Blockchain Technology

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Source: http://michelfalcon.com/

How many of you have hear of disruptive technology? Can you provide examples of disruptive technology? A disruptive technologyis something new that disrupts an industry, and quite often completely changes the way we all do things. Can you think of any now?

Here are a several examples: Cars they disrupted the horse & carriage industries, Computers - and all the things that have come along with them have wreaked havoc in any number of industries, We all should know this one as we hear about it whenever the Postal Service is discussed, eMail, IM, text messaging, social media. These communication methods have disrupted the postal industry, phone conversations, letter writing, regular communication, and relationships alone. (LOL) Netflix, eReaders (They pretty much killed the book industry), smartphones, mobile payments, self checkout in grocery stores, the cloud, And most of all the internet

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New Kid on the (Block)chainIndustry Disruption in 1..2..3..Renita M. Rhodes

A disruptive technology displaces established technology, shakes up the industry, or creates a completely new industry.- Clayton M. Christensen, "The Innovator's Dilemma"

Today, I am here to discuss another disruptive technology Blockchain technology. This technology is normally associated with cryptocurrenices such as Bitcoins. I know I first read about this technology, I thought oh this is nothing more than bitcoins. We arent going to use bitcoins. They are only used on the dark and the deep dark web, favored currency among extortionists, drug dealers, and underworld types. Moreover, it only tends to be discussed in the mainstream on shows like Scandal, CSI: Cyber, and the House of Cards. Little did I know, this technology can be used for pretty much everything.

Because of the shady perception of bitcoins, many people, like me, overlook the potential of the blockchain technology. However, blockchain has applications well beyond cash and currency due to its use of cryptographic technology. The blockchain has the potential to transform how people and businesses cooperate.

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Agenda

We will actually watch a few videos to provide a better explanation of the topics. Since these people are more of an expert than myself. After we watch these videos, we will put on our RARC hats and have a short discussion to see if we can brainstorm where the Postal Service might use this technology.3

Blockchain Defined

The block chain is a shared, distributed, "open platform," public ledger that everyone can inspect, but which no single user controls. It is essentially a database that contains the payment history of every bitcoin in circulation. The blockchain provides proof of who owns what at any given point in time. This distributed ledger is replicated on numerous computers around the world.

CLICK SO THAT THE BITCOIN PICTURE APPEARS WILL SAYING THIS SENTENCE. This technology is what the entire Bitcoin network relies. To work as cash, bitcoin had to be able to change hands without being diverted into the wrong account and to be incapable of being spent twice by the same person which is resolved by blockchain.

It also provides an ordered time-stamped record of all confirmed transactions included in a chain. Because of this technology a spenders virtual Bitcoin wallet spendable balance can be calculated, and ownership and amount of bitcoins used in new transactions can be verified. This technology also eliminates ones ability to double spend bitcoins and keeps track of transactions continuously.

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Interworking

Peerto-Peer & Blockchain DatabaseSource: ZDNet by Dion Hinchcliffe

When transactions occur and if everything looks kosher, specialized nodes called miners will bundle the proposed transaction with other similarly reputable transactions to create a new block for the blockchain. It uses hash algorithms and any attempt to tamper with any part of the blockchain is apparent immediately. Using hashes keeps information secret which is vital for encrypting messages.

This entails repeatedly feeding the data through a cryptographic "hash" function. This hash is added with other data into the header of the proposed block, the hash function is used again, becomes the new block's identifying string, and that block is part of the ledger. Each new header contains a hash of the previous block's header, which in turn contains a hash of the header before that, and so on and so on all the way back to the beginning. It is this concatenation that makes the blocks into a chain.

In order for transactions to be confirmed, they must be packed in a block that fits very strict cryptographic rules that is verified by the network. A block of one or more new transactions is collected into the transaction data part of a block. Copies of each transaction are hashed, and the hashes are then paired, hashed, paired again, and hashed again until a single hash remains. Chaining blocks together makes it impossible to modify transactions included in any block without modifying all following blocks. If anyone changes what goes into the block or a transaction in any way and the hash would longer match the latest block's identifier, and will be rejected.

These rules prevent previous blocks from being modified because doing so would invalidate all following blocks. Therefore individual is prevented from easily adding new blocks consecutively in the block chain. This way, no individuals can control what is included in the block chain or replace parts of the block chain to roll back their own spends.

Yeah I know that sounds like mobo jumbo. In order to make it easier for you. I have included another video.

