Blockchains are amazingly popular nowadays. But what is a blockchain? How do they work, what problems do they solve and how can they be used?
As what the name indicates, a blockchain is a chain of blocks that contains information. This process was originally described in 1991 by a group of researchers and its original purpose was to timestamp digital documents so that’s it’s not possible to backdate or tamper with them which is almost like a notary.
However, it went by mostly unused until it was adapted by Satoshi Nakamoto in 2009 to create the digital cryptocurrency called Bitcoin. A blockchain is a distributed ledger that is completely open to anyone. They have an interesting property: once some data has been recorded inside a blockchain, it becomes very difficult to change it.
So how does that work? Well, let’s a closer look at a block.
Each block contains some data, the hash of the block and the hash of the previous block. The data that is stored inside a block depends on the type of blockchain. The Bitcoin blockchain, for example, stores the details about a transaction in here, such as the sender, receiver and amount of coins.
A block also has a hash. You can compare a hash to a fingerprint. It identifies a block and all of its contents and it’s always unique, just as a fingerprint. Once a block is created, it’s hash is being calculated. Changing something inside a block will cause the hash to hash to change. So in other words: hashes are very useful when you detect changes to blocks. If the fingerprint of a block changes, it no longer is the same block.
The third element inside of each block is the hash of the previous block. This effectively creates a chain of blocks and it’s this technique that makes a blockchain so secure.
So how do we apply them?
Let’s say A wants to send money to B, each of them holds a private key and a public key.
A adds money to a digital wallet (Say Bitcoin)and allows the money to be sent using an encrypted digital signature.
The requested transaction is broadcasted peer to peer network using a Public Key.
Computers in the connected network verify and validate the transaction.
The transaction is complete, and money is moved to B.
The new block is added to the existing blockchain.
There are several applications where you can use blockchain, whether it’d be as a medium for payment, healthcare, online gaming, exchanges you name it, the categories for blockchain applications seems endless.
Digital Purchasing: How safe are you?
As we all know, purchasing online is the most convenient way to have that particular service, item in front of our doorstep. In this digital age, we are hooked with online gaming purchasing digital items for a game and somehow incorporate it like we are buying the physical item itself. Surprisingly, most of the millennials can relate to this since everything is being done digitally. But how much can we extend in terms of incorporating blockchain into digital purchases?
Previously, we tackled how blockchain works as well as the unique identifier as to how secure it is. In 2018, an estimated 1.8 billion people worldwide purchase goods online, and how I wished none of those 1.8 billion people haven’t been scammed or phished for their deliverables. Sad to say, Online shopping fraud attacks rose 30% in 2018, sadly because of lack of security from the platform itself and integrity coming from the sellers.
As a consumer/buyer we are always left to double-check our transactions and research that particular seller for legitimacy, I mean if not us who will?
But purchasing online should be convenient and hassle-free for everyone?
That’s why for me a blockchain platform can be a solution for such cases, and integrating it with everyday activities such as shopping, payments (Which is being applied today!) etc is something that would benefit both the seller and the consumer.
Digital Collectibles + Blockchain
There are several companies who started this collaboration, one good example I could give you would be ECOMI which is a premium license digital collectible marketplace. To simplify we all know that buying collectibles has been done in the past, you can either purchase it online and pray that your goods will safely arrive in your doorstep, or meet up with the seller itself. This has been the usual process, but then comes digital purchasing which is much more appealing for most of us.
In the age where E-Sports and MMORPG/MOBA/RPG is growing massively, purchasing digital items which signify that experience or as a sign of admiration for that particular character, product, event etc. are normal if you’re a die-hard fan.
It’s worth noting that there are other projects targeting digital collectibles on the blockchain. Two of the better known ones are CryptoKitties and CryptoKaiju.
CryptoKitties: CryptoKitties is well-known for being so popular that it caused a multi-day Ethereum network congestion. The Kitty collectibles became in such a high demand that those who wanted to invest in these collectibles were willing to pay tens of thousands of dollars.
CryptoKitties unarguable prove that NFTs have a real demand, even if limited to the blockchain market.
CryptoKaiju: CryptoKaiju has kicked off its own niche NFT market by delivering vinyl collectibles on the Ethereum network. There isn’t a wide variety of options but each vinyl collectible comes in a limited amount. The sales haven’t been spectacular since CryptoKitties is a more recognizable brand in the blockchain market.
Blockchain Cuties: This is a rising brand in the blockchain collectible space because of the aggressive marketing undertaken by the company. However, Blockchain Cuties faces the issue of Ethereum Network’s limitation and a small target market as only a small portion of the world is able to deal with Ethereum wallets, transactions, and tokens. The project does deliver desirable collectibles and that’s why despite being a new market entrant, it has become a strong competitor to CryptoKitties.
How ECOMI Stands Out
CryptoKaiju, CryptoKitties, Blockchain Cuties, Chibi Fighters, Crypto Birds, etc. are all examples of collectibles on the blockchain. However, all of these lack a few important aspects to reach the mass-market.
- The Ethereum network gets easily clogged.
- Collectibles have typically revolved around major media/entertainment brands; niche collectibles have rarely acquired market share.
- The larger portion of the world is not familiar with blockchain basics like wallets and transactions.
- Having to own Ether to buy or trade collectibles adds a speculative risk.
ECOMI has manages to avoid the above problems.
- The game exists on GoChain, which has a far higher throughput than Ethereum and can therefore handle a much higher user traffic.
- The key advantage the game has is that it is partnered with major global IP brands and aims to give people the most bought physical collectible brands as NFTs.
- It’ll be much easier to capture mass-market interest by offering people the characters they already know and love; to ensure they have a reason to switch from physical to digital, ECOMI offers the ability to use NFT characters in augmented reality games.
- Users are able to buy collectibles with fiat. This fiat is turned to GO-721 tokens in the back-end so anyone can access ECOMI Collect irrespective of their knowledge of wallets and blockchain transactions.
- The ability to buy and sell collectibles on the ECOMI Collect app with just fiat makes the platform a lot more user-friendly as the speculative nature of tokens is removed.
In a sense, ECOMI is a protocol for major brands that want to issue collectibles on the blockchain. The project leverages the network of Alfred Kahn (the man behind brands like Pokémon and Yu-Gi-Oh!) and novel technological solutions to make blockchain powered platform for collectibles.
If this project takes off, it’d be a major win for the blockchain community as global brands would be using a live public blockchain (GoChain) to power their new product line. This would show that public chains are able to work with enterprises even if the likes of IBM creating private chains and taking advantage of their branding and network to muscle out blockchain startups.
Slowly but surely blockchain is being incorporated in different projects nowadays. This is a good sign that companies are exploring alternative ways to execute their services and products much better.
I think educating people about blockchain is one way to deliver adoption. The more informed they are, they are more likely to understand, participate, and apply in almost everything which I think will be beneficial in the long run.
However, if blockchain can be used just in the back-end and product UIs are able to deliver easy functionality by limiting people’s interactions to mere taps on a screen, as is the case is most mass market apps, then educating people about blockchain technology is not even needed.