Apr 1, 2021
Blockchain and the Internet of Value
Before we proceed into the technical details of a blockchain, it only looks apt to discuss the advantages of Blockchain. It would help us develop an appreciation for the technology as well as understand it better.
As it happens, the technology behind world’s best faring cryptocurrency can actually be used for so much more than just cryptocurrencies. From transacting money to certificates, intellectual property rights, legal papers and almost anything of financial or social importance, Blockchain can take it all. Blockchain is not just another tool. It is rather a foundation on which a new form of internet would be born, the Internet of Value. Thus, good people, we are in the midst of an internet revolution. So brace up and hold tight.
Internet of Value
The Internet of Value is a concept that was popularized by Ripple. The concept of Internet of Value is an internet tailored particularly for transfer of money or assets digitally. It proposes to create a global economy where assets can be transferred just as easily as messages are.
It is in contrast to the common internet we use which is called the Internet of Information. The Internet of Information is suited only for transfer of information. Even transactions carried out are in the form of information packets, or a more secure information packet.
We will explain how it is different to transact over Internet of Information and Internet of Value.
On Internet of Information, when a transaction occurs, a request packet is sent to the Bank server with information on how much amount from which account and to which account is to be transferred. The bank then verifies the transaction and all the background stuff (the actual transaction on ledgers) happens behind the scenes between banks. Another information packet is received by the receiver’s Bank to notify the credit to the recipient. Thus the actual transfer happened behind the scenes.
On Internet of Value, the actual transaction would happen on the internet instead of information packets. The sender initiates a transaction towards a receiver. The network now holds the unverified transaction record till a miner or verifier notices it. The verifier verifies the transaction and comes for a consensus with all other participants of the network. When most of them have agreed, the transaction is written on a digital ledger that is again distributed among all participants on the network. When the ledger is updated, the recipient party receives the money on his account. As you might have observed, there were no background activities included or Banks involved. Non-involvement of Banks means the economy is no more limited to a certain country.
It is however possible in the Internet of Value to create privatized networks that would limit the transactions to a certain region, country or group of people. But the idea of a more secure network and faster transaction speeds would still remain the same.
The Internet of Value also ensures transfers happen without any processing fee by any third party. Though it is still customary in Blockchains to tip the Miner some amount, it is never compulsory.
How does Blockchain help Internet of Value?
Blockchain, like Linux is a framework that can be modified to achieve different goals. Blockchains can be tailored for transaction speed, enhanced security and efficient Proof protocols. Currently there are different versions of Blockchain like the Ethereum blockchain and the Ripple Blockchain solution.
All different versions of Blockchains however, follow 7 core principles:
1. Integrity or Immutability by Design*
2. Distributed Power or Control
3. Value as Incentive
4. Security by Design*
5. Privacy by Design*
6. Rights Reserved
7. Inclusion
*By Design means that the features are integral part of the Blockchain and not served as Add-ons.
Blockchain provides for the foundation on which Internet of Value can be built. Blockchain already provides for a safe, secure, decentralized and globally inclusive medium for asset transfer. The only lacking is, there are multitudes of Blockchains operating simultaneously and independently all over the world. Connecting multiple Blockchains and integrating them could create a worldwide network for transferring assets or, the Internet of Value.
As it might have been clear now, blockchain is no more confined to the arenas of Bitcoin or Cryptocurrency. It has grown into a much larger base to accommodate a whole new form of Internet for Asset transfer. With the advent of Internet of Value, most of our legal work, medical records, property documents, Intellectual Property Rights, Graduation records, etc would be verifiable and maintained on online registries. Verifying data and records could be improved drastically and the immutability of records would always be ensured.
Maybe the Internet of Value is a bit hard to come by, but it ain’t very far.
