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Web3 and Blockchain
The introduction of Bitcoin brought to the world the coveted innovation of Blockchain. In the process of solving the key issues associated with the decentralized currency system, the author introduced a tamper evident data structure that came to be known as Blockchain. Blockchain data structure is essentially a chain of data blocks linked together by cryptography (a branch of mathematics) that guarantees the integrity, traceability (of each data block) and tamper-evidence of the entire chain. The figure below depicts a conceptual view of a Blockchain data structure.
While Bitcoin and cryptocurrency entered into the common vocabulary; the major impact of Bitcoin that impacted a wide swath of applications was Blockchain. Blockchain, by allowing a mechanism to transfer value in a frictionless manner through technology based trust as opposed to the use of a known trusted party facilitated by cryptography.
The legal, economic, political and social systems function based upon transactions governed by written contracts and their records. Integrity of the transactions requires accuracy, tamper proofing and transparency. In spite of the digital revolution, systems that manage inter-organizational transactions are highly prone to errors, fraud and lack of transparency. Blockchain solves the problem through the concept of Smart Contracts and enabling guaranteed verifiability of transactions based on the Smart Contract using Blockchain properties of verifiability and traceability without the bureaucracy, inefficiency, inaccuracies of the existing systems.
Refer to the schematic below to understand the impact of blockchain on a simple food supply chain.
The decentralization brought about by blockchain has given rise to Web3; the 3rd generation of the Internet. Web3 is characterized by the emergence of distributed applications (dApps). The dApps are applications where backend logic resides in a distributed blockchain network as a Smart Contract. dApps offer several benefits and similarly has some drawbacks over the traditional centralized applications where the backend logic is centralized. Security is one of key benefits due to dApps being based on Distributed Ledger Technology (DLT) i.e. every interaction is visible, guaranteed verifiable and subject to network consensus for acceptance. Traceability is another strength inherited from blockchain. Privacy is another strength as real world identities are not required. Visibility, and openness are other strengths as all parties can verify transactions and no party can prevent any user from using the application.
A few key drawbacks are performance, and maintenance of dApps that has spawned work in developing performant consensus mechanisms. The figure below depicts a generic architecture of dApp applications.
The Stacktics Full Stack development team conducts consultations with organizations to adapt Blockchain applications offering help to design, develop and deploy blockchain systems and dApps.
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