Blockchain Technology: Powering Transparent, Secure Digital Transactions, by Fom Gyem

Recently, at the National Students Security Summit 2022, the Minister of Communications and Digital Economy, Professor Isa Pantami reiterated the use of emerging technologies as veritable tools which Nigeria can capitalise on in combating insecurity and enhancing economic developments.

He stated that Emerging Technologies such as Artificial Intelligence, Blockchain, Cloud Computing, Quantum Computing, Augmented Reality, Internet of Things and Robotics are exponentially growing and finding new applications in an ever-increasing number of sectors, including the way people receive, exchange and process information for security activities.

Blockchain and other emerging technogies as the next available options can help reduce the scourge of insecurity and enhance economic development in the Nigeria.

Blockchain is a shared, immutable ledger that makes it easier to record transactions and track assets in a business network. An asset can be either tangible (such as a house, car, cash, or land) or intangible (intellectual property, patents, copyrights, branding).

On a blockchain network, virtually anything of value can be tracked and traced, lowering risks and costs for all parties involved. This technology enables cryptocurrencies (digital currencies secured by cryptography) such as Bitcoin to function in the same way that the internet enables email.

Blockchain is more than just a database. It is a new technology stacked with ‘digital trust’ that is revolutionizing the way we exchange value and information across the internet by eliminating the ‘gatekeepers’.

The technology is ideal for delivering information because it provides immediate, shared, and completely transparent information stored on an unalterable ledger that can be accessed only by permitted network members.

A blockchain network can track orders, payments, accounts, production, and much more. And because members share a single view of the truth, you can see all details of a transaction end to end-to-end.

Fraud and cyberattacks can exploit record-keeping systems. Data verification can be slowed by a lack of transparency. And, with the advent of IoT, transaction volumes have skyrocketed. All of this slows business and depletes the bottom line, implying that we require a better solution.

As a member of a members-only network, you can trust that you will receive accurate and timely data from the blockchain and that your confidential blockchain records will be shared only with network members to whom you have specifically authorized access.

All network participants must agree on data accuracy, and all confirmed transactions are sacrosanct because they are permanently recorded. A transaction cannot be deleted by anyone, not even the system administrator.

The technology is going to change the world around us. So, we have to understand what it has to offer.

Blockchain is a network that runs on nodes. The blockchain’s quality is determined by the quality of the nodes. Bitcoin’s blockchain, for example, is robust and encourages nodes to join the network.

The same cannot be said for a blockchain network in which nodes are not compensated. This indicates that it is not a distributed computing system in which the network is not reliant on the nodes’ activity and cooperation.

A distributed computing system, on the other hand, works to ensure that transactions are verified according to the rules, that they are recorded, and that they have the transactional history for each transaction. Each of these actions is analogous to the blockchain, but none of them have the same level of synergy, mutual help, or parallel.

However, while blockchain is a distributed network, it lacks the characteristics that make a distributed computing system so advantageous to businesses. Unlike their centralized counterparts, blockchains are not scalable.

If you have ever used the Bitcoin network, you are aware that transactions are delayed due to network congestion. This issue stems from blockchain network scalability issues. To put it another way, the more people or nodes that join the network, the greater the likelihood of it slowing down!

The way blockchain technology works, on the other hand, is changing at a rapid pace. Scalability alternatives are also being incorporated with the Bitcoin network, thanks to the appropriate progression of technology. The solution is to conduct transactions outside of the blockchain and only store and access data on the blockchain.

One of the blockchain’s most significant drawbacks has always been data immutability. Multiple systems, such as supply chains, financial systems, and so on, clearly benefit from it. However, if you think about how networks work, you will see that immutability can only exist if network nodes are dispersed evenly.

For instance, if an entity owns 50 percent or more of the nodes in a blockchain network, that entity can control it, making it susceptible. It also has the issue of data that cannot be erased after it has been written. The right to privacy is guaranteed to everyone on the planet. If the same person uses a digital platform based on blockchain technology, however, he will be unable to delete the trail from the system when he no longer wishes it to be there.

In other words, he will never be able to completely erase his traces, therefore jeopardizing his private rights.

It is difficult to implement and manage a blockchain project. Going through the entire procedure necessitates a deep understanding of the business. They must recruit various experts in the blockchain industry, which creates an issue and is thus considered one of the blockchain downsides.

They must hire a large number of professionals in the blockchain industry, which creates a problem and is thus considered one of the blockchain’s downsides. Not only that, but they must also train their current employees on how to use blockchain, as well as guarantee that the management team comprehends the complexity and results of a blockchain-based firm.

In comparison to the initial generation of blockchain technology, there are newer blockchain solutions that provide superior solutions.

For example, Ethereum addressed inefficiencies by migrating to a more advanced blockchain technology solution that includes smart contracts for automation. It also implemented Proof-of-Stake (PoS), which is more efficient than Proof-of-Work (PoW).

There is also Hyperledger, an open-source movement spearheaded by The Linux Foundation to bring all blockchain technologies under one roof.

This will make it easier for businesses to implement blockchain technologies, such as frameworks, tools, and Application Programming Interfaces (APIs).

Fom Gyem writes from Wuye District Abuja

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