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Advantages & Disadvantages

AdvantagesBlockchains provides tamper detection especially when it comes to retail transactions. If someone starts a transaction but later tries to stop the transfer of funds through the manipulation of the transaction and the production of a new version of the blockchain, the rest of the network would have lengthened the original blockchain already by the people could figure out the blockchain puzzle. This functionality stops cheating. In addition, transaction outputs are tied to transaction identifiers (TXIDs), which are the hashes of signed transactions. Because each output of a particular transaction can only be spent once, the outputs of all transactions included in the block chain can be categorized as either Unspent Transaction Outputs (UTXOs) or spent transaction outputs. If the value of a transactions outputs exceeds its inputs, the transaction will be rejected. However if the inputs exceed the value of the outputs the transaction will go through.

Drawbacks of BlockchainProcessing and Energy Consumption. Because of the blockchain architecture which is rooted in cryptography it requires a lot of hard computing and every calculation takes up a lot of energy. The amount of power used by the network to compute blockchain calculations is unknown. Even if everyone were using the most efficient hardware, its annual electricity usage might be about two terawatt-hours or up to 40 terawatt-hours. In addition, the size of blocks in the blockchains is designed to be capped at one megabyte which is about 1,400 transactions or around seven transactions per second. This number is 336 less transactions a second currently handled by Visa. However, specialized energy-efficient mining computers could be a viable alternative with faster connections that will allow larger blocks to transmit across the network just as fast as smaller ones. Although blocks could be made bigger, it would take longer to transmit the transaction through the network and increases the chance for forking and cyber-attacks. Technology Modification. Changes made to the blockchain are not easy and requires community-wide agreement. The participants in a blockchain system collectively keep the ledger up to date: it can be amended only according to strict rules and by general agreement. Consensus among these users does not come easily.

Security. Although the technology so far has proven to be secure, skeptics argue that blockchain security may unsound, its procedures may not scale, and the technology may be unable to support thousands of different services with millions of users. Academic researchers have identified ways to compromise the block chain.

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Potential Industry ImplementationsSource: Lets Talk Payments (LTP)

Blockchains have a host of other uses. Dozens of startups, banks, and countries hope to capitalize on the blockchain technology, either by modifying existing technology or creating new blockchains of their own. Some of the potential implementations of blockchain include:Document notarization.Distributed Ledgers. Private contracts between individuals.Streamline stock markets and record securities trading of private companies.Inventory and control of assets."Smart Contracts." Standard "settlement coins and regulatory compliance.Database interoperability and maintenance. Inventory of Internet of Things networked objects.Car rental and sharing.

Financial-services firms are contemplating using blockchains as a record of who owns what instead of having a series of internal ledgers thereby removing the need for reconciling each transaction.

Blockchains could be used to settle transactions in minutes or seconds and save banks up to $20 billion a year by 2022. Currently, payment systems are mostly centralized therefore transfers are cleared through the central bank. When financial firms do business with each other they must synchronize their internal ledgers. This process can take several days, which ties up capital and increases risk.

Blockchains would fix double-entry bookkeeping for ledgers. Ledgers that no longer need to be maintained by a company or a government may in time spur new changes in how companies and governments work, in what is expected of them and in what can be done without them. At the same time, a world with record-keeping mathematically immune to manipulation would have many benefits.

The NASDAQ exchange will soon start using a blockchain-based system to record trades in privately held companies.

Transferring any type of asset including bonds, shares, units of precious metals, land, luxury goods, works of art, etc.

Banks are looking to implement private blockchains as a way of keeping tamper-proof ledgers, making it easier regulatory requirements compliance with knowing their customers and anti-money-laundering rules. Private chains open only to vetted users. If all the users start off trusted the need for mining and proof-of-work is reduced or eliminated, and a currency attached to the ledger becomes an optional extra.Fix the issue with hard-to-maintain and often incompatible databases and the high transaction costs of getting them to talk to each other. Ethereum's distributed ledger can deal with more data than bitcoin's can and it comes with a programming language that allows users to write more sophisticated smart contracts, thus creating invoices that pay themselves when a shipment arrives or share certificates which automatically send their owners dividends if profits reach a certain level.

IoT Centrally track and manage networked objects such as fridges, doorstops and lawn sprinklers, etc.Such vehicles could stash away some of the digital money they make from renting out their keys to pay for fuel, repairs and parking spaces.

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Blockchain within the Postal Service

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In the News

Source: Google

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