Work in progress.
To create a new conceptual model for the use of blockchain, it is important to first identify the problem or challenge that needs to be solved. There may be a need to increase transparency and security in a supply chain, or a desire to create a faster and less costly payment system. Once the problem is identified, it is possible to explore the different existing blockchain technologies to see if one of them can be adapted to solve the problem.
If you want to create a secure electronic voting system, Ethereum might be a good choice as it offers smart contracts. It is then important to develop a deep understanding of the characteristics and limitations of the selected blockchain technology. For example, if you choose to use Bitcoin’s, it is important to be aware that transactions are irreversible and processing capacity is limited. Once the advantages and limitations of blockchain technology are understood, a system can be designed that uses appropriate features and functionalities to solve the identified problem. For example, an electronic voting system could be created that uses Ethereum’s blockchain and smart contracts to ensure that only authorized voters can vote and that votes are counted securely and transparently.
The next step is to validate the conceptual model by creating a prototype or proof of concept. This will allow you to test the system and identify any problems or improvements to be made before implementing it in production. Finally, it is important to continue testing and improving the model until it meets the predetermined requirements and goals. This may include adding new features, optimizing performance, and addressing any security issues. It is also important to consider the real-world uses of blockchain and use cases in order to choose the technology that best suits your industry and needs.
The rapid development of blockchain and its applications in the currency sector has made it necessary to put constraints on user interactions and rethink the way they are used. It is not enough to talk about distributed logic; a new conceptual model for reliable use of archives and applications must be constructed. At the moment, more and more experts and developers are working on this, and the only serious and sensible limit to its application is imagination.
Banks: crisis on the horizon?
A system that allows for money transactions without intermediaries represents a novelty but also a major threat to banks. Here’s how credit institutions are moving. A recent study conducted by Deloitte in collaboration with Efma (European Financial Management Association) analyzed the position of over 3,000 international operators with respect to the impact that Blockchain technology could have on the banking sector. The results show that 58% of operators are aware of the disruption that could soon hit credit institutions. 92% of banks have included offering blockchain-based financial products and services among the strategies to be implemented in the near future. 85% believe that this revolutionary technology will become dominant and widespread by 2020. In the meantime, only 29% have already launched concrete research and development initiatives, while 71% are in the process of learning about blockchain platforms and their mechanisms. Overall, for 60% of operators, the priority field of application will be that of payments and monetary transfers.
DeFi (or “decentralized finance”) is a general term used to refer to financial services executed on public blockchains, mainly on the Ethereum blockchain. Thanks to DeFi, the majority of operations supported by traditional banks can be carried out, such as earning interest, activating loans, lending, buying insurance policies, trading derivatives, trading resources, and more…with the difference that all of this happens more quickly and does not require documentation or the presence of third parties.
As with all cryptocurrency operations, DeFi is global, peer-to-peer (meaning transactions occur directly between two people without the intermediation of a centralized system), based on pseudonymity, and open to everyone. DeFi is based on the fundamental concept of Bitcoin’s digital currency and expands it further, creating a digital alternative to traditional stock market products but without the associated costs (think office skyscrapers, stock exchange halls, and banker salaries).
The DeFi system has the potential to create more open, free, and fair financial markets accessible to anyone with an internet connection. Users typically interact with DeFi services through decentralized software applications called DApps (short for “decentralized apps”), which mostly use the Ethereum blockchain. Unlike using a traditional bank’s service, using DeFi services does not require filling out an application or opening an account. This does not mean that the user of the service is anonymous; during registration, the user must still provide their documents, proof of residence, and proof of the source of funds.
Transactions will be pseudonymous, meaning that unlike with a wire transfer, for example, where all data is available to the entities involved, data regarding the transaction amount, the reason for it, and to whom it was executed, such as the balance of the accounts involved, will be encrypted. Pseudonymity protects our privacy, preventing our sensitive data from falling into the hands of large companies that profile our habits, creating billion-dollar businesses for their benefit and the benefit of the system that requires it.
What is happening in Italy.
“We are facing an innovation that presents great potential and has a strong impact. We cannot ignore it; it is essential to learn about it,” said Riccardo Motta, partner at Deloitte, referring to the dizzying worldwide rise of blockchain. “In Italy, only a few of the largest banking institutions have begun to study and experiment with this technology. Intesa Sanpaolo and UniCredit are the only ones to have joined R3 Cev, the American consortium of the 45 international big players in the sector.” The road is long: for our banks not to fall behind, they will have to hurry. It is also worth asking whether, if incorporated into banking products, blockchain technology will lose its nature as a tool that promotes freedom and privacy.