Blockchain Blockchain

How blockchain works

Blockchain technology can transform well-established business processes and radically change how you work with regulators. Nevertheless, blockchain remains an experimental technology - many problems of its use have not yet been solved.

Interest in blockchain continues to grow: back in 2016, many banks, exchanges and fintech companies announced the launch of their own projects to develop technology. Blockchain remains one of the hottest topics in financial services and stock markets, and there is every reason to expect an increase in the speed of its distribution. Several large financial organizations have formed teams to study the capabilities of the technology, and some market participants have united in consortia to develop standards for its use. According to a report presented at the World Economic Forum in 2016, over the past three years, more than $1.4 billion has been invested in studying blockchain and its application in the financial services industry ("Distributed Ledger Technology: Implementations of Blockchain for the Securities Industry," FINRA)^[1]

The technology is really able to protect the data that we have to work with, while making it more accessible and transparent. In addition, blockchain can noticeably reduce costs and minimize the time required to solve emerging problems and eliminate errors.

Blockchain appeared as a technology for launching bitcoin into circulation, and was initially used exclusively to manage cryptocurrencies. However, since its introduction in 2009, the scope has expanded significantly. And now in a variety of articles, forums and conferences, new options for using the technology are being discussed, including in trade reporting; in case of non-cash payments, checks and payments; in accounting; monitoring; risk management; audit; management and financial accounting; compliance (including the prevention of financial crimes, although, of course, the fight against fraud, the possibilities of blockchain in this area are not limited). The fact is that information stored using the blockchain can be recorded in a common registry, available in real time or very close to it. This means that all interested parties can be directly involved in the process - even those who previously could only count on a standard report at the end of the transaction.

The introduction of blockchain is by definition a complex process, but the main idea of ​ ​ the technology is simple: a distributed registry or database launched simultaneously on a set (sometimes we are talking about millions) of nodes distributed around the world between different users and organizations. The uniqueness of the blockchain lies in the invariability or irreversibility that the cryptographic security system guarantees. For example, when transactions from the registry are grouped into blocks and written to the database, the entry is preceded by cryptographic verification, as a result of which it is almost impossible to change the state of the registry through any fraud. In favor of confidence in the blockchain, it also says that any changes to data in the blockchain are possible only if network participants confirm the legitimacy of the transaction in accordance with general rules and protocols.

Problems using blockchain

Main article: Blockchain problems

Blockchain Solutions Market

Main article: Blockchain (global market)

Main article: Blockchain (European market)

Building information systems using distributed register (blockchain) technology, this is a fast-growing business. More on its development here.

Investment in blockchain

Main article: Investment in blockchain

Blockchain in countries around the world

Blockchain in Russia

Overview of the development of blockchain technology in Russia in articles:

• Blockchain in Russia
• State policy for the development of blockchain in Russia

• Blockchain technologies (Russian market)

• Blockchain in Russian banks
• Blockchain in the Central Bank of Russia
• Masterchain Russian National Blockchain Network
• Blockchain in Sberbank

• Blockchain in Moscow

Blockchain in China

• Blockchain in China

Blockchain in Malta

Main article: Blockchain in Malta

How blockchain is used

Cryptocurrencies

Main article: Cryptocurrencies

Tokenization

Main article: Tokenization

Tokenization is the process of converting securities, precious metals, real estate and other assets into digital tokens that can be acquired, sold and exchanged.

Banks

Main article: Blockchain in banks

• Blockchain in Russian banks

Banks serve for the safe storage and transfer of valuable assets. Blockchain, being a secure digital registry, can perform these functions. So in the coming years, we should expect a strong influence of blockchain on the banking industry, experts say. According to some market participants, this technology will allow banks to save about $20 billion by abolishing intermediaries in transactions.

According to a report by the World Economic Forum, decentralized payment technologies, including bitcoin, can transform the "business architecture" of remittances, which has not changed for more than 100 years. Blockchain is able to circumvent these inefficient systems and create a more open, fast and fee-free flow of payments around the world.

How blockchain helps transform business processes in a company

Blockchain - ready-to-use technology

In 2022, distributed registry technologies are changing the nature of doing business and helping companies rethink how they manage tangible and digital assets. Trendy cryptocurrencies and non-interchangeable tokens (NFTs) capture media headlines and the public imagination, but these and other blockchain and distributed registry (DLT) technologies are also attracting interest in businesses. Similar to TCP/IP protocols, which provide basic support for corporate network communications, shared registries can eventually become an integral, if invisible, foundation for business operations, allowing established industry leaders to expand their portfolios and create new value streams, as well as allowing start-ups to dream of creating exciting new business models. Blockchain and DLT platforms have overcome a cycle of disappointment and excitement and are confidently moving towards real performance. They fundamentally change the nature of doing business beyond organizational boundaries and help companies rethink how they create and manage identity, data, brand, provenance, professional certificates, copyrights and other tangible and digital assets. In fact, although companies canceled purely speculative blockchain projects during the pandemic, they doubled the rate on those that bring proven advantages. In 2022, technical advances and regulatory standards, particularly in closed networks and platforms, help drive technology adoption in areas other than financial services. Emerging technologies and platforms help move forward by supporting compatibility, scalability, and security. As businesses embrace blockchain and DLT platforms, creative use cases are emerging in many industries that fundamentally change the nature of doing business beyond organizational boundaries.

