Moving away from the spotlight of ICOs, Coins, Tokens and the tradable market reveals a facet of the blockchain that comes with some of the greatest rewards. We have mentioned earlier the idea of a Distributed Ledger, and the technology that comes with it (DLT). Decentralised Apps (DApps) thrive in this environment, and the idea behind these DApps usually addresses the issues of trustless and public transactions.
In scenarios where there is a need for added security, whether in the case of the privacy of the transaction or on the level of permission required for the asset transfer (property transfer for example) then the need for a publicly traded coin or token is no longer required. Using smart contracts consensus can be reached without the need for mining, coin or token transfer. Once example is Fabric, which does allow for a coin or token to exist on its blockchain it does not require it. Instead of Proof of Work for consensus, multiple roles are assigned during the creation of a smart contract denoting the clients, endorsers, orderers and peers. It is only when all endorsers reach consensus and subsequently, all orderers reach consensus is the transaction submitted to the peers for updating in the ledger.
Highly Regulated Markets
require Trust and Privacy
The above example creates an extremely controlled scenario which in the case of certain transfers might be required. Another example would be Corda which is a DLT developed by a coming together of a number of major banks and financial institutions. The power behind Corda, similar to Fabric, is that it is not a completely trustless DLT, and in fact, it does not intrinsically support the use of Coins or Tokens. What it does rely on is the trust provided by the endorsers who in most cases will be individuals or institutions with the power of endorsement (banks, notaries, government departments…). One unique feature of Corda and one we will be looking into in more detail in the next chapter is the ability to incorporate legal prose, thus making them smart legal contracts which have huge implications in the highly regulated markets like Financial Services, Real Estate, Health etc…
Continue Reading about blockchain:
- What is Blockchain?
- Why is Blockchain Important?
- What is a Crypto Currency?
- What is an ICO?
- Are Cryptocurrencies and Tokens the same?
- Can Blockchain be used without a Coin or Token?
- Blockchain in Use (Real Estate)
- Will Blockchain replace banks? (Part 1 – Banking and Finance)
- Will Blockchain replace banks? (Part 2 – Blockchain Adoption)
- What is Distributed Ledger Technology? (Coming Soon)
- What is the future of Blockchain? (Coming Soon)
If you want to learn more about Blockchain Technology, Cryptocurrencies, ICOs, Distributed Ledgers, Smart Contracts or other fields related to the technologies, contact me using the contact page, or leave a comment below.
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