{"id":2188,"date":"2020-01-10T00:59:32","date_gmt":"2020-01-10T00:59:32","guid":{"rendered":"http:\/\/kusuaks7\/?p=1793"},"modified":"2024-01-29T09:55:09","modified_gmt":"2024-01-29T09:55:09","slug":"blockchain-to-valuechain","status":"publish","type":"post","link":"https:\/\/www.experfy.com\/blog\/fintech\/blockchain-to-valuechain\/","title":{"rendered":"Blockchain to Valuechain"},"content":{"rendered":"\t\t
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\n\t\t\t\t\t\t\t\t\tThe decentralized ledger technology underlying cryptocurrencies \u2013\u00a0Blockchain<\/a>\u00a0\u2013 is becoming a defacto solution for many peer-to-peer applications. There are plenty of books and articles describing the underlying algorithms and technologies of \u201cBlocks\u201d and their hash-based \u201cchaining.\u201d\u00a0And yes, there is some confusion as to exactly what is Blockchain!\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tWe will not cover yet another tutorial on Blockchain. The\u00a0Wikipedia<\/a>\u00a0entry is quite good. Also one of the best books that I have read on Blockchain is the\u00a0Blockchain Revolution<\/em><\/a>\u00a0by Tapscott & Tapscott (the author of\u00a0Wikinomics<\/em><\/a>).\u00a0<\/em>If you are a novice in Blockchain, this will be a great place to start.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tThere are many cryptocurrencies and in the recent few years we saw an explosion of cryptocurrency offerings.\u00a0Coinmarketcap<\/a>\u00a0ranks the top 100 cryptocurrencies with market capitalization. Some of the popular ones include\u00a0Bitcoin<\/a>,\u00a0Ehtereum<\/a>, and\u00a0Ripple<\/a>. Now, the Blockchain implementations for each of these cryptocurrencies is different. There is no one single \u201cBlockchain.\u201d The algorithms and implementations for block validation (called \u201cmining<\/a>\u201d in the cryptocurrency world) are different. In addition to the peer-to-peer decentralized and disintermediated recording of transactions, Blockchains also execute\u00a0Smart Contracts<\/a>.\u00a0Smart contracts are the rules and mutual agreements between parties that get executed in the Blockchain.<\/em>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tHow? Well there are specific languages that capture the business rules and business contractual logic. The smart contract programs get compiled into the virtual machine code of the cryptocurrency and execute in its Blockchain. The smart contract language will have its own syntax and semantics and there could be substantive differences among\u00a0the smart contract languages – with respect to the richness of the execution model, speed, reliability and security of contract executions. Two of the more popular ones include\u00a0Ethereum\u2019s Solidity<\/a>\u00a0and a new and exciting Smart\u00a0Contract language called\u00a0Rholang, pertaining to\u00a0RChain<\/a>\u00a0. Rholang is still in development by the\u00a0RChain Coop<\/a>\u00a0and is planned to go prime time by the end of 2018. The interesting aspect of Rholang is that the execution semantics is a variant of\u00a0Pi Calculus<\/a>\u00a0– the same calculus that underpinned the\u00a0Business Process\u00a0Execution Language\u00a0BPEL<\/a>\u00a0a few years ago! In Rholang, processes can\u00a0send and receive messages<\/a>\u00a0on named channels \u2013 such as \u201cAddress.\u201d\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Internet of Value<\/strong><\/h3><\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tBlockchain is very much a revolution. It is the engine that empowers the emergence of the\u00a0Internet of Value<\/em>. Ripple\u2019s description of\u00a0Internet of Value<\/a>\u00a0is quite good: \u201cvalue to be exchanged as quickly as information.\u201d The speed of the exchange of value has tremendous implications in many applications: for consumers, industries, and governments. It is not just monetary value. As noted above Blockchains can also execute business logic through Smart Contracts.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tSo we have the\u00a0Internet of Information\u00a0<\/em>(the more traditional Internet \u2013 the one we use every day searching for information), the\u00a0Internet of Things<\/em><\/a>\u00a0or connected devices that are becoming pervasive, and now the\u00a0Internet of Value<\/em>. Through peer-to-peer transactions without intermediaries Blockchain technology is allowing individuals as well as organizations easily exchange digital money and execute business contracts between trading partners. To understand the\u00a0economic value\u00a0<\/em>of Blockchain a good reading is the 2017 article on the\u00a0Blockchain economy<\/a>\u00a0that concludes as follows: \u201cThe blockchain and associated technological changes will massively disrupt current economic conditions. The industrial revolution ushered in a world where business models were predicated on hierarchy and financial capitalism. The blockchain revolution will see an economy dominated by human capitalism and greater individual autonomy.\u201d\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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IoT\/IIoT and Blockchain<\/strong><\/h3><\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tThere is a close affinity between Blockchain and IoT\/IIoT. The potential of increasingly intelligent connected devices exchanging value peer-to-peer either autonomously or semi-autonomously is huge. However, it could run into formidable execution challenges with some Blockchain implementations \u2013 such as\u00a0Proof of Work<\/a>\u00a0– that are relatively slow and quite wasteful. Consumer IoT \u2013 that is becoming pervasive in connected homes\u2013 and Industrial IoT \u2013 in process and discrete manufacturing – will involve billions of connected devices. Some of these devices will be small and tiny. Others will be large robots and turbo engines. There are many conflicting predictions on the number of connected devices or Things. The \u201ctraditional\u201d Cisco number was\u00a050 billion devices by 2020<\/a>\u00a0but I have seen numbers as high as 200 billion and even a trillion devices by then. In other words, many! With the complexity of Blockchain validation , there are those who are skeptical about peer-to-peer IoT transactions using at least some of the current state of the art Blockchain technologies. More importantly, there are also Blockchain transaction fees and these could be prohibitive for IoT\/IIoT. For these reasons \u2013 scale and transaction fees \u2013 we are seeing the emergence of a number of alternative solutions targeting specifically IoT\/IIoT transactions.\u00a0IOTA<\/a>\u00a0for instance does not have a transaction fee and has its own distributed ledger implementation \u2013 called Tangle \u2013 that claims to provide a more scalable architecture for IoT.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Valuechains<\/strong><\/h3><\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tWhich brings us to Valuechains. The original definition from\u00a0Michael Porter<\/a>\u00a0defines a Valuechain as \u201ca chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market.\u201d It does not have to be a \u201cfirm.\u201d The same concept applies to consumers or any entity that is delivering value.\u00a0The operating word is\u00a0value.\u00a0<\/em>A Valuechain (aka\u00a0Valuestream<\/a>) therefore is an end-to-end business process that orchestrates participants who could be: people, business units, trading partners and often enterprise legacy applications and\u00a0connected devices<\/a>\u00a0(IoT\/IIoT).\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tTo illustrate the relationship of Valuechains to Blockchains and IoT\/IIoT, consider this high level three-tier architecture. With connected devices and the increasingly central role of automation especially through a Digital Transformation (DX) platform that supports\u00a0Digital Process Automation<\/a>\u00a0(next generation BPM), a robust pattern is emerging:\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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