Blockchain - how technologies and standards develop

First-generation blockchain and DLT have proven the feasibility of applications such as cryptocurrency trading, clearing and settlements, but they have also proven slow, energy-intensive and impractical to scale. At first, the market was teeming with numerous platforms and protocols. However, it lacked technical or technological standards, and without interoperability, enterprises could not interact across multiple platforms. Early uses were limited to simply transferring value from one side to the other. Users could not create conditional transactions or contingencies that would allow the parties to agree on terms. In addition, the implementation was limited to unique issues related to transaction validation. For example, cryptocurrencies and other uses tested transactions using the Proof-of-Work consensus mechanism, a complex and lengthy computational process that consumes a large amount of energy and has a high transaction fee and a slow transaction time of 10 minutes or more for each transaction. Such problems are typical of the early stages of most technologies, and entrepreneurs, together with academic institutions, have begun industrializing blockchain and other DLT platforms. By 2022, improving technologies, evolving standards and new delivery models are driving the adoption of blockchain in enterprises.

For example:

• Private networks and trusted ones. Many early DLT platforms were low-trust public networks that anyone could participate in. As a result, these networks often included fraudulent members and lacked complete confidentiality and anonymity. In 2022, risk-averse enterprises have more reliable and safer options: closed (i.e. private) networks that allow only select, verified participants to participate; and trusted networks that can be joined by anyone with a confirmed identity, and member activities are controlled through permission-based roles.

• Technological improvements. The growing focus on usability and speed allows for practical uses that are not supported by first-generation applications, including the ability to create self-fulfilling contracts and contingencies. New types of cryptographic processes to validate transactions consume much less power than Proof-of-Work and eliminate bottlenecks by providing faster transactions and lower transaction and energy consumption fees. For example, the Proof of Authority mechanism is used to verify transactions in many private and trusted networks preferred by enterprises.

• Improved compatibility. Many DLT platforms have emerged that are suitable for enterprise use. Polkadot, Cosmos, Wanchain and many other new protocols and platforms allow businesses to connect multiple blockchains and seamlessly interact, collaborate, share data and transact with multiple entities across multiple platforms. This enables organizations to develop core infrastructures that support multiple usages and custom applications. Architecture, consensus mechanism, token type, and other characteristics vary by platform, and organizations may need to learn more than one, depending on goals and use case.

• Technological and innovative ecosystems. As the number of DLT platforms increased, innovation simultaneously grew and a vast dynamic ecosystem emerged. Its participants develop decentralized applications that provide specialized functions such as identity management and supply chain management.

How to use blockchain outside the financial sphere

Attracted by trends in safer and more efficient transactions, the financial services industry is leading the way in using blockchain and other DLT platforms. But the benefits extend far beyond Wall Street, especially in use cases where multiple organizations access and share the same data and need access to transaction history. As a rule, this is an expensive, ineffective process that lacks trust and security. As blockchain and other DLTs have the potential to improve the efficiency of business operations and create new ways to create value, many forward-thinking companies in other industries are adopting and integrating these technologies into existing infrastructures and roadmaps. The vast majority of study participants from Deloitte (80%) say that new sources of revenue from blockchain, digital assets and/or cryptocurrency solutions are emerging in their industries.^[2]

Top 5 destinations for blockchain use

Banking leads the way in blockchain adoption, followed by telecommunications, media and entertainment; production; health care and natural sciences; retail and consumer goods; and public administration. Usage options gaining momentum include:

• Personal data and digital personal identity. Using blockchain and other DLT platforms for secure storage and management, users can establish ownership of their personal data and create and control their own tamper-proof digital IDs. This can improve the security of identity information and prevent the creation of fake or stolen identities. Apps include contact tracing, electronic health records and credentials, and electronic voting.

• Reliable data exchange. Access to and sharing of data between parties is usually restricted due to the disparate nature of technology and privacy concerns. Private and trusted DLT platforms enable organizations to securely communicate with and share data, ensuring that trusted, trusted third parties have only the required levels of data access. Without sacrificing data integrity or privacy, organizations can share data outside of the company and industry, and build collaboration and trust between ecosystem partners. For example, secure data sharing between health care providers can improve the sharing of medical information about patients; in the intelligence community, this could facilitate the exchange of intelligence on threats and other important information between departments and international borders.

• Grant funding. For both funding organizations and grantees, blockchain and other DLT platforms can help reduce the administrative burden associated with monitoring and reporting financial results and performance. Studies of federal agency initiatives have found that using blockchain to implement, track and monitor grant payments has improved the quality and transparency of grant reporting, as well as improved the effectiveness of payments and reporting.

• Accounting of transactions. Calculations - especially for large global organizations or organizations with numerous legal entities - often include multiple enterprise resource planning systems, spreadsheets, and manual processes; reconciliation is often delayed by many weeks after the transaction is completed. Blockchain and other DLT platforms can improve traceability, transparency, and the ability to audit accounting for in-house transfers, especially in mergers and acquisitions, by verifying and creating an overall unchanged record of transfers.

• Transparency of supply chains. In global logistics, blockchain and other DLT platforms can improve product tracking and tracking to reduce counterfeit products, illegal or substandard ingredients and components; ensure that the origins of things like turkey, diamonds and wine are tracked; to help governments enforce tariffs and trade policies. They can also help track assets and shipments, providing greater transparency throughout the procurement process, from purchase orders and logistics to billing and payments.

• Customer and fan engagement. Selling NFT as collectibles allows people and organizations to build digital communities, attract fans and customers, and build their brands. When COVID-19 limited live broadcasts of sports and entertainment events, the NFT helped artists and sports figures, teams and leagues diversify revenues and stay in touch with their fans and customers. And when used to sell tickets for events, blockchain and NFT can eliminate ticket fraud and speculation.

• Monetization for creativity. Artists, writers, inventors, and other authors often attempt to prove intellectual property ownership and monetize it through licensing, patents, and copyrights. With blockchain and other DLT platforms, content creators can embed a smart contract into their intellectual property that will be executed each time intellectual property is downloaded. The contract can trigger an automatic payment and change depending on the identity of the user; for example, a large enterprise will pay more than an ordinary consumer.

