AUTHOR
Melonie Swan is a philosopher and economist at the New School for Social Research in New York. Research interests - finance and entrepreneurship. Employee of two universities (Singularity University and University of the Commons).
Meloni earned her MBA in Finance from the University of Pennsylvania. She has worked for Fidelity and JP Morgan companies.
Melonie Swan is an active promoter of the opportunities that scientific discoveries and revolutionary technologies open up to humanity. She is the author of 2 books and a large number of articles in scientific and popular media.
Introduction
Who is Satoshi Nakamoto is unknown. But we know exactly what he did. In 2009, Satoshi published the concept of a new digital currency, bitcoin. He described it in the brochure Bitcoin. Peer-to-peer electronic money system ". Satoshi also made a publicly available Bitcoin exchange app. Melonie Swan is convinced that the time has come for a new, fifth, computer paradigm.
Here are the previous four concepts. In the beginning there were computers (electronic computers). They were replaced by personal computers. Then came the Internet, social networks and mobile applications. Computer paradigms change about once every 10 years. The breakthrough concept of this decade is blockchain, and bitcoin is its first practical application.
Blockchain is a technology for exchanging value in encrypted form through peer-to-peer networks. The most large-scale implementation of the blockchain has become the digital currency bitcoin. It is the most widely used cryptocurrency in the world.
One of the main achievements of the technology is that no trust in a partner is required for a Bitcoin transaction. It is enough for users to trust the technology. Another significant technology difference is decentralization. You don't need a central server to exchange bitcoins.
The importance of the fifth paradigm is that a functional for the exchange of assets has been created. With the help of blockchain, users can exchange both tangible and intangible assets. The technology can be used to record, store and monitor any asset. The blockchain can be compared to a huge spreadsheet that records all assets, accounts, and transactions.
According to US research firm Gartner, known for technology forecasts, 26 million devices will be connected by 2020. For effective interaction between them, a digital unit of value is required. For example, two cars must determine the order of access to a high-speed lane. One driver is in a hurry, while the other can drive more calmly. The second driver, missing the first, will receive compensation. Linked vehicles will automatically trade with each other. You can create a currency for such trading on the blockchain.
The scale of the impact that blockchain will have on humanity is comparable to that of the Internet. Blockchain will enter our lives faster than the World Wide Web. However, a number of circumstances limit technology penetration. One of them is that cryptocurrency is technically difficult for ordinary users.
Blockchain is a breakthrough technology. It will affect all aspects of a person's life. The revolution will take place in three stages. Blockchain 1.0 will create new cryptocurrencies and payment systems. Blockchain 2.0 will change the assets of the financial market (stocks, bonds, loans, mortgages, ownership, smart contracts). Blockchain 3.0 will lead to the emergence of decentralized applications that will impact areas of life such as government, health, science, education, economics, arts, culture and others. Let's learn more about each stage of the blockchain.
- Cryptocurrency
The word "bitcoin" is ambiguous. First, it means the platform on which the cryptocurrency exchange system operates. It is built on blockchain technology. The system can be thought of as a huge table in which all transactions between participants are recorded. The table is updated with new entries, checked and stored by all network participants. Cryptocurrency exchange takes place in a peer-to-peer network. None of the participants have control over this table - the system is decentralized.
A peer-to-peer network is based on the equality of network participants. It lacks dedicated servers. Each node (peer) acts as a client and server.
Secondly, the term "bitcoin" is also used when talking about a data exchange protocol. It describes the procedure for transferring assets on the network. In other words, it is software.
Third, Bitcoin (abbreviated as BTC) is the first and most popular cryptocurrency in the world. Other Top 5 cryptocurrencies include Ethereum, Ripple, Litecoin and Steem. According to coinmarketcap.com, there are over 650 registered cryptocurrencies in total. Each, like bitcoin, includes three levels: platform, protocol (application), and the currency itself. Some currencies use the same platform as Bitcoin. Others are built on their own platform. For example, the Litecoin cryptocurrency operates on its own Litecoin blockchain platform.
