Author Archive Tolu Ajiboye

In this blog post, we will share with you why blockchain will fail. Please read the blog post till the end.

For over a decade now, blockchain technology has been used in a large number of ways and up till today, more and more ways for the use of blockchain are being researched. Many sectors – especially health and energy all over the world – have benefited considerably well from this technology.

Also, if you’re a supporter of the Internet of Things (IoT) era, you can probably sit down and in the next few minutes, come up with different ways blockchain technology can be used in the advancement of the IoT. But with all this, one hard question on many minds and which we all must answer is “Why hasn’t blockchain been properly adopted all over the world?”

The current biggest use for blockchain technology is cryptocurrency. The different digital assets are built based on this framework even though some of them have their own custom chains e.g. Bitcoin, Ethereum and much more recently, Binance.

If the benefits of blockchain tech are this great, then what really is the problem? Why Blockchain Will Fail? Are ten years too long or too small? A few obstacles that must be overcome before global adoption is sure are listed below.

Difficulty in Understanding

The truth about blockchain technology, whether directly linked to cryptocurrency or not, is that there are still a lot of people who find it really difficult to understand how it really works. There cannot be proper global adoption if many people still view this knowledge as obscure and are unwilling to really digest it.

Even if we do move away from those who are downright stubborn and reluctant to learn, we have to take account of a large number of people who actually do want to learn but find all the details so tedious that they quickly lose interest. Is there a simple way to explain blockchain technology? Can we simplify it so well that people can understand and would be willing to give it a shot?

Absence of Regulation

A lot of blockchain proponents are very excited about the technology because of the absence of regulation. No one controls the blockchain and no one person has heavy authority over anything that happens using this technology. This is a fantastic feature but also a problematic one, simultaneously.

Cryptocurrency, for example, is great because it cannot exactly be impacted by the world’s governments and financial regulatory bodies. This means that money is largely unencumbered and no one can stop you from receiving some crypto in your wallet. On the hand, however, the lack of regulation scares many people who think that crypto is very risky and might not be worth a try.

Everyone currently knows that the markets are largely unpredictable and extremely volatile, so how exactly do we convince people to invest in something so unstable and fickle while reminding them that it’s completely deregulated?

Exploitation from Crooks

One very important feature of blockchain technology is its anonymity. Another one, deliberately separated from the first here, is its irrevocability. Even though transactions are public, there really is no way to tell who initiated what transaction and who was on the receiving end. What this means is that illegal activity being carried out on the blockchain is untraceable.

After getting over the fact that transactions can’t be traced, people still have to worry about the fact that they also can’t be reversed. This means that even if there was a way the anonymity could be unmasked, there is absolutely no way to revoke the transactions. Crypto is already the go-to currency in the deep-web exactly because of these features.

Speed

Transactions on the blockchain are generally purported to be considerably faster than regular payments. While this is right in some cases, there are other recorded cases where transactions are not completed until after several hours. The truth about this point is that there are some cases where something affects even traditional payments and people have to wait a while. However, the traditional payments are a more trusted method so even if there’s downtime, there isn’t a lot of worry.

For blockchain, if a transaction takes too much time, there may be some panic among the parties involved, especially if they’re new to the tech, because they know funds can easily be lost if there is a problem. How then do you convince people to use this technology when they know it can take time and they could lose their assets?

Transaction Complexity

The major way to send and receive crypto funds is to use an address. However, this is scary to most people because these addresses are too long and are made up of many different randomly placed letters and digits. First of all, most people can’t memorise their address.

Secondly, if you mistakenly put a wrong character somewhere, or you use a Bitcoin address to receive Ethereum, your funds are completely gone and irrecoverable. It really does seem like a little too much stress for the average person if they are being convinced to make the switch to blockchain technology.

What’s the Way Forward?

Expecting the world to be okay with blockchain technology and considerably adopt it any time soon, might be a bit of a pipe dream. There are still countries where the government is trying to make sure they do everything they can – which might not be much anyway – to stop people from using crypto and blockchain.

The benefits of blockchain technology could be pretty astounding but apart from patience added to the continued drive for mass adoption, is there another way to ensure blockchain technology goes global if all these problems aren’t solved?

About The Author

Tolu is a cryptocurrency and blockchain enthusiast. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover. Contact: Tolu.Ajiboye [at] zycrypto.com

Even though cryptocurrencies are still catching on slowly, they have been around for quite a long time. For more than a decade, these digital currencies have been used for various kinds of financial transactions and are still being used.