Customer Needs for Blockchain Implementation

An analogy can be drawn between today's DLT platforms and the Internet of the mid-1990s, as well as with the changes that the Internet has brought to business processes in various industries and ecosystems. In its infancy, the internet was slow, uncomfortable and misunderstood. Some established companies ignored its arrival - after all, they reasoned, there is no market for online shopping or video streaming. On the other hand, many startups enthusiastically joined the new, at that time technology, adding the suffix ".com" to the names of their companies and spending generously to launch businesses and products.

Both approaches turned out to be bad. For every market leader who ignored the internet and faded into the background, however, there was another savvy incumbent who eventually became an online giant. And while internet startups with unsustainable or flawed business models did not survive in the long run, those with robust business strategies and implementation have become incredibly successful. When the dust of the dot-com era settled, those companies that built - or rebuilt - their business models based on the real needs of business and customers held out.

The state of blockchain and other DLT platforms in 2022 is not unlike the state of the Internet in 1997: clumsy, with an inadequate user interface, but with more enterprise application capabilities. Like the Internet, they help businesses and organizations streamline business processes and operations and add value by building new digital business models. Their ability to gain trust outside the organization without the use of traditional intermediaries fundamentally changes the way value is created and delivered - and, like the internet, they change the way businesses are done across industries and ecosystems.

Within one organization, changes can be complex; in several organizations and industries, this will probably be several orders of magnitude more difficult. As the barriers to DLT use disappear, both current and new entrants in leading positions according to business and customer needs can more seamlessly drive this transformation. Many entrepreneurs and startups are working to identify new use cases by customers, and to develop and attract investors for new business models based on blockchain and other DLTs. But established market leaders are not sitting idly by as long as these technologies destroy their industries. Instead, they use DLT-based business models and exploit their reputation as trusted providers. For example, Microsoft relies on blockchain to provide records of royalty agreements and payments for its gaming partners.

Promising areas of blockchain implementation

In 2022, emerging technologies, standards and new delivery models are driving the adoption of blockchain and other DLT platforms by businesses. Many enterprise use cases continue to emerge, enabling organizations across industries to develop new business models that transform the value creation of all types of physical and digital assets and streamline business processes outside the organization. As trust in the distributed registry grows, can a collective online entry ever be seen as a more credible statement of truth than an offline entry? Innovative business models can help start-ups reach a new level and allow traditional businesses to develop or complement existing business strategies to maintain their reputation as trusted brokers in a "precarious" distributed registry ecosystem. To succeed, both newcomers and old-timers will likely need to first identify the legitimate needs of customers or businesses. As organizations use blockchain and other DLT platforms to create new business value, they will likely need to understand which platforms and protocols are most relevant to their industries and use cases, and prepare existing enterprise architectures for the future to run across multiple platforms.

{{quote 'Two decades of working and learning about new technologies taught me to see the difference between hype and hope - between technologies that really transform and those that are not. In 2018, I was asked to consider possible uses for blockchain when it was at the peak of its hype. Naturally, I approached the topic with a degree of healthy skepticism. But as our organization cut off the excess, we found the right use case for transformation.

I see business issues through a data lens and one aspect of BMW Group's operations that needed better data was our complex supply chain. We produce about 10,000 vehicles a day at 31 plants in 15 countries, using a complex global network of suppliers. Not long ago, we were still relying on preliminary spreadsheets and email. Fraud, limited visibility of second-level suppliers and mismatch of demand and supply were common problems that could potentially cause production failures and quality problems, said Andre Lukow, Ph.D., head of new technologies at BMW Group IT}}

Andre's team began by testing a concept that allowed BMW Group and several suppliers to more easily share supply chain data via blockchain. Real-time surveillance, available to all participants in the supply chain, prevented overstocking and shortages of goods. Transparency not only brought more information about the origin of the parts, but also allowed suppliers to identify opportunities for improvement.

After demonstrating the prototype to management and supplier partners, BMW Group saw a clear business opportunity and invested in expanding blockchain work to more suppliers. The initiative, officially known as PartChain, provided almost complete transparency and influenced broader data-sharing initiatives such as Catena-X, Automotive Network e. V. Catena-X creates a collaborative data ecosystem across the automotive value chain, enabling businesses such as OEMs, small and medium enterprises, and recycling companies to take full advantage of a secure, data-driven economy. By all accounts, this technology has proven effective in delivering initiatives that accelerate data transparency in our value chain.

After the excitement around blockchain in 2018 and the progress BMW Group has made since, two things are clear. First, blockchain is transforming, and one day we will use blockchain-based technologies without even realizing it, because of their potential to improve business processes and customer service. Second, the transformation may take longer than anyone expected. Businesses need to adopt broader thinking about which new markets or ecosystems can be supported and simplified with blockchain; they need to ask the right data-driven questions to find the right uses. If we move the technology forward from all sides, we will definitely see even more wonderful ideas declared Andre Lukov

Management prospects from the introduction of blockchain

• Strategy. CEOs have a unique opportunity to work with their IT executives to understand the art of the possible when it comes to blockchain technologies. Advances in blockchain technology by 2022 are akin to the adoption of TCP/IP protocols for the Internet 30 years ago. While there is still limited broad understanding of blockchain technology, the scope to impact business models is enormous. Just as databases have enabled reengineering of business processes within organizations, DLTs simplify processes between organizations. Managers need to decide how quickly they want to be on the front line of implementation.

• Finance. While many CFOs recognize the theoretical utility of blockchain and other digital distributed registry technologies, they fluctuate when it comes to full-scale adoption. CFOs can use flexible methods to test DLT use cases to be more confident in their effectiveness and security. They can work closely with IT executives to identify test cases, deploy experiments, and monitor results. Once the use cases are successful, organisations can analyse regulatory and financial risks before scaling up to corporate and cross-party implementation.