1.1. Byzantine generals problem
Imagine a Byzantine army laid siege to an enemy city. The generals will have to agree on the assault on the fortress. They can only exchange messages. However, someone decided to go over to the side of the enemy. The traitors will try to thwart the offensive. The task is to develop an algorithm that will allow the generals to agree on an offensive and win the battle.
The Byzantine Generals Problem is a popular model for building computer systems. Defective parts of the computer send information to the system. It can be contradictory. The system must be able to process it and make the right decision.
In the case of digital currency, the Byzantine generals problem translates into a double-spending problem. How can I verify that a specific digital currency package has been used up? The only way is for a third party to keep track of the transactions. It took cryptographers 40 years to solve the double-spending problem without resorting to a third party. As a result, a new form of digital money has emerged - cryptocurrency.
1.2. Blockchain
Blockchain is a technology built on peer-to-peer networks. Network participants exchange resources that are of a certain value. Examples of resources include money, hard disk space, computer processing power, stocks, ownership, and any other assets. Each resource exchange is committed as a transaction. All records made on the network are saved, and they are kept by all members of the network. Any new request to exchange resources is checked against the previous records.
The blockchain can be thought of as a public ledger that stores all the transactions performed on the system. Transactions are grouped into blocks that are lined up one after another in chronological order. "Blockchain" is translated from English as "block chain of transactions."
The network is constantly growing. New blocks are added every 10 minutes. Transactions are checked by the client program. The computer on which such a program is installed contains a copy of all blocks.
The technology has combined peer-to-peer file exchange with public keys from cryptography. There are internet sites like blockchain.info where you can view any transaction. To do this, just enter the public key. It is a text string of letters and numbers, 27-32 characters long. The public key is like an email address. It specifies the recipient of the money transfer.
1.3. How to manage your Bitcoin coins
Bitcoin is digital money. With their help, you can buy and sell goods and services online. In addition to buyers and sellers, there are other participants in the process. These are software developers, miners, exchangers and companies that provide services for processing calls to the system, including web wallets.
Miner - a person who provides a computer for creating new cryptocurrency coins. The only way to get a new cryptocurrency is by solving math problems. It is required to select a single block signature from millions of combinations. The miner resembles the one who distributes files on a closed torrent tracker.
The user needs an address to which others will transfer bitcoins, a private key to send cryptocurrency to others, and a "wallet" - an application for managing bitcoins. Thus, there is no need to register an account with a third party server.
Wallets were the first applications built to work with the blockchain protocol. They can be installed on a computer, mobile device, or opened in an Internet browser. A voluntary commission is charged for the transfer. The transaction occurs conditionally immediately. However, there is a 10 minute delay to validate the blockchain of transactions and confirm them. In reality, this delay may be longer.
For daily small payments, they use millibitcoins (a thousandth of a bitcoin) and Satoshi (a millionth of a bitcoin).
1.4. Self-managed service
To check and record transactions in the public ledger, miners provide their computing power. They are needed to generate correct block signatures. This is a complex process that requires going through a huge variety of numbers. It's called mining. It records all conducted transactions and serves as a source of new bitcoins. Miners receive bitcoins as a reward.
Decentralization of the system requires more responsibility from users than in the case of traditional payment systems. If the private key is lost, bitcoins are lost forever. There is no customer support service to go to to recover the private key. Everyone is responsible for the safety of the private key. This is holding back the development of blockchain technology. However, startups such as Circle Internet Financial and Xapo have emerged that are trying to overcome this limitation. Obviously, a new level of computer literacy is required from users.
Cryptocurrency has many advantages. One of them is associated with the use of push technology. The latter means that the user is sending relevant information to the network. It is more secure than credit card payments. In the latter case, personal data is downloaded from the network during authorization (pool technology). Here, user information is stored on the server and is vulnerable to hacker attacks.