There are different types of cryptocurrencies in the blockchain market, all with different values, made by very different firms and run on different frameworks. Typically, they all run on blockchain technology but the two largest assets in the market which are Bitcoin and Ether, run on their own different chains.

However, it’s important to note that just like cryptocurrency is just one use of blockchain technology, Ethereum is more than just a cryptocurrency.

What is Ethereum?

Ethereum is a major distributed and public blockchain network. The Ethereum blockchain allows decentralized applications (dApps) to be built on it and primarily focuses on running code for these apps. The token used within the Ethereum network is known as Ether and its creation process is a bit different from that of Bitcoin.

The Ethereum blockchain is also different because it gives developers the freewill to do pretty much anything they want because even though most blockchains are considerably limited, the Ethereum chain isn’t. This means that developers can go above and beyond, building a gazillion and one apps as they see fit.

A Short History

Publicly, the Ethereum journey began in November of 2013 when Russian–Canadian writer and programmer, Vitalik Buterin, first published the Ethereum whitepaper. About two months after that, the official development of the network was announced and the initial team included Vitalik Buterin, Charles Hoskinson, Anthony Di Iorio and Mihai Alisie. This began a process of development and also an ICO which ended in August 2014 and successfully raised $18.4 million.

Before Ethereum was developed, there were significant limitations to the usage of blockchain applications. A good example is the Bitcoin blockchain that was initially developed for Bitcoin to strictly be a peer-to-peer cryptocurrency. This was a huge problem for most developers at the time because there was a lot more that they wanted to do. The two options available, starting with the most tedious and less time-effective one was to find a way to develop and expand the Bitcoin network so it could accommodate a lot more. The other option was to create a whole new blockchain that will be a lot less limited than its predecessors. This option was quickly picked up by Vitalik Buterin and the development for Ethereum began.

According to Buterin:

“I thought [they] weren’t approaching the problem in the right way. I thought they were going after individual applications; they were trying to kind of explicitly support each [use case] in a sort of Swiss Army knife protocol.”

The Ethereum Virtual Machine

This is a software built on the Ethereum network and which solved a lot of problems. Basically, EVM allows any developer to easily create any run any program they want, without having to worry about the programming language used. The EVM also simplified the process of creating applications and made it even more effective and efficient. So, there was no longer any need for a new blockchain to be built as this solution allowed as many development projects as possible, be built on the same network.

Mining on Ethereum

The process of producing Ether is a bit different from how Bitcoin is mined on the Bitcoin blockchain. On the Ethereum blockchain, miners do work to earn Ether instead of exactly mining for it. Ether, serves on its own, as a kind of fuel for the Ethereum network. Ether is also generally what is used by developers who create applications on the network a payment for charges and services.

Apart from Ether, there is another type of token that is used on the Ethereum network. This token is called Gas and it is used as payment for miners. When an Ether transaction is initiated, a gas fee is set along with it which is basically a fee paid to the miners so that they can include that particular transaction on that block, for the blockchain. The higher the gas set for an Ether transaction the faster the transaction is executed and then completed.

Uses of Ethereum

One major use of Ethereum is its ability to easily build decentralized applications. Shortened as dApps, these apps all serve different purposes but their decentralized nature means that they are not exactly controlled by any one individual, institution or entity. The decentralised nature of these apps help increase the amount of trust it garners because people know that because they are on the network and are public, they are not easily manipulated.

Another use is the creation of a Decentralized Autonomous Organization (DAO). These organizations are basically run by a programming code and built on the Ethereum network. Also their decentralized nature means there isn’t any one leader and so no one is in control. DAOs have tokens and these organisations are jointly owned by anyone who purchases these tokens.

Important Things to Note

• Ethereum is more than just digital currency.
• The Ethereum network allows developers create thousands of decentralized applications (dApps) on its platform.
• Ethereum was created by Vitalin Buterik
• The digital currency available on Ethereum is the Ether.
• GAS is payment for miners who include transactions in a block for the blockchain.
• Ethereum can also be used to create Decentralized Autonomous Organisations.

Over the years, many people have noticed that the idea of money, as we know it today, has quite a few inherent flaws. There are too many limitations to it and too many different governmental bodies all over the world controlling its creation, value, and also regulating its usage and movement.

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The average person has to jump through hoops of a million different shapes and sizes to successfully send funds across international borders. This is because of all the regulations that govern financial transactions either individually in a country, or internationally as a region.

There has always been a great need to solve this problem to ease cross-border payments, whether they are for business of personal. One major solution to this is cryptocurrency.

What is Bitcoin?