• Risks. Corporate adoption of blockchain has yet to become widespread, and understanding of the technology's risks is still in its infancy. Risk management directors should work with IT to increase their organization's readiness for new technologies. They can create roadmaps for adoption and identify blockchain use cases, as well as actively reduce risks. For example, new cryptographic applications can significantly improve the efficiency and reliability of transaction validation, and blockchain-based digital identification solutions can improve the security of sensitive transactions. Moreover, sketches used to prepare for blockchain could be applied to further introduce new technologies such as quantum computing.

Public sector

2020: Ministry in Denmark reveals how blockchain will beat corruption

In early September 2020, the Danish Ministry of Development Cooperation published a report recognizing blockchain as an effective tool to combat corruption, especially in refugee camps. Blockchain provides increased oversight of businesses, governments and stakeholders, thereby cutting many corrupt ties.

The report identified blockchain technologies as one of four ways to combat corruption. One of its main consequences is considered "corrosion of trust," and the Danish ministry believes that blockchain will help restore public confidence in the authorities. Secure and transparent data recording is actively used in Denmark to grant refugees rights to aid, land and cash benefits, and to prevent fraud. The benefits of using blockchain include the low cost of remittances, reducing or even eliminating intermediaries such as banks, and the ability to electronically identify.

Danish authorities intend to defeat corruption using blockchain

The fact is that refugees often cannot show identification, which means they cannot make payments from a bank account or vote. Blockchain technologies and biometrics can solve this problem. For example, the World Food Program is already using biometric data to help refugees in Jordan and Pakistan.

However, linking personality to data raises privacy concerns and a "right to be forgotten" issue. The General European Data Protection Regulation (GDPR) gives an individual the right to delete their data. However, the very nature of blockchain technology does not allow you to change or erase the entered data. Ministry officials said in the report that they understand this problem and are already studying issues of solving it.^[3]

2019: Blockchain could end bureaucracy in government agencies

On February 27, 2019, the consulting company Booz Allen Hamilton presented an overview of possible ways to solve bureaucratic problems in government agencies using blockchain technologies.

Booz Allen Hamilton specialists argue that blockchain can bring undeniable benefits to the government. Thanks to a transparent and decentralized system, data verification can be carried out by any participant, which will strengthen the trusting relations of government agencies with citizens. In addition, the use of blockchain for some services will allow independent verification of complaints.

Administrative work in the civil service is considered a possible application of blockchain, which should reduce bureaucracy

Another potential benefit is the protection of sensitive data such as Social Security numbers, dates of birth, addresses and driver's license numbers. Government employees are the primary targets of hackers, analysts said. But cyber attacks can be reduced or prevented when deploying blockchain technologies.

The third possible advantage is reduced costs and increased efficiency. Using blockchain can reduce data redundancy, simplify processes, reduce audit burden, improve security, and ensure data integrity.

Government agencies are certainly interested in the prospect of using blockchain. The diversity of government functions provides an incredibly wide field of activity for blockchain technologies and supports interest and investment flow. Examples of blockchain use in government agencies include voting, automated data logging, record-keeping, transactions and account reconciliation, social and humanitarian assistance, asset markets, and giving individuals control over their sensitive data and medical records.

Blockchain could improve the efficiency of decentralized processes, analysts said. For example, the use of blockchain technologies can speed up the collection of documentation from several government agencies that do not have common systems or close organizational relations. Such use can solve the problem of dispersed processes such as permitting and registration.

The exchange of information between public organizations and the private sector on emergency assistance, insurance claims, medical claims and other multilateral transactions can improve the coherence of these structures and significantly improve the attitude of citizens.

Thanks to the blockchain, administrative functions are made easier, since documentation is maintained automatically and the need for people who request a central document repository to access information about owners disappears

Beyond bureaucracy, a common government problem is corruption, and analysts point out that blockchain can also play a role in fighting it. Some of the early instances of blockchain use focused on the idea of limiting corruption, fraud, theft and misuse of public resources by both the government itself and citizens. However, cases of theft cryptocurrencies emphasize that even blockchain systems cannot provide complete security.

Blockchain technologies can not only fight bureaucracy and corruption, but also, in general, change the way public services are provided to citizens. The possibilities are almost limitless: blockchain technologies provide citizens and enterprises with the opportunity to manage and share information, reduce problems in the assessment of intellectual property and royalty payments, provide digital identification documents and economic freedom.

However, the widespread use of blockchain in government requires huge investments of labor and funds. Analysts note that blockchain technologies, for all their attractiveness, are not an instant panacea.^[4]

Compliance Applications

Once the data is stored in a block chain, it cannot be changed or deleted. This allows blockchain to be used as documentary evidence or confirmation of the transfer of digital assets (bitcoin or other digital currency). With the same success, it can be used to store information about the owner of the actual property - in 2017, the effectiveness of this technique is assessed by the National Land Service of Sweden. With the help of an experimental blockchain-based system, it is planned to digitize the processes in the field of real estate purchase and sale. Immutability allows blockchain to be used as a method of proving compliance of processes with regulatory requirements - recording all actions and results obtained in the chain of blocks can serve as an audit log for^[5] regulators^[6].

In addition, the latter can access the internal blockchain of a financial institution in almost real time - to view information. Such an innovation will allow regulators to play a more active role in the implementation of control and brings them closer to the status of participants in the process. And this, in turn, can significantly reduce the time and effort needed by financial institutions to create regulatory reporting. That is, at lower costs, blockchain will provide higher quality, accuracy and reliability of the process.

Blockchain is also promising in terms of countering money laundering (AML) and the Know Your Client (KYC) procedure. Now banks and other financial institutions have to take a huge number of actions to verify each new client, and the process of collecting and verifying information in some markets can be delayed for several months. If the necessary data were already in a distributed database resistant to hacking, then many processes that are now mandatory could simply be abandoned. Blockchain is ideal for this, because any changes in client data will be instantly distributed among all blockchain participants. Blockchain can also provide records of the compliance of each customer's individual actions with regulatory requirements. In addition, each user will be a conditional custodian of information in the blockchain, which will provide additional protection against theft of personal data.