1.5. Sellers accept bitcoins
Like any other currency, bitcoins can be exchanged for fiat money, products and services. As of October 2014, over 30,000 merchants accepted BTC payments. Examples of applications for accepting payments in bitcoins: BitPay, Coinbase and Coinify. The commission in this case is less than when using a credit card - 1% instead of 3%. In the case of a small number of transactions per day, there may be no commission.
The need to use a separate solution for accepting payments in cryptocurrency limits sellers. Therefore, the challenge is to integrate bitcoin payments into traditional payment solutions. This will allow small businesses (cafes, restaurants, consumer services) to also accept payments in bitcoins. It is also required to expand the functionality of mobile applications used for quick payment at points of sale.
1.6. How much is bitcoin worth?
The historical maximum bitcoins were shown on November 29, 2013. Then the coin was given $ 1242. Strong demand was fueled by the banking crisis in Cyprus, as well as the Chinese government's ban on the use of bitcoins by financial institutions, retailers and payment systems.
During 2015, the exchange rate hovered around $ 250 per bitcoin. Since the end of 2015, it has been slowly growing. According to coinmarketcap.com, in mid-2016, the market capitalization of this cryptocurrency was $ 10.2 billion, which is comparable to the GDP of a small state. The value is calculated as the product of the current price ($ 649.52 per bitcoin) by the number of coins in circulation (15,773,160 BTC).
The number of bitcoins issued is growing at a predetermined rate. This distinguishes cryptocurrency from fiat money, which the government prints at its own discretion. The maximum number of bitcoins will be 21 million coins. This is expected to happen in 2040.
70% of all bitcoin conversions take place in RMB. Chinese exchangers do not take commission, so it is difficult to assess the economic effect in this case. People change cryptocurrency to yuan and back for free. The high volatility of the bitcoin price is a barrier to cryptocurrency penetration into the general public.
- More than a money transaction.
A possible path for the development of blockchain technology is as follows: cryptocurrency exchange, all types of financial transactions, smart property objects (real estate, cars), registers of government documents and, finally, smart contracts, thanks to which all of the above will become possible.
2.1. Smart contracts
A smart contract (smart contract) is an agreement between the parties implemented on the blockchain. In the traditional sense, a contract is an agreement between two or more parties to do or not do something in exchange for something.
Each party to the contract must trust the other party, hoping that she will fulfill the obligations of the agreement. A smart contract is the same as a regular contract, except that there is no need for trust between the parties. The terms of the smart contract are executed automatically by computer code without any exceptions.
The main differences between smart contracts are: autonomy, self-sufficiency and decentralization. A classic example of a smart contract is a vending machine. A bet between two people about what the weather will be like tomorrow is another good example of a smart contract.
With the help of smart contracts, you can conclude not only purchase and sale transactions for money, but also solve a number of general issues. In this case, the need to trust the other party also disappears. Here are examples of situations in which smart contracts can be used:
• donation of property due to any event (reaching the age of majority, marriage, etc.);
• bets, rates;
• payment of awards for crowdfunding ("crowd funding").
2.2. Blockchain ecosystem
Blockchain technology itself needs an ecosystem. The latter includes solutions for data storage, communications and settlements. Examples of such projects are Storj (file storage), IPFS (file service, link management, storage), Maidsafe and Ethereum (storage, communication, file management).
A blockchain archiving system is also required. For example, someone bequeathed property in 2014 using blockchain. How to verify the existence of a will after 60 years? You will need tools to archive blocks that are no longer in use.
2.3. Ethereum
Ethereum is a platform and programming language for building and hosting distributed applications. It meets the requirements of a complete Turing machine - it supports any tokens, scripts and currencies. This is an open source project. The platform has a deep vision of the future development of blockchain technology.
