Is Blockchain – The Distributed Ledger Technology Web 3.0?

Blockchain – The Distributed Ledger Technology Touted as the foundation of Web 3.0 Explained

Blockchain is an extremely secure, immutable, and almost incorruptible robust distributed ledger that records virtually any type of transaction of value. Believe it or not, blockchain started life back in the early nineties but gained full maturity when it was employed as the core underlying component of the digital currency bitcoin in an effort to solve the problem of digital currency “double-spend” without the need for a “trusted” intermediary (e.g. a bank). 

It is important to note that this distributed ledger can exist in two forms, public (or permissionless) and private (or permissioned). 

Bitcoin uses a Public Blockchain, as such all transactions can be viewed by anyone conducting transactions. Of note, however, while you can see all transactions you are not privy to who (e.g. the name of the person or entity) is doing the transaction. This is where the security and anonymity embedded in blockchain technology comes into play.

Private Blockchains have the same securities as Public Blockchains with additional access controls that determine who can access the private blockchain network. Access is normally controlled by the owner of that network.

Blockchain technology has so many uses far beyond just cryptocurrency. Its capabilities extend to Insurance, Healthcare, Intellectual property, and Digital Rights, Identity Management, Cybersecurity, Titles and Registration, Remittances, Wagers and Betting, Voting, and eCommerce. 

Because of its intrinsic design perhaps one of blockchains biggest benefits is its inherent transparency and ability to mitigate corruption while promoting inclusiveness. It is these attributes that make blockchain such an appealing technology outside of the financial markets. Blockchain creates TRUST and VALUE by being a trustless technology while at the same time removing components of no value.

Pros and Cons of Blockchain

Blockchain has some clear advantages and disadvantages.

Pros: Efficiency, Immutability, Transparency, Corruption Mitigation, Lower transactions time and costs.

Cons: Still has scalability and power consumption issues, Immutability has some drawbacks, Rare instances where security can be compromised, and Speculative market creation.

The positive thing about blockchain is that so many entities have recognized its potential it enjoys a lot of support from reputable entities in the technology space and the financial services space as well.

In the final article of this series next week we will interrogate what cryptocurrencies are.

This is the 2nd in the article series. You can read the first article Of Crypto Coins and Blockchains in Caribbean Business.

Trevor Forrest is CEO, 876 Solutions, and a Certified Blockchain Architect with over 29 years of experience in the IT Industry in Jamaica and overseas.
trevorforrest@876solutions.com

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