Another application of blockchain is the creation of a system for managing user personal data. The use of blockchain allows you to reduce KYC/AML processes to a simple automated check that the corresponding system could carry out throughout the market. It is likely that the exchange of confidential customer information between financial institutions will become the norm once a trusting relationship is established in the blockchain ecosystem. Notably, the international SWIFT system has already announced that its own KYC registry, which now includes data from more than 1,000 banks, will be available to trusted partners and customers in the future. Such an action can be considered one of the first steps towards the introduction of digital certificates in the financial sector - and this is the ultimate business goal of the movement in this direction.

Blockchain in the defense sector

Main article: Blockchain in the defense sphere

Cyber security

Although blockchain is an open registry, data transfer is strictly verified and carried out using advanced cryptographic methods. With the widespread adoption of this technology, which is considered more reliable than traditional systems, the likelihood of hacker hacking will decrease. Cybersecurity will also increase due to the refusal of almost all human intermediaries, according to Goldman Sachs.

Courts

• Main article: Blockchain in the courts

Medical facilities

Main article: Blockchain in Medicine

Education

Main article: Blockchain in Education

Vote

The University of West Virginia (West Virginia University) has already thought about using a blockchain-based voting platform. Thanks to her, students could cast their votes through mobile devices, and the election results would be honest.

Fundraising - ICO

Main article: ICO (Initial Coin Offering)

Blockchain in insurance

• Main article: Blockchain in insurance

Oil industry

Main article: Blockchain in the oil industry

Transport

• Blockchain in the transport industry

Construction companies

Main article: Blockchain in construction

Blockchain in Real Estate

Main article: Blockchain in real estate

NFT (cryptographic tokens)

Main article: NFT (cryptographic tokens)

Smart contracts

Main article: Smart contracts

Smart contract - a computer algorithm designed to conclude and maintain commercial contracts in blockchain technology.

Art

Main article: Blockchain in Art

Industries for the distribution of music, texts, digital art, new religions - use blockchain. Read more here.

Car Leasing and Sales

In 2015, Visa and DocuSign created special blockchain-based software to improve the convenience of paying for a car rental and making leasing payments for it. Payments are automatically debited as the vehicle is operated according to the contract. A similar solution can be used when selling cars and registering them.

Car sharing

The concept of sharing a private car using online ride-hailing services (rideshare) does not involve decentralization: Uber or another similar company acts as a dispatch center and uses algorithms to control drivers and their expenses. However, Israeli startup La'Zooz offered a service that has already been dubbed "anti-Uber."

The developers have created a digital currency (like bitcoins), which is recorded using blockchain-like technology. People travel for this virtual money and also earn it on trips. At the same time, the application monitors the movement of users.

Network Technologies and the Internet of Things

IBM and Samsung are working on the Adept concept, which involves using blockchain-like technology to create a decentralized network of a huge number of different IoT devices that can interact with each other for offline updates, troubleshooting and power management.

Forecasting

In the markets of forecasting technologies and research, analysis and consulting, a turning point can occur as a result of the introduction of blockchain. An example is the online prediction platform Augur. With the help of blockchain, the service intends to decentrally offer betting services not only on sports and promotions, but also on election results, the likelihood of natural disasters, etc.

Power

Main article: Blockchain in power

In the field of power, a traditionally conservative industry, the world practice of applying blockchain is at the stage of testing and implementing pilot projects. But already now these technologies claim to create new energy and economic markets, new systems of division of labor and new social reality^[7] of ^[8].

Supply chains (in hours of food)

Blockchain provides universal transparency for various participants, which under other conditions would not be possible. For example, was the supply chain interrupted? If so, its members will receive notifications in the supply chain.

Within a few seconds, you can subsequently trace which product is damaged, since data such as the place of origin of the product, batch number, processing data, expiration dates and delivery data are stored in the blockchain.

As a result, food retailers and other members of the network can quickly track contaminated products to their source, immediately remove them from the market and reduce the spread of the disease.

Supply chain transparency plays a crucial role in meeting the needs of consumers. In the retail sector, in particular, there are many preferential opportunities that the supply chain could adopt from blockchain technology, for example, traceability and reliable information about the origin and state of food.

With the ability to track transactions in real time, consumers can trust the supply chain. Information about the origin and processing of products is becoming more and more important for consumers, and in the future it will become important for the buyer. The end consumer can obtain such information by reading the barcode.

We can safely assume that thanks to blockchain, supply chains will no longer face bad reviews or scandals in 2018.

Thanks to blockchain technology, any participant in the supply chain can access the necessary document in real time and constantly see all the changes that occur with its status. Of course, this transparency makes it possible to immediately detect ineffective links and then be able to correct them as soon as possible. This leads to long-term cost reductions. Real-time solutions

Blockchain technology opens up new opportunities in supply chain management, including real-time decisions that can be made by everyone in the chain.

Continuous real-time access to the supply chain with all related transactions allows you to work iteratively.

For example, a company that knows in advance that a delivery contains only part of the ordered goods can reschedule and access its own inventory, order missing goods from another supplier, or revise the price.

With this in mind, you can redirect the container to another warehouse or release the containers in the warehouse, on the vehicle or on the loading platform to reduce costs. In case of non-compliance, each member of the supply chain affected will be notified directly as described above.

Projects on the blockchain

Information about projects using blockchain technologies is collected in the article:

• Projects based on blockchain technology

2024: Blockchain smartphone for crypto traders launched

In mid-January 2024, Solana Mobile announced a new blockchain smartphone for crypto traders - the Saga Chapter 2 device, which replaces the first generation Saga model. The goal of the project, according to the developer, is to make web3 technologies more accessible to users around the world. Read more here.