2.4. Decentralized Applications (Dapp)
Over time, smart contracts will become more complex and autonomous. The future of blockchain technology is represented by the following application concepts:
• decentralized applications (Dapp);
• Decentralized Autonomous Organizations (DAOs);
• decentralized autonomous corporations (DAC);
• Decentralized Autonomous Communities (DAS).
There is no generally accepted definition and understanding of a decentralized application yet. The Ethereum project defines smart contracts and Dapps as a protocol that enforces the terms of a contract using encrypted blockchains of transactions. Other projects may interpret the Dapp concept differently.
However, in general, there is an understanding that Dapp must meet the following requirements: the code is publicly available, executed automatically, no one controls most of the tokens, all records are encrypted and placed in the form of chains of transaction blocks.
Decentralized autonomous organizations and corporations are Dapps that have more complex functionality. Autonomous agents, united in a decentralized network, will perform various tasks. To illustrate, imagine a real corporation that operates without people, strictly following a set of business rules. These rules are formalized in the form of a constitution, which also includes financing mechanisms for the organization, for example, the sale of company shares through crowdfunding.
An example of a practical implementation of the DAO / DAC concept is the Storj platform. It is a decentralized alternative to Dropbox and Google file storage. The files are encrypted, divided into small pieces, and stored on computers that are connected in a decentralized network around the world. Users can rent out free hard disk space in exchange for Storjcoin X (SJCX), a cryptocurrency similar to Bitcoin. Since there is no central server, Storj offers a safer and cheaper way to store files in the cloud.
The DAO and DAC concepts are derived from artificial intelligence (AI), the science of creating intelligent machines.
2.5. Forward to artificial intelligence
Blockchain is a potential path to artificial intelligence. Existing rule-based systems can be implemented on the blockchain. This will increase their degree of automation, the power of operations. In addition, AI models such as Stephen Wolfram's cellular automaton, John Conway's Life Game, and others can also be implemented using blockchain.
One of the long-standing problems of AI is proving the existence of a digital mind in real life. Perhaps it can be solved with smart contracts. They allow you to create the necessary evidence base. In the future, where billions of digital minds will live, there will be a need for Oracles, information arbiters that will function on blockchain technology.
- Beyond currency, economy and markets.
3.1. Solving problems in science
How to use blockchain technology to solve scientific problems? The main direction is peer-to-peer networks with the possibility of distributed computing.
SETI @ home (search for extraterrestrial civilizations) helps analyze radio signals from space. Folding @ home aims to calculate the conformation of proteins. The results are valuable in the development of new drugs. In both projects, volunteers provide the computing power of their computers and are rewarded in the form of a special cryptocurrency.
Note that in these projects, participants cannot choose a research topic, for example, a specific protein, for which various variants of its structure will be calculated. For a person to be able to determine the topic of research, a resource allocation mechanism is needed. Once it is implemented, anyone (even not connected with a scientific institution) will be able to solve their problem using the supercomputing capabilities of the network. And the first project providing such an opportunity - Zennet - has already been announced.
The authors of Zennet invite those who wish to share their computers. When you sleep, you are not using a computer. So why not leave it on and let others compute on it? In return, you will receive a pre-agreed fee. In turn, people who need large-scale computing, for example, data analysts, scientists, get access to computing power, the cost of which is much lower compared to renting traditional cloud computing.
Another area of scientific application of blockchain is to use mining more efficiently. This process is energy intensive, with most of the electricity being wasted. It turns out that searching a huge array of numbers can be combined with solving scientific problems.
Members of the Primecoin project are contributing to the search for sequences of primes known as Cunningham chains of the first and second orders. The distribution of such chains has not yet been fully investigated. The Gridcoin project inspires miners to provide computer resources for solving scientific problems in mathematics, physics, biology, medicine, and earth science. However, this scientific use of blockchain is limited. The mining algorithm creates chains of codes that can only be verified in one direction. The structure of traditional scientific computing is different.
