D-Apps use cryptographic tokens and apps don’t. 

I assume your next question is, what are the benefits of D-Apps? I’ll give you three benefits.  First, D-Apps are fault tolerant.  By fault tolerant, I mean D-Apps as a system are more resilient and can operate, if one or more components fail.  I like it.  Second, because D-Apps are decentralized they are censorship resistant.  There is no Big Brother! D-Apps are open source and on a public blockchain, hence they generate confidence because as President Reagan often said, “trust but verify!”  

Is there a “test” to determine if a D-App is truly decentralized?  The short answer is yes!  To assess decentralization, ask these five questions: 1) are all users treated in a fair and equal manner; 2) is the source code open; 3) is the D-App built on top of a decentralized blockchain; 4) key decisions are made by the community; and 5) developers are not exclusively in control of the code.   

Let me wrap it up by offering three D-App use cases.  First, is the management and transfer of money.  Roger, have you transferred money from USA to another country?  I have.  If you have you understand the expense and complication.  Ugly. The fees and hassle are unreal but with a D-App the transfer costs pennies, is painless, and free of intermediaries.  D-Apps can also streamline business processes leading to greater efficiencies.  Last, via their smart contract, D-Apps can power a decentralized autonomous organization. (DAO) DAO is an organization without hierarchical structure.  DAOs are administered, in part, with the assistance of smart contracts. I’ll cover DAOs and smart contracts in greater detail in future editions.

Roger, it’s time to boogie, but not before mentioning that in Yemen there is a proverb that says, “If you give people nuts, you’ll get shells thrown at you.”  Hopefully, the few nuts of information I shared today won’t be thrown back at me!

Until next time,

Yogi Nelson