2023: Coinbase releases free blockchain app development tool

On February 23, 2023, the cryptocurrency exchange Coinbase announced the launch of the free Base platform, the Ethereum Layer 2 (L2) network, which offers a safe and convenient way to create decentralized applications. More. here

2022: Israel's Adama to use blockchain to combat counterfeiting

The Israeli company Adama will launch a system for tracking agrochemicals in the Brazilian market, based on blockchain technology, in order to combat counterfeit products. This became known on September 19, 2022. Read more here.

2021: IPChain Association to implement blockchain infrastructure in the Republic of Kyrgyzstan

On October 27, 2021, the IPChain Association entered into an agreement with the Project Office state institution (established by the Government of the Republic of Kyrgyzstan) dealing with digitalization issues. According to the text of the document, the parties agreed to introduce the blockchain infrastructure of intellectual property in the republic . Read more here.

2020

Russia is in third place after the United States and China in terms of the number of patent applications for blockchain technologies

On February 17, 2021, the Ai-Teko company informed TAdviser that the Skolkovo intellectual property center had completed the development of a patent landscape using blockchain technology. Analysis and patent search among the array of patents and patent applications published in the world revealed 357 patent families in areas in the financial and logistics spheres for the period 2006-2020.

The United States and China are leading countries in the number of developments in this area and, accordingly, in the number of patent applications. Russia is in 3rd place in the number of patent applications filed between 2017 and 2020 using blockchain technology in both areas under investigation. Read more here.

Australia has allocated about $5m to develop blockchain projects

The authorities Australia allocated 800 million Australian dollars (about $573 million) from the country's budget USA for the implementation of the Digital Business Plan, which includes seven grants related to distributed registry technologies. This became known on October 2, 2020.

It is known that almost $5 million. The United States from the allocated budget will be aimed at implementing two pilot blockchain projects, the main task of which will be to reduce business costs. Most of the budget is almost $184 million. The United States is allocated to the creation of a digital identification system.

As Scott Morrison stated, "The plan aims to sustain and rebuild Australia's economy. With its help, outdated regulatory barriers will be eliminated. The plan will also increase the capabilities of small businesses and help introduce technology into the economy. "

Australians are also taking an interest in digital assets. With the exception of the peak of 2017, during the growth of bitcoin to an absolute maximum near the level of $20 thousand. The United States, the country has maintained stable demand for BTC for a long time.

As the source recalled, China remains the leader in the issue of large-scale application of blockchain. In the fall of 2019, Chinese President Xi Jinping announced the country's entry into the path of blockchain innovation. One of the projects that will allow this country to use technological progress to its advantage was the national blockchain network. Other countries, including the United States, are also exploring the possibility of practical use of this technology^[9].

The United States has classified blockchain as a critical industry

At the end of March 2020, the US Department of Homeland Security published recommendations regarding the coronavirus pandemic. In this document, heads of blockchain projects that deal with the distribution of food and agricultural products are called "workers of critical infrastructure."

The Agency cyber security and Infrastructure Security provided an initial list of sectors and workers to continue on the normal schedule. This list is advisory in nature and aims to help states and local authorities support the required workforce.

US Department of Homeland Security publishes recommendations regarding coronavirus pandemic

Blockchain allows you to accurately track the movement of goods in the supply chain. Several American food manufacturers and technology firms are actively using blockchain to authenticate the product and manage inventory. One such initiative is, IBM Food Trust whose members use the technology DLT to control the supply of farm-to-market food. Organizations using USA the IBM Food Trust blockchain include Albertsons, Drakes, Raw Seafoods, the National Institute of Fisheries and, Walmart among many others.

In healthcare, blockchain systems are used to manage patient data, monitor insurance, maintain supplier catalogs and track employee credentials. The recommendations do not mention blockchain companies that control the supply of drugs or are otherwise used in healthcare, but highlight the category of "workers who make health plans, bill and are practically unable to work remotely." They also belong to a critical industry.^[10]

2019

India launches national blockchain program

In late November 2019, India's Minister of Electronics and Information Technology Sanjay Dhotre announced the launch of a national blockchain deployment program in the country. It is intended for widespread adoption of the technology in all industries.

Dotre reported that blockchain is one of the most important research areas for the Ministry of Electronics and Information Technology and has huge application potential in sectors such as banking, finance, governance and cybersecurity.

Indian Government Prepares National Blockchain Rollout Program

In 2018, the Government of India allocated $900 thousand for the deployment of a multifaceted project called "Distributed Center of Excellence for Blockchain Technologies," which will be attended by the Center for the Development of Advanced Computing (C-DAC), the Institute for Development and Research in Banking Technology (IDRBT) and the Veermata Jijabai Institute of Technology (VJTI). The project aims to develop and pilot the implementation of blockchain solutions.

A blockchain platform for property registration is already being tested in the Indian state of Telangana. While land owners note the clear benefits of blockchain making it easier to obtain documents, the problem of corruption persists. The data stored in such a system cannot be changed after entry, but so far no way has been found to prevent government officials from entering deliberately incorrect information.

Nevertheless, blockchain is winning back more and more positions. Within a year in India, the Proof-of-Expiration (PoE) blockchain structure is expected to be used to confirm the authenticity of diplomas, certificates, contracts and other documents. In addition, the PoE platform can be used to control vehicles and hotels.^[11]

Business has lost faith in blockchain

In 2019, there will be noticeably less venture money in the blockchain industry, CB Insights believes. At least, if the current pace of investments continues, then by the end of the year it will receive only $1.6 billion, which is much less than blockchain projects received in 2018, namely more than $4.1 billion. To an even greater extent, participation in blockchain projects of corporate investors will decrease. So far, in 2019, only 96 corporate transactions were concluded, which means that by the end of the year the number of the latter may fall by 36% compared to 2018^[12].