3.2. DNA sequencing of all mankind
In most European countries and the United States, citizens do not have access to their genetic data. Knowledge of a genetic predisposition to a disease affects lifestyle. To reduce the risk of illness, a person engages in physical exercise, takes vitamins, and refuses bad habits. Services built on blockchain could provide individual access to DNA sequencing results. The data is encrypted, access is done using a private key.
Genecoin is developing a service for storing genetic data on the blockchain. The service includes sampling for DNA analysis, sequencing, storage of the obtained data on the bitcoin network.
The DNA.bits startup encodes patient DNA records into blockchains of transactions. Researchers access them using a private key.
The data obtained from DNA analysis presents a real challenge for humanity. Potentially, we are interested not only in 7 billion of the world's population, but also in plants, animals, viruses, bacteria and other organisms. This will require large-scale models for storing and accessing data. Effective solutions will be transnational and cloud-based. They will be the first high-order models, truly big data.
Blockchain technology allows you to automatically embed an element of the economy into the system. As a result, the cost of research becomes more adequate. Tokens expand access to data, a mechanism for sponsoring research appears.
3.3. The era of health and longevity
Healthcare applications are being developed. The idea is to create a structure for storing health data on the blockchain. They can be analyzed to ensure their safety. Built-in economics will compensate for data management and use.
Many people are open to sharing personal health data with researchers. To organize such a process, you can use blockchain. The integration of big data streams containing health information with machine learning methods will be useful for the development of preventive medicine measures.
Technology accumulates data on the health of a huge community of people. The economic dimension of blockchain will accelerate research. Doctors will bargain for the provision of medical services. Health Coins will make pricing transparent and versatile.
Electronic health records can be stored and managed through the blockchain. Individuals provide access to doctors, pharmacists, insurance companies to records through private keys. The universal format will allow the use of one medical record in different institutions.
In the event of an epidemic such as Ebola, financial assistance will be forthcoming. Both individuals and organizations can donate funds to help victims.
Seans's Outpost is the most famous charity project in the world, powered by donations in bitcoins. Volunteers feed homeless people in the Escambia area of Florida.
In developing countries, the mobile financial platform M-Pesa is actively used. It allows you to transfer money using SMS messages. For countries with low smartphone penetration, this is the only available mobile payment method. Bitcoins are integrated into M-Pesa wallets. People who previously could not open bank accounts now have the opportunity to save money.
3.4. Educational contracts
One of the many directions for using blockchain is literacy smart contracts. Technology makes online education courses available to citizens of developing countries. Students receive financial aid directly from sponsors around the world. The funds raised cover the tuition fees.
The existing mechanism allows tracking the student's progress. According to the terms of the smart contract, the completion of the next level of training is recorded automatically after passing the test.
Funds for school education can be raised in Learncoin - the currency for literacy smart contracts. Students publish training contracts in a dedicated training contract exchange system. This system brings together organizations that raise funds for training and students who want to get an education. By publishing the study contract, the student declares his / her intention to get an education. The sponsor chooses the contract and pays for it. The system automatically controls the fulfillment of obligations by the parties.
This model can become universal in education. According to this scheme, state retraining of specialists, training of company employees, students and graduate students can take place.
- Peace as an opportunity
Blockchain has sparked a large number of new ideas and rethinking of existing concepts. It turned out that concepts that have remained unchanged for years, or even centuries, require revision. Such concepts include money, currency, private property, government, sovereignty, and intellectual property.
The blockchain forces us to redefine reality more generally. People began to look at the world as an opportunity. For example, Bitcoin is an instance of decentralization as a digital currency. However, there are other instances of decentralization, such as smart private property, delegated government services, and community-based credit bureaus. Tools are required to realize new opportunities.
4.1. A new way of organizing activities
Blockchain is a new paradigm for organizing activities, more efficient, requiring less effort. It offers a versatile and global scale not previously available. Technology accelerates all ways of communication between people. All models of human activity can probably be coordinated through blockchain. More freedom, equality, rights and opportunities are characteristic of the new approach.
