What Is Blockchain?
There is no doubt that blockchain is a truly genius innovation – created by an individual or a bunch of people collectively referred to by the nickname of Satoshi Nakamoto. However, since then, at some point, it grew to become part of a bigger story, and the primary concern that everybody faces is this: What is Blockchain?
A blockchain is a decentralized data structure in the form of a series of continuously scalable data blocks that record transactions in chronological, traceable and unchanging order. Imagine the data blocks of a blockchain as links in a chain that interlock in an immutable sequence. Such interlocking is achieved by cryptographic procedures, which ensure that new blocks of data can be added without replacing or changing older blocks. A chain of blocks thus becomes longer and longer over time. It is not possible to change information that has already been stored.
A central application area of blockchain technology is the documentation of transactions. The following example can illustrate this:
Paul has bought a new hat and wants to sell his old hat on an Internet classifieds site. Hugo, who is looking for a hat for a hike, finds Paul’s ad on the Internet. They both agree on a price of 10 dollars. However, Paul and Hugo have a problem with the “cap for money” transaction: Paul does not want to send the hat to Hugo until he receives the money. Hugo, however, is too uncertain about making any advance payment. What if Paul doesn’t deliver in the end? We need an intermediary.
To solve the problem, Paul and Hugo could contact a payment provider. The latter handles the transaction transparently and securely for both parties, documents the process, and charges a fee for it. Such a procedure is the standard procedure today. Blockchain technology offers an alternative to the so-called “trusted third party.” Transactions in blockchain networks are not verified by third parties but by a jointly managed, forgery-proof accounting system, the Distributed Ledger.
Bitcoin and Ethereum blockchain applications, which are already available, enable transactions such as those between Paul and Hugo. Paul and Hugo need only join the community to take advantage of this. Usually, they have to download the client software and install it locally on a computer. Paul and Hugo’s computers become nodes in a blockchain network.
Riot Blockchain is a company that focuses entirely on blockchain and bitcoin-based companies. They are also the first NASDAQ-listed Company that has been active in the cryptocurrency sphere and has been involved to these depths.
The Riot Blockchain company has a diverse backstory. To really understand their current position, we need to understand where they are coming from and what they want to accomplish.
The Company was first named Venaxis Inc. At the time, they were dealing with veterinary products. They also focused on developing tests to detect diseases. During that tenure, it bought BiOptix diagnostics. In 2016, they also changed its name to Bioptix Inc. At the time, many investors were not happy with the acquisition and were also concerned about burning cash without any real growth.
To mitigate that, the Company changed its name to Riot Blockchain Inc. in 2017. This change was also accompanied by a change in the focus of what the Company was going to do. They completely changed their business model to the blockchain. According to the initial plan, they wanted to invest heavily in cryptocurrencies and blockchain businesses.
A cryptocurrency mining company called Argo Blockchain PLC has become the first cryptocurrency exchange for joining the London Stock Exchange (LSE). According to a report, it has raised $32 million for a total valuation of about $61 million.
London-based Argo supports four digital currencies. They are Bitcoin Gold (BTG), Ethereum (ETH), Ethereum Classic (ETC), and Zcash (ZEC). Argo’s services are available on computers and smartphones via a monthly subscription. The Company’s cryptocurrency mining platforms offer immediate access to cryptocurrencies and also allow their deposit. Moreover, these mined funds are sent directly to users’ digital wallets.
The LSE’s initial listing document claims that Argo Blockchain has placed 156 million shares, bringing the Company’s valuation to £47 million (about $61.2 million). Argo provides mining services located in Quebec. Canada has become a destination of choice for cryptocurrency-related businesses due to the optimal climate and energy supply provided. In addition, Argo is expected to expand its operations to Iceland and China in the near future.
HIVE Blockchain Technologies Ltd is a Canadian blockchain company focused on mining and selling digital currencies. The Company has green powered data centers in Canada, Sweden, and Iceland that produces minted digital currencies. The Company’s digital currencies are Ethereum, Ethereum Classic, and Bitcoin.
The Company also provides shareholders with digital currency mining margins as well as a cryptocurrency portfolio. The Company also has a data center campus in New Brunswick. The Company’s geographic segments include Canada, Sweden, Iceland, and Bermuda. The Company provides its services from the blockchain sector to the traditional capital markets.
Blockchain technology is based on the concept of the distributed ledger. The technical basis is a computer network based on the peer-to-peer principle. The consensus-building and validation solutions are based on cryptographic methods, and game theory approaches.
A Distributed Ledger is a decentralized public ledger. The contents of the ledger (usually a sequence of alterable data that occupies account movements, for example) are created jointly in a computer network. A copy of the data set is available on each node of the network.
Peer-to-Peer (P2P) networks
A peer-to-peer network is a network structure in which all connected computer nodes have equal rights and can basically perform the same functions. This is the difference between the peer-to-peer principle and the client-server model, in which a central server performs administrative tasks for several clients. While an authority usually manages the server in a client-server architecture (e.g., a service provider), peer-to-peer networks do not require central administration.
Hashing and anonymization
Transaction data is stored in blockchain networks in the form of blocks of data encrypted with hash values. Each block contains data on several transactions, which are stored anonymously. Therefore, each participant in the blockchain network can see which transactions have been carried out but not by whom.
Consensus procedure and validation
Equivalent computers jointly manage blockchains in peer-to-peer networks without a central supervisory authority. This requires a consensus procedure that regulates the circumstances under which new data blocks are created, which participant can extend the blockchain, and when an extension is considered legal. Proof of work and proof of stake is among the most common consensus methods of this kind.
Continuous trading, speed of execution, fluidity of processes… These new financial securities registered on the blockchain have great potential. At first glance, they don’t have much in common. And yet, they could end up not leaving each other. Stocks and cryptocurrencies have a joint future that is beginning to take shape. That future can be summed up in two words: tokenized stock. A new term to add to your cryptocurrency glossary.
The content (the stock) remains unchanged. When a stock is issued and traded on the blockchain, it means that the shareholder register is digitized (which is not often the case in companies). Most importantly, smart contracts (autonomous programs that automatically execute actions previously validated by the stakeholders) enable regulating and automating the stock management costs (distribution process, collection process…). Other advantages of tokenized stocks: include faster transaction execution, access to a larger investor base, and the ability to trade stocks 24/7 since the crypto market has no opening and closing hours.
The rapid development of blockchain and cryptocurrencies has led to the emergence of a new concept: play-to-earn. As the name suggests, this concept allows gamers to earn money (in cryptocurrency) while playing their favorite games.
Walid Midani, CEO of the video game studio DigitalMania, mentioned the example of the game Axie infinity, which was a big success in the Philippines. The Philippines has seen a large number of gamers migrate to crypto-based video games as a way to earn an income during the confines of Covid-19. For example, grandparents, single mothers, and cab drivers all turned to the video game to supplement their income – playing, making, and digital trading assets that they could then sell on blockchain platforms, later transferring them into cash.
Thanks to blockchain and tokenization, it is now possible to buy land, yachts, or clothes… in the metaverse, the entrepreneur noted. Before adding, “Certainly, this was possible even before the advent of the metaverse, but the data was stored in centralized databases.” He continued: “But with blockchain, this data is now stored in a distributed, public and secure way.”
Obviously, the notion of play-to-earn is a dream come true for millions of gamers worldwide. But for game developers, the potential is even greater. “Thanks to this new paradigm, game studios will be able to develop new ideas both creatively and functionally,” the DigitalMania CEO pointed out.