Among the risks that hinder the growth of venture capital investment, CB Insights analysts name many factors at once. Among the latter are cryptocurrency volatility, ambiguity, and in many cases, absence at all, regulators and, of course, lawsuits against a number of projects, primarily in the United States. Separately, the company draws attention to the difficulties with scaling blockchain projects, as well as the limited transaction speed, including in the case of the bitcoin blockchain.

Nevertheless, investments in blockchain projects by venture capital are likely to exceed 2017 in 2019, CB Insights says (for comparison: at the end of 2017, the industry received a little more than $1.2 billion from traditional investors). At the same time, most transactions today turn out to be concluded by blockchain companies of early stages. Thus, the number of seed transactions and investment districts of series A increased by 80% in 2017 to 88% following the results of the past months of 2019.

As for mid-tier deals (Series B and C), their share remains relatively unchanged, while later stage deals (Series D and later) are virtually non-existent.

"The growing share of transactions with early stage companies demonstrates the general immaturity of the blockchain market," CB Insights believes.

In terms of geography, over the past months of 2019, the US market accounted for the most transactions involving venture capital (40%). This is followed by China (15%), the UK (8%), Singapore (4%) and South Korea (3%). Those who believe in blockchain "'

CB Insights calls Digital Currency Group, Pantera Capital and Polychain Capital the most active venture investors in blockchain, as well as technology accelerators, primarily Boost VC.

It is Digital Currency Group that, as one of the early blockchain investors in the ranking, ranks first. In 2019, the company participated in 4 transactions, including a $65 billion investment in the Figure Technologies fintech project. The company also invested in the video blockchain platform Livepeer and the CoinFLEX crypto exchange. It is followed by the Boost VC technology accelerator led by Adam Draper (son of famous American investor Tim Draper), which has invested in more than 50 blockchain companies over the past 5 years. Among the latest deals are investments in the decentralized DNS service Unstoppable Domains, the Guesser prediction marketplace and the Amun fintech company. In third place is the venture capital fund Blockchain Capital, also one of the world's oldest investors in distributed register technology.

According to analysts at CB Insights, investment funds from China also claim the first roles: for example, over the past 5 years, Febushi Capital has invested in more blockchain companies than leaders such as Pantera and Polychain.

South Korea's biggest companies build blockchain network to instantly identify people

In mid-July 2019, South Korea's largest technology, telecommunications companies and banks formed a consortium to create a new blockchain network as the basis for a new mobile authentication service. Members of the consortium were Samsung Electronics, local telecom operators SK Telecom, KT and LG Uplus, banks KEB Hana Bank and Woori Bank, as well as Koscom (an IT services provider for the Korean exchange). Read more here.

2018

Demand for blockchain programmers soared by 517%

At the end of February 2019, the Hired service, which allows job seekers to find vacancies and respond to employers' proposals, reported a huge surge in interest in companies for programmers with experience in developing blockchain technologies. Read more here.

Salaries of blockchain specialists soar to heaven after salaries of AI developers

Against the background of the high demand for blockchain engineers and programmers with knowledge of cryptography, the salaries of such specialists are soaring to heaven following the salaries of AI developers, the recruiting company Hired reported in October 2018.

According to the service, the average annual earnings of blockchain engineers reached $150-175 thousand. The salaries of developers of artificial intelligence systems fluctuate at about the same level. Tellingly, ordinary software engineers earn much faster - on average, within $135 thousand a year, says Hired, relying on its own statistics.

The average annual earnings of blockchain engineers reached $150-175 thousand by October 2018

The demand for blockchain professionals has grown due to the fact that more and more companies are launching projects in this area. As of October 22, 2018, top IT corporations such as, Facebook,, and have open blockchain-related vacancies Amazon. IBM Microsoft

Service Hired added the position of blockchain engineer to the list of covered professions at the end of 2017. Since then, the number of ads from employers looking for specialists in this profile has increased 400 times.

Commenting on the figures, Mehul Patel, CEO of Hired, noted that there are not enough software engineers on the market, and the deficit in the blockchain segment is much sharper, which provokes a rapid increase in wages.

"When the name of my position changed to" chief blockchain engineer, "proposals began to come constantly. Not a day goes by without me receiving an interview invitation on LinkedIn, "Dustin Welden, who has moved to Seattle-based Globys since March 2018 to work on a project that uses advanced technology to provide various accounting services, told CNBC.

According to the agency, blockchain engineer work requires skills in the field of network technologies, database design and cryptography. Also, specialists must be proficient in various programming languages ​ ​ such as Java, JavaScript, C++, Go, Solidity and Python.^[13]

Spain creates blockchain system to control wood supplies

In September 2018, it became known about the development by the Ministry of Agriculture, Fisheries and Food of Spain of blockchain technology for the development of the national forest industry. Read more here.

Blockchain in Tourism: Expectations and Prospects

Blockchain is at the peak of inflated expectations, according to the Gartner Technology Maturity Cycle study published in 2017. Is this really the case for the travel industry? Business architects Travelport (Travelport) analyzed the possibilities of applying blockchain both for the company's business and the industry as a whole.

Travelport finds out if there is a place for blockchain in tourism

As noted in Travelport, the tourism sector is largely based on trust in business partners and successfully copes with various kinds of difficulties thanks to strong relationships. Therefore, the company wondered: is there a place for blockchain technology? To answer it, Travelport specialists analyzed the applications of blockchain to attract customers and safely distribute and sell travel data. They also considered other possibilities for using the technology in the travel industry.

Areas of possible application of blockchain technologies

According to Travelport's forecast, in the short term, most new products based on blockchain technology will appear in closed groups of suppliers. They will be associated with private or controlled blockchains for the tourism sector. In the medium and long term, blockchain technologies or distributed databases can radically change the scope of payment processing, accounting and order management.

