Review: Mercury Rising - A New Paradigm in Blockchain Technology
Unveiling SUI: A New Paradigm in Blockchain Technology
In this podcast episode, join us as we dive into the exciting world of SUI, a groundbreaking layer-1 blockchain that recently launched its mainnet (podcast episode was recorded 2 days after launch).
During the past years arising technologies and globalization have forced institutions and companies dealing within different challenges of digitalization. Systems and applications have become more complex and interconnected, setting a difficult problem for the current legacy systems and applications.
With the invention of Bitcoin in 2008 by a person or group of people known by pseudonym “Satoshi Nakamoto”, a solution to the challenges of globalization and digitalization was introduced to the world (Bashir 2018). Not Bitcoin as a cryptocurrency by itself, but the system Bitcoin is based on: blockchain technique. This new technology promises to radically alter the existing paradigms of nearly all industries including IT, finance, government, media, medical, energy and law as the most important ones (Bashir 2018, p. 8). The topic of this seminar paper is to elaborate the revolutionary implications of blockchain on different sectors and to glance at possible future aspects of blockchain’s potentials setting a new paradigm.
2. Blockchain Overview
So what is blockchain all about? Let us have a look at the key elements and why this is likely to become a game changer.
2.1 Distributed Power
Blockchain is a public decentralized ledger platform (Evans 2014). Across a peer-to- peer network, it distributes power with no single point of control (Tapscott 2018, p. 33) and can simplify the current paradigm which is the disparate nature of the systems. Blockchain reduces the complexity of managing separate systems because as a distributed ledger where information is updated automatically, it can be used by all parties during the same time.
Consequently, keeping lots of separate systems up to date and synchronized between each other is not needed due to the concurrent use of the same ledger with the same information. This implicates that blockchain structures disorganized systems which makes them significantly more efficient and incorruptible, because no centralized version of this information exists for hackers to corrupt. The revolutionary effect of such a distributed ledger can be applied to disrupt any centralized system that coordinates valuable information (Wright and De Filippi 2015).
2.2 Paradigm Shift
Blockchain is a disruptive, innovative technology (Swan 2015; Wiles 2015; Pilkington 2016) whose core benefit and service is providing decentralization (Bashir 2018, p.42). This general service of blockchain will lead to a paradigm shift from the current paradigm of centralized systems to the new paradigm of decentralization as shown in figure 1. Combined with the objective of working out the paradigm shift, figure 1 is applied, which presents a transaction example between two parties.
Figure 1: Paradigm Shift
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The most efficient structure to create, establish and enforce rules is centralization at the beginning which minimizes duplication and implements clear hierarchy (Davidson, De Filippi, & Potts 2016). The current paradigm is the reliance on a third-party intermediary like PayPal, Visa or Mastercard. There is no possibility for two parties of acting directly with each other because central systems like banks and intermediaries are placed between. In the current paradigm intermediaries are a necessary entity because of their responsibility of transferring money from one bank to another bank. Banks are also essential because they provide the movement and production of capital and the operation of the payments system. They can be seen as a centralized ledger of transactions matching savers with borrowers and intermediating on two sides of the market.
Blockchain is about to disrupt this intermediation by matching two parties directly which leads to the new paradigm. It is characterized in the redundancy of a trusted third party and in the reliance on blockchain for peer-to-peer or business-to-business transactions. Enabled by blockchain as a peer-to-peer electronic cash system based on cryptographic proof instead of trust, any two willing parties can directly transact with each other (Catalini & Gans 2017, p.l). Conceptually it is possible of placing blockchains alongside markets, as an open platform technology performing this decentralization service (Potts 2001). According to Vitalik Buterin, blockchains as decentralized systems are converging on being a ‘world computer’ (Wood 2015) meaning the idea that any application running on such a platform will be global in reach.
Because of this new decentralized opportunity through technological enablement, there are a lot of options and benefits through Blockchain which will be explained in the next abstract
3. Sample Use Cases on blockchain
Integrating blockchain technology into business is about shifting the common approach of centralization and addressing the organizational and business challenges of digitalization through a standard peer-to-peer or business-to-business architecture. This challenge is being faced by Hyperledger.
Hyperledger is a cross-industry collaboration founded by the Linux Foundation in December 2015. It includes companies ranging from the IT sector to the mobility technology sector over financial industries to blockchain start-ups such as Daimler, IBM, JP Morgan and Blockstream. Hyperledger is not just a single blockchain. It is a platform for blockchain based solutions and provides a framework for companies to build up their own blockchain relying on smart contracts. One of the first applications on Hyperledger is Rdw.
Rdw is a road transport initiative and it has developed a blockchain solution for bicycles in the Netherlands. The concept behind Rdw is that information about the bicycle are being saved in the blockchain and most important the ownership.
4. Conclusion
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