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A detailed history of blockchain: From the Establishment to Broad Adoption

A detailed history of blockchain From the Establishment to Broad Adoption

Blockchain has gotten an ample amount of appreciation in the most recent couple of years, with the potential to come across as an extraordinary power to transform businesses. Blockchain technology is a computerized record of an action that is copied and conveyed across the whole organization of the blockchain platform through computer networks. Sounds confusing, isn’t it? Truth to be told, Blockchain is much easier to understand than the above description.

For understanding the concept, it is feasible to look back at its historical background and learn about its origin to significant turns of events and innovations. Bits of knowledge into the background of Blockchain will assist us with addressing these queries like the exact meaning of the term,  working environment, problems it can solve, and where it can be implemented. All these insights will help us to place the right expectations for its future.

Table of content

  • What exactly is Blockchain?
  • When did the Blockchain first appear?
  • Who is behind blockchain technology?
  • How is Blockchain created?
  • Identifying a suitable Use-case
  • Selection of Suitable Consensus protocol
  • selection of a suitable platform
  • Node designing
  • Designing the Blockchain parameter configuration
  • APIs
  • Building admin and user Interfaces
  • Adding smart technology
  • Closing Thoughts.

What exactly is Blockchain?

A blockchain is a disseminated network that comprises computer systems associated with the Internet, which all together keep the account of transactions. In the Blockchain, one record is dispersed and protected across the system. Each computer in the group approves the exchanges. However, nobody has power over the network, not like various clients functioning in a centralized network. 

A blockchain incorporates a sequence of blocks, which are information units used to store value-based data of the organization. To add a block into a blockchain, these steps ought to occur:

  • When an exchange is performed, then it should be confirmed by a group of computer networks. The exchange should be compiled in a block; after getting approval from the network group. The digital signature of the sender and the receiver and the dollar’s value has to be stored in a block. 
  • A block should be given a hash to separate it from different blocks. This block additionally contains data of the hash of the newest added block into a blockchain. When hashed, this block can be put into the Blockchain.
  • After the inclusion of a new block in the Blockchain, the complete information of this exchange will be public, and any user in the network can explore this exchange data, for example, who sent it? Who received it? Who added this exchange to the block? When did the exchange occur? And so on. The information is apparent and auditable yet not editable.

A block is only digital data. A “chain” is characterized as a common information base. In this way, when we say Blockchain – we intend to discuss the digital data which is kept in a public data set.

When did Blockchain first appear? 

The very first appearance of Blockchain was seen in 2008. It was introduced by an individual named ‘Satoshi Nakamoto.’ Nakamoto improved the blockchain structure effectively, utilizing a Hashcash-like strategy to keep records of time and date of added blocks without expecting them to be endorsed by a central party and embedding boundaries to balance out the rate at which blocks were to be added to the chain. Next year, this blockchain structure was recognized as a central part of the cryptocurrency bitcoin, where it acts as the public record for all exchanges carried on the network. 

In August of 2014, the size of stored records of all exchanges that have happened on the bitcoin blockchain network filled up to 20 GB. In January 2015, the size had reached nearly 30 GB. This size expanded from 50 GB to 100 GB between January 2016 to 2017. While reaching halfway to 2020, this record size exceeded 200 GiB.

Who is behind Blockchain technology?

It is essential to learn about the historical background of Blockchain for Blockchain supporters and Blockchain prospects. Thus, to help readers to comprehend the Blockchain advancement, let us learn the  history of this technology:

1991-2008: Creation Period of  Blockchain Technology

Blockchain emerged in 1991  when W. Scott Stornetta and Stuart Haber deliberated what the world has come to know as a “Blockchain.” Their early work included shaping a cryptographically secured blockchain where nobody could alter timestamps of records. 

In 1992, they updated their technique to consolidate Merkle trees that improved proficiency hence providing the assortment of more reports on a solitary block. Nonetheless, in 2008, the term “Blockchain” began to acquire importance when Satoshi Nakamoto ingrained his idea of Blockchain in the blockchain space. 

Satoshi Nakamoto is credited as the master of blockchain innovation. There is not much knowledge about Nakamoto as individuals speculate he could be a single person or a group that molded Bitcoin, the primary application of digital roster technology.

How is a Blockchain created?

Here are steps that are needed to create a blockchain:

Step 1: Identifying a suitable Use-case

There are three use-cases where blockchains do very well:

  • Data Authentication and Verification: It focuses on encryption, inflexible storage and digital signatures, creation of private and public keys, and verifying digital signatures.  
  • Smart Asset Management: This focuses on disbursement, revenue, trade, bond, and retirement. In crypto, real-world properties are represented in the form of a token, for example, land, infrastructure, gold, silver, oil.
  • Smart Contracts: This focuses on trade between dealer and buyer with smart contracts.

Step 2: Selection of Suitable Consensus Protocol

Depending on your requirements, you need to choose the right consensus protocol among:

  • Deposit based consensus
  • Proof of stake
  • Delegated Proof of Stake.
  • Derived PBFT
  • Byzantine fault-tolerant
  •  Federated Byzantine Agreement
  • Redundant Byzantine Fault Tolerance
  • Federated consensus
  • Proof of Elapsed Time
  • Simplified Byzantine Fault Tolerance
  •  Round Robin

Step 3: Selection of a Blockchain Platform

This depends on your choice of consensus protocol. Many of them are cost-free and open source. Here are some examples:

Ethereum, Hyperledger Fabric, Quorum,
HydraChain, Stellar, Hyperledger Iroha,
Open chain, Hyperledger Sawtooth Lake, and many more.