Bitcoin is the first decentralized cryptocurrency ever developed. It is a form of electronic cash or digital money that is completely deregulated without any sole administrator or central bank.

Bitcoin can be sent directly from one user to another completely without any interference or required middlemen.

It was created sometime in 2009 by a person or a group of persons known as Satoshi Nakamoto. Even though the asset is about a decade old, the identity or identities of Satoshi is still unknown.

A few people have come out with claims that they are the real Satoshi but most of their claims have been debunked.

What is a Blockchain?

Bitcoin (and all other cryptocurrencies) currently require a public, distributed ledger to function. This ledger is called a blockchain and records of all confirmed transactions can be found on a blockchain.

Basically, every kind of Bitcoin transaction ever carried out is powered by the Bitcoin blockchain and is recorded, unalterable and irreversible.

This presents a level of security that was hitherto unavailable with traditional transactions. The blockchain is a tightly run technology created with very strong cryptography.

Bitcoin Wallet

A Bitcoin wallet is simply a digital, virtual wallet that holds your bitcoin. All other cryptocurrencies also have wallets and these wallets are created specifically to hold the crypto.

A Bitcoin wallet always has an address and this address is what is used to send or receive Bitcoin.

A Bitcoin address is usually a long set of characters including numbers and letters and just as no two people can have the same traditional account number with a bank, no two Bitcoin wallets can have the exact same address.

Why Do You Need Bitcoin?

One of the most fantastic reasons for the use of Bitcoin or any other crypto is the level of autonomy it offers. The biggest problem with regular and traditional legal tender is how much trust is required for the system to run properly.

This leaves it open, expensive and most of all, very prone to exploitation. Bitcoin easily solves this problem because not only can all transactions be verified, it’s impossible to make counterfeits on the blockchain due to its decentralization.

Other Advantages of Bitcoin include:

• No Geographical Restrictions – Bitcoin can be used by anybody in any part of the world. Literally, anyone can have access to the blockchain.
• Irrevocability – All transactions done via Bitcoin cannot be reversed. This means that the system cannot easily be manipulated. It also means, apart from the sense of security it gives to its participants, that proper caution is required before a transaction is initiated and completed.
• Speed – Unlike traditional transactions, payments carried out via the Bitcoin network are completed in a matter of seconds. Because there are no intermediaries and no regulatory bodies, there really is nothing standing as a bottleneck and causing any kind of delay.
• Perpetual Availability – Since it is not being controlled by any single person, authority or entity, there cannot be a general downtime throughout the entire blockchain. This means that Bitcoin is available 24 hours a day, 7 days a week, and 365 days a year.

Private Keys

As stated earlier, every Bitcoin transaction gets recorded in the blockchain. Because of the security requirements for the blockchain, every Bitcoin wallet must have a secret signature called a private key.

This private key is used to sign each transaction as a way of showing precise proof that the transaction was actually originated from the wallet’s real owner.

Mining

Mining is a complex decentralized computational process that basically fulfils two needs.

• Firstly, miners have to solve extremely difficult and complex mathematical problems on the Bitcoin network to produce Bitcoin. The Bitcoin produced when transactions are combined in a block and recorded on the blockchain is called a block reward.
• Secondly, solving these problems authenticates each transaction thereby making the entire network a lot more trustworthy.

The process of mining, unlike before, can now only be done with very specific and powerful computers and there are millions of miners all over the world who are constantly doing this at any given point in time.

It’s very important to note here that only 21 million Bitcoins will ever be mined. The only solution for this is to change the protocol of the Bitcoin blockchain.

This protocol was done to control how much Bitcoin is produced to keep it valuable but it is now thought that when that peak is reached, a lot of problems, especially with scaling, may now rear its head.

Important Things to Note

• Bitcoin is a digital currency.
• It is decentralized and so no one has complete authority over the network.
• All transactions are recorded publicly and verifiable.
• A Bitcoin wallet holds Bitcoin and is accessed through Bitcoin Wallet Addresses.
• Private Keys ensure security on the Bitcoin Network
• The network is available at any given time.

Until something about the Bitcoin protocol is hanged, mining of new coins will stop after 21 million Bitcoins have been mined.

If You Want To Read More About Blockchain, You Should Read These Post Too:

• Bitcoin Ideology: What Exactly is Bitcoin and How Does It Work?
• Ethereum Ideology: What Exactly is Ethereum and How Does It Work?
• All About Cryptocurrency
• 5 Myths About ICO Whitepaper: Busted
• Hybrids, Debts and Equity Funds: Know The Real Difference
• How Is The Price Of A Cryptocurrency Determined