Blockchain has brought a new understanding of things - any system in life is to some extent an economy. It is a resource allocation system. Such systems include mechanisms for the exchange of currency or tokens, force, energy or concentration, as in biological systems. The main economic structures are universal.
Blockchain is a reality supercomputer. Any phenomenon that can be defined as discrete units can be transmitted through the blockchain. Venture capitalist David Johnston believes that everything that can be decentralized will be decentralized.
4.2. Each has its own currency
The traditional definition of a currency as “the country's monetary system” is outdated. “A quality or condition used or accepted by most people” is more appropriate. There is nothing behind bitcoins. They are not tied to any physical commodity. There is nothing behind fiat money either. They are backed exclusively by trust in the state. The high degree of diffusion adopted by the majority is what the currency provides.
The word "currency" generally means "a unit of value that can be earned and used in certain economic systems." For example, Counterparty Currency (XCP) provides the ability to create new assets - application coins. The LTBCoin currency, issued by the Let's Talk Bitcoin media project, allows transactions in the form of sponsorships, donations, and tips.
Now everyone can have their own currency. It's like blogging, opening a Twitter account, Instagram. Tatiana Moroz, songwriter and performer, has released Tatianacoin, the artist's first cryptocurrency. Perhaps in the future there will be an explosion of cryptocurrencies, there will be millions of them.
4.3. Mixed government
The value of the state is another issue for reconsideration in the context of blockchain. In today's big data world, governments are unable to fulfill their registry responsibilities. Blockchain can potentially solve this problem. Technology will help governments do their jobs better. However, some of the traditional functions of government will become redundant.
Hybrid governments may emerge in the future. Blockchain-based registries and smart contracts automate repetitive procedures, leaving officials to promote the value of services.
- The main barriers to technology
Blockchain is at an early stage of development. There are internal and external barriers to the further penetration of technology into society: technical restrictions, hacks and scandals, public perception, government regulation and adoption of the technology by the masses.
5.1. Technical limitations
The maximum number of bitcoin transactions is 7 per second. The main challenge is to increase this indicator. For comparison, the VISA payment system at the time of peak load can process 10,000 transactions per second. Each block of transactions is processed every 10 minutes. Large transfers can take up to 1 hour.
There is also a size problem. The blockchain is 40 GB. It takes 1 day to download it. The more users, the larger the blockchain size. As a solution, they suggest placing the blockchain on one server or compressing it. In the first case, the concept is lost - the technology becomes centralized. The second is not yet possible. Blockchain cannot be compressed in the traditional way due to security reasons. Perhaps in the future, a special blockchain compression algorithm will be developed.
There are also concerns about attack 51. There is a possibility that one miner could take control of the blockchain and re-transact previously transferred coins into his account. There are also vulnerabilities in the cryptographic standards used in bitcoins.
Mining makes the system trustworthy, but consumes a huge amount of energy, which is wasted. By some estimates, mining costs up to $ 15 million per day.
5.2. good and evil
The reputation of bitcoin in the eyes of the public is influenced by the facts of illegal activity, namely money laundering, drug trafficking. Which is also a barrier to cryptocurrency adoption. Technology itself is neutral. However, like any technology, it can be used for good and bad.
Repeated theft of cryptocurrency, scandals, and fraud also hinder the development of technology. In 2014, the largest cryptocurrency exchange, Tokyo's MtGox, went bankrupt. The company fell victim to hackers. Using a vulnerability in the system (transaction plasticity), attackers bypassed the double-spend ban. Bitcoins were transferred to the scammers' accounts again, but MtGox qualified the situation as a transaction failure.
In 2014, the disappearance of the CEO exchange Moolah along with $ 1.4 million was reported. In the same year, as a result of attacks by cybercriminals, $ 2 million of Vericoin (VCR), $ 620,000 of Dogecoin (DOGE) were lost.