Step 4: Node designing

Blockchain systems can be designed as private/public,  permission-less as well as with permission, or even hybrid. 

Another important factor to be considered at this step is whether the nodes are running on-premise or in the cloud. Also, the selection of operating systems and tasks related to hardware configuration such as processors, and memory and disk size is to be done in this step. 

Step 5: Designing the Blockchain Parameter Configuration

Usually, blockchain platforms require a thoroughly plotted configuration for elements like permissions, atomic trades, key management, asset issuance, multiple signatures, address formats, hand-shaking, etc.

Step 6: APIs

Most platforms offer pre-built APIs, while others don’t. The issues that you’ll need APIs for are: 

  • For developing keys and addresses.
  • Conducting auditable processes.
  • Performing data verification by using hash and digital signatures.
  • For holding data and its recovery.
  • Managing smart-asset, I.e., distribution, bond, donations, business, etc.
  • Creating smart contracts.

Step 7: Building admin and user Interfaces

At this step, you’ll select the programming languages. You’ll also have to pick external databases and servers.

Step 8: Adding smart technology 

Boost the potential of your Blockchain solution with the addition of Artificial Intelligence (AI), cloud, data analytics, biometrics, machine learning, and bots.

Closing Thoughts

The Blockchain provides amazing advancements in security, decentralization, transparency, and unchangeable data. These qualities make it a perfect tool for future applications. 

It has marked its territory in many industries, and many more yet have to embed it.

Learn more about blockchain technology and take up a suitable blockchain course at Blockchain Council.

A detailed history of blockchain: From the Establishment to Broad Adoption

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US Financial Watchdogs Moving Towards Robust Regulatory Framework

Financial watchdogs around the world have been making great efforts to identify loopholes in the crypto market, with the aim of developing a robust regulatory framework. The US authorities have also been brainstorming on the best strategies that can be adopted to protect investors and make the crypto sector safe for everyone.

The US Federal Reserve Chief, Jerome Powell, recently made remarks about how cryptocurrencies were posing a risk to financial stability. To curb this, more regulations needed to be implemented especially in the light of this year’s frenzied popularity of cryptocurrencies.

In addition, the US Treasury also expressed concerns about wealthy individuals turning to cryptocurrencies to avoid taxation. To address this, the Treasury has proposed that crypto exchange firms in the US report large transfers to the relevant regulators.

Speaking to the Financial Times this week Michael Hsu, the acting comptroller of the currency, said that he was hopefully expecting US officials from the various regulatory bodies to come together to create what he described as a “regulatory perimeter” for crypto.

Critical Time for Regulations

The regulatory proposals come at a time when Bitcoin is experiencing wild price movements. The currency lost nearly 50% of its value in May when the token crashed to almost $30,000 after hitting an ATH of $63,500 in April.

Jerome Powell relayed his concerns about cryptocurrencies and the threat they posed to financial stability. He also expressed guarded support in the Federal Reserve exploring the launch of its own digital fiat, that might mark a significant step in the US creating a central bank digital currency. Powell also expressed worry about how crypto innovations were risky to both investors and the entire financial sector.

The remarks by Powell show that the Federal Reserve has been looking at ways they can deal with the popularity of cryptocurrencies and their affect on traditional financial models. Creating a comprehensive framework for the crypto industry would lay the ground for launching the CBDC.

Bitcoin Chart 1 June

Not Actual Assets

The Federal Reserve and the Treasury have been considering how to regulate crypto for some time but have been moving slowly. Now they appear to be worrying that the industry could get too big for them to regulate properly unless they start to get serious.

The question of whether to regulate crypto is a different one to whether crypto has intrinsic value. However, even after the market cap of cryptocurrencies reached $2.6 trillion in May, the two agencies remain unconvinced that cryptocurrencies have a great value. The authorities still view the tokens as art, gold, and other assets solely used for speculation.

However, the Federal Reserve believes that a CBDC is a safer tool as a holder has a claim to the central bank, which is similar to paper currencies. Powell also stated that regulators would release a discussion paper within the summer talking about digital currencies as well as the benefits and risks that these tokens have. The relevant stakeholders would also seek public participation in the matter.

With the tough regulatory framework looming in the US crypto sector, it means that cryptocurrencies should be ready for substantial change, although there may be lengthy deliberations before the rules are definitively put in place. While the change may be difficult at first, it will ultimately be beneficial for the market in ending uncertainty and setting up clear rules of the road for all market and ecosystem participants.

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US Financial Watchdogs Moving Towards Robust Regulatory Framework

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How Blockchain and Sound-Based Technology Protect Digital Payment Systems

How Blockchain and Sound-Based Technology Protect Digital Payment Systems

Wondering what role does Blockchain and other related technologies play in protecting digital payment systems. You have landed on the right page. This article talks about the rise of digital payments, associated risks, and how Blockchain and sound-based technology protect digital payments.

Table of Contents 

  • Digital Payments on the Rise
  • What are the Associated Risks?
  • Blockchain and Sound-based Technology: A Smart Combination of Technologies
  • Concluding Lines 

Digital Payments on the Rise

Digital payments and UPI have played a crucial role in the development of e-commerce in developed as well as developing countries like India. Even before the pandemic that took millions of lives worldwide, individuals and companies were using digital apps to monitor their budgets and perform transactions. But amid the COVID-19 outbreak, UPI transactions nearly doubled between the month of April and September 2020, hitting a volume of more than 180 crores, according to the National Payments Corporation of India (NPCI). Experts and technocrats believe that digital payments such as cryptocurrencies have the potential to accelerate financial inclusion and open gateways to new forms of investing. Over the projected period of 2021