Blockchain and Smart Contracts

Blockchain Introduction

• Blockchain provides a global digital architecture that enables users to transact, access services, store information, and manage wealth without third-party intermediaries.
• Digital transactions were mainly done through bank accounts or credit cards before Blockchains.
• Banks require ownership of money and lend it to other customers.
• Credit cards charge interest and transaction fees and keep purchasing history.
• The blockchain ecosystem allows users to hold and leverage wealth in native currency and information, such as medical records or educational transcripts.
• Transactions can be undertaken with encrypted ledgers accessible only by permission.
• Companies can be granted access to spending habits for targeted advertising at a fee, without transferring data ownership or modification rights.

Smart Contracts

• Blockchains store not only information but also instructions through Smart Contracts.
• Smart Contracts define rules for data usage and transaction execution.
• Blockchains can transfer money based on stipulated rules, guaranteeing that funds will go to a digital wallet if certain conditions are met.
• This cannot be interfered with by any human being, actions to recover the funds may only be sought under legal ruling in the future.

Promise 1: Cutting Out the Middleman

• Blockchain technology facilitates the creation of digital ecosystems without the control of private companies or government agencies.
• The architecture enables trusted transactions and operations using cryptography.
• Using smart computer code for validation and distributed consensus secures the ledger by making it impossible to alter the data.
• Removing intermediaries reduces costs, speeds up processes, and ensures data access is controlled by the owner.
• The global economy's reliance on intermediaries may affect the adoption of blockchain solutions.

Promise 2: Giving People Control Over Their Data

• Blockchain entries are secured and validated by smart computer code and a consensus system.
• Data owners can digitally control access and usage through 'Smart Contracts.'
• Unlike systems that require data ownership for service access, Blockchain ecosystems let owners leverage data, such as personal information, for a price according to the established Smart Contract.

Promise 3: Secure and Trusted

• Blockchain data security is achieved using cryptography and data architecture.
• Data written into a block is secured using cryptography, creating a unique, encrypted digital signature called a hash.
• Linking blocks forms a chain where each new block's signature contains the signature of the previous block.
• The alteration of any previous block modifies subsequent blocks, and the affected host will be immediately removed from the consensus system, making the chain "Tamper Evident".

Promise 4: Saving Time and Money

• Blockchain can process transactions quickly by removing intermediaries and directly connecting parties.
• All participants in a supply chain can transact in a single trusted database that can host its own digital currency like the VeChain Blockchain, which was designed by the CIO of Louis Vuitton China to deal with counterfeit products.
• Contract terms can be automatically triggered, such as signing off on delivery to release payments.
• Detailed transaction records offer provenance and authenticity information for product validation and recall management.
• Manual reconciliations and verification are eliminated, reducing time, transaction fees, commissions, errors, and fraud.

How Blockchains Affect Individuals

• Blockchain promises to cut out the middleman, give data control, ensure security/trust, and save money/time.

Digital Transactions Becoming Quicker and Cheaper

• Blockchain provides a secure digital environment that removes the requirement for intermediary entities such as financial institutions.
• Blockchain payments are made directly from buyer to seller within the ecosystem, without banks or credit card companies.
• Data can be secured using cryptography with a 64-character identifier.
• Buyers can transact directly and avoid fees, maintaining verified proof of purchase.
• Transaction history can be securely stored, accessible only to approved entities.

Data Control and Leverage

• Blockchain allows a single, secure, validated, and auditable access point for records.
• Blockchain in healthcare can revolutionize medical record access and management, making this a reality in the Healthcare Sector.
• With AI, detailed data can identify patterns and provide personalized health recommendations and advice.
• This information can be cross-referenced across generations to identify and change health patterns.

White Papers

• A 'White Paper' is the first step when proposing a new Blockchain project.
• Satoshi Nakamoto's Bitcoin White Paper, released on October 31, 2008, outlined a global payment system design using smart computer code without financial institutions.
• The Bitcoin White Paper provided the digital architecture for the Bitcoin Blockchain.
• The Bitcoin White Paper communicated the design and use of the system in clear terms to programmers, investors and others.
• Blockchain White Papers provide details about the team, architecture, functionality, tokenomics, partners, and governance.
• A strong white paper attracts programmers, project developers, investors, and partners.

Key Points of Blockchain

• Blockchain offers a new opportunity for businesses to save costs, streamline processes, and drive innovation.
• The approach uses an encrypted digital ledger that is distributed and validated to avoid the need for trusting a central third party.
• The technology is in early stages, with an estimated 10% of Australians undertaking Blockchain-based transactions.
• Blockchains are like electricity in the 18th century, the internal combustion engine in the 19th century, and computers in the 20th century.
• Web 3.0 is a decentralized internet version that is not controlled by corporations or governments but rather provides a trusted digital ecosystem.
• Once we each own and control our data we can leverage this for our own benefit.
• Web 3.0 will run on Blockchains.
• Blockchain enables secure transactions, data and wealth storage without middlemen, instead using the data being recorded via computer code and validated by hosts.
• Bitcoin Blockchain holds nearly 20 million bitcoins worth $1.3 trillion in November 2021, it has not been hacked.
• New functionality is provided for users such as owning and controlling data, managing verified records, and accessing better services at lower costs.