We allow the introduction of blockchain for travel management in general, air travel settlements and a combination of flights of different air carriers in the long term, and we expect further development of technology in these areas. Improving open blockchain standards in the travel industry and the readiness of travel agents to offer and sell content using distributed databases will be a factor in further development in these areas, says Gavin Teal, Managing Director of Travelport in Eastern Europe.

However, the main influence of blockchain technologies and distributed databases will be expressed in reducing processing time and increasing the efficiency of all processes, where several parties must transfer to each other and agree on the same data. As an example, we can include billing, mutual settlements, money transfers, agreement on the terms of contracts and identification of identity. Nowadays, Travelport customers solve many of these tasks manually with many checks and validations. A distributed database protected by blockchain will allow all parties to have the only true real-time version of the data, eliminating many existing verification processes.

Travelport specialists also identified blockchain prospects in tourism in the short, medium and long term.

Blockchain outlook in tourism

Using Blockchain in the Associated Press to Catch Plagiarists

In late August 2018, it became known that the Associated Press news agency began using blockchain to combat plagiarists. To do this, a collaboration was launched with the startup Civil Media. Read more here.

The European Union has created a partnership for the development of blockchain

More than 20 states European Union signed a declaration on the creation of a European partnership in the field of blockchain technologies on April 9, 2018, the press service of the European Commission said^[14]

"In order to use the capabilities of blockchain technologies and to avoid a fragmented approach, the participants in this declaration agree to cooperate in the creation of the European Partnership for the Development of Blockchain Infrastructure, which will help improve trustworthy and user-oriented digital services within the single market," the declaration says.

All project participants - 22 EU countries, will exchange knowledge and experience in the technical and regulatory sphere. Also, experts will prepare the launch of single applications for the European Union using distributed registry technology for the public and private sectors, PRIME agency reports.

As a result of the agreement, the first cross-border actions should take place at the end of 2019. Earlier it was reported that the European Commission will invest about 300 million euros in the development of blockchain technologies.

Use for cobalt supply monitoring

In February 2018, it became known that blockchain was first used to monitor the supply of cobalt from the mines of the Democratic Republic of the Congo to end products used in the production of smartphones and electric vehicles.

Agency sources Reuters with access to the pilot project say that as a result of lithium-ion batteries the introduction of the development, companies will be able to track the delivery of cobalt for production so that children do not mine metal.

Tracking cobalt supplies poses many challenges for producers because it requires monitoring quite a few mines and accounting for all intermediate players in the supply chain. At the same time, data has to be collected from remote areas of poor countries with high crime rates.

Woman separates cobalt from mud and rocks near Congo mine

In addition, companies are under increasing pressure from consumers and investors, who demand evidence that human rights were not violated in the supply of cobalt used by producers. The problem of child labor in the extraction of cobalt was dealt with by large Chinese producers (the main consumers of cobalt coming from the Congo mines), joined by such IT giants like Apple and Samsung.

Blockchain is already being used to monitor digital diamond prints from Africa's mines, but cobalt delivery is much harder to track. However, the authors of the initiative hope at the first stage to cover at least those stages of supplies at which violation of the law is most likely.

A representative of the committee dealing with this problem explained to the agency that cobalt production is of significant economic and political importance and, as a rule, limits the use of conventional technological solutions, but blockchain can make a difference.

By the beginning of February 2018, the blockchain system, designed to monitor the supply of cobalt from mines to final products, is used in a pilot mode. A full launch will take place during 2018.^[15]

2017

Fujitsu platform combines various blockchains to exchange cryptocurrencies

In November 2017, Fujitsu announced technology that combines various blockchain solutions to implement exchange transactions and payments within various cryptocurrencies. ConnectionChain is an extension of smart contract technology that allows different blockchain systems to interact by writing related transactions in each chain to a separate blockchain, or "connecting chain," combining the currency exchange process into a single transaction that can be automated. Read more here.

Australia to develop standards for blockchain

The International Organization of Standardization (ISO) decided that the International Technical Committee on the Development of Standards for Blockchain Technology (ISO/TC307) will be headed by Australia^[16]

The committee is tasked with developing effective standards solutions to promote system interoperability, privacy, risk, and to set the definition of security and blockchain terminology.

The Association of Australia for Standardization presented the "Blockchain Standards Roadmap," where it published the technology for building standards for blockchain.

The document also sets out the results of a study in which 100 respondents from government bodies, industry, the scientific field, research and consumer organizations took part. Those noted that they are attracted by the possibility of the government using blockchain to maintain registers in matters of property rights, medical documentation and identity identification.

It is planned that in the future, Canada, Great Britain USA France Korea and Estonia will join the development of standards for blockchain technology.

Cisco builds alliance to develop blockchain for IoT

At the end of January 2017, it became known about the creation of a new blockchain consortium, whose tasks include improving security and improving the use of the Internet of Things (IoT).

The organization, whose name was not announced, included Cisco, Bosch, Foxconn, Gemalto, bank BNY Mellon, as well as blockchain startups Consensus Systems, BitSE and Chronicled. Together, the companies will develop a secure information exchange protocol based on blockchain technology between all kinds of IoT devices (washing machines, transported containers, sensors, etc.), Reuters reports.

Cisco creates blockchain consortium tasked with improving security and IoT usage

As more types of devices gain access to the World Wide Web, the risk of hacking such equipment increases. The members of the new consortium united in order to secure the Internet interaction of IoT products.

Blockchain is able to increase stability and efficiency in a world connected to the Internet. To date, there is no solution that would give reliable anti-hacking guarantees for any legal documents, public information, dispute resolution and transactions based on paper documentation that is being used now, "said Alex Batlin, head of blockchain development at BNY Mellon.

We see huge potential in using blockchain for industrial purposes, "says Dirk Slama, head of Bosch Software Innovations. - We pursue the critical task of creating a secure registry of information about how products are manufactured, transported and maintained across complex networks by many stakeholders. This is necessary, for example, to ensure high quality products and protection against fakes.[17]

Notes