Blockchain Technology is the Next Wave of Disruption

Blockchain, P2P and Decentralised Ledger Technologies are Changing and Disrupting Whole Industry Models Including Banking, Insurance, Data and Media. Within the nex 5-10 Years Industry Incumbents will risk being disintermediated by blockchain startups with new transactional models.

Blockchain the Next Disruptor of Traditional Industries

At Kapitalized we believe that Blockchain in conjunction with Internet of Things, Augmented Reality, Big Data and Peer to Peer technologies will be the lead the biggest disruption of traditional industries such as banking, insurance, global trade, media and healthcare.

What is Blockchain?

The blockchain is the basis for Bitcoin’s underlying technology, developed by a person or group of people known by the pseudonym, Satoshi Nakamoto. By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet based transaction. Originally devised for the digital currency, Bitcoin, uses are being found everyday to supplant traditional transaction and data storage industries. Bitcoin, the total value of the currency is close to US$270 billion (as at December 2017).

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”

Information held on a blockchain exists as a shared and continously reconciled database. The blockchain database isn’t stored in any single location, but in multiple synchronous computers, meaning the records it keeps are both public and verifiable. No centralized version of this information exists for a hacker to corrupt.

By storing blocks of information that are identical across its network, the blockchain cannot:

  • Be controlled by any single entity.
  • Has no single point of failure.

Other Emerging Blockchain Technologies

LAYER 2 BLOCKCHAIN

Layer 2 blockchain services like the Lightning Network and Raiden. These are services built on top of current blockchains to offer instant transactions with no fees.

 

Raiden Network

Raiden is a network of nodes. Nodes establish payment channels to other nodes. A payment is routed through the network via multiple nodes, but each node only communicates with its direct neighbours. Each node has to hold the balance for the amount being moved. That’s why it will be hard to find a path through the network to move 1000 Ether because every node will have to hold that balance. Used for transferring small amounts of Ether and ERC20 tokens almost instantly and reliably.

 

Plasma

Plasma aims to scale transactions by creating side chains that only interact with the main chain every once in a while. Plasma chains can even be nested (yeah, like Inception). Plasma is being actively developed by OmiseGo. In terms of fees and latency Plasma is probably inferior to Raiden, but it has a wider use case. Plasma chains need to be secured by “fraud proofs”.

 

TANGLE

Tangle is the distributed ledger of a cryptocurrency called IOTA. IOTA is designed to be the cryptocurrency for the growing “Internet of Things”. IOTA is lightweight (requires few resources), highly scalable, resistant to quantum computing attacks, and based on a type of ledger that is different from the “blockchain” used by other cryptocurrencies. IOTA has no mining, no blocks, and no transaction fees.