The industry is expected to regulate itself, as it does in the film industry, video games, comics. Decentralized voting, control and monitoring systems should complement the blockchain ecosystem.
5.3. Government regulation
Whether the blockchain will become a full-fledged financial service and industry depends on government regulation. Some countries have completely banned bitcoin (Bangladesh, Bolivia, Ecuador, Iceland and others). The UK has classified bitcoin as a currency, which means bitcoin is not subject to VAT. In Australia, bitcoin is also considered a currency, but it is subject to VAT and goods and services tax.
For the IRS, bitcoin is private property. Therefore, Bitcoin users must pay income taxes. However, other government agencies in the country regulate bitcoin as a currency.
If bitcoin is a currency, then it is subject to legal restrictions aimed, for example, on combating money laundering. Formally, a person who sold bitcoins for cash will fall under this type of violation. The US Secret Service periodically traps cryptocurrency traders for cash. However, in such cases, the court will rather side with the defendant, motivating the acquittal by the fact that, according to the law, bitcoins are not money. Obviously, laws do not keep pace with technology.
Many countries have come to the conclusion that the cryptocurrency does not fit into the existing regulatory system - the laws need to be adjusted. Existing taxation methods have proven almost useless for collecting taxes from entities using cryptocurrency. This affects the GDP. Traditional control points (consumption tracking) may be a thing of the past. Checkpoints should be transparent to taxation. An income-based taxation system could potentially be replaced by a consumption-based taxation system.
Conclusion
Blockchain is a new, revolutionary, computer paradigm. It is a decentralized network where the trust in the participants is based on the protocol level. None of the networks previously had built-in economic relationships between participants. The technology has combined computing, communication networks, cryptography, and artificial intelligence.
Bitcoin is the first and most massive cryptocurrency in the world. Fiat money and cryptocurrency will exist on equal terms. There will be a huge number of cryptocurrencies issued by individuals and communities. Blockchain can become the "Internet of Money". It will link finance in the same way that the Internet of Things links machines.
Bitcoin accounts for up to 90% of the cryptocurrency market capitalization. New projects that are being created within the framework of the Blockchain 3.0 concept prefer bitcoin.
Blockchain integrates and automates human / machine and machine / machine interactions. Technology will create payment networks for the Internet of Things. It will become a link in the world of automatic machines. Blockchain will pave the way for artificial intelligence.
Blockchain is applicable to a wide variety of different tasks. The technology is already being applied in science and other aspects of human life. Blockchain will change healthcare and medicine. The era of data will shift the paradigm from treating identified diseases to preventing disease. This will lead to healthier people, longer life expectancy.
Sequencing data from 7 billion people will require large-scale models. Blockchain will create solutions for storing and accessing such data.
The key function of blockchain is the ability to carry out any transaction between two participants using the Internet. This allows members to trade resources in a decentralized and distributed manner and globally.
The blockchain economy has already established itself in a serious way. However, there is a possibility that it could fail due to a number of problems with predictable consequences. Thus, the industry needs better protection in order to protect itself from unscrupulous market participants. Another major issue is data encryption vulnerability, namely, there are several scenarios in which a private key can be stolen or disclosed.
There are no decentralized models outside the internet. Decentralization is one of the key functions of blockchain technology. However, there are forces within the blockchain industry leading to centralization and decentralization.
In particular, mining is subject to pressure that can result in the centralization of the process. Large associations of miners have been created. They are aiming for a threshold of 51% of the total computing power of the network when control over the creation of new crypto keys can be gained. Anyone looking for a quick way to get rich with 51% of the network's total block signature generation can bypass the double-spend ban. The mining community monitors attacks and takes appropriate action. However, the structural problem that could lead to the collapse of the cryptocurrency remains.
The multidirectional forces, namely the drive towards centralization and decentralization, are expected to bring the system into balance. The world of the future will consist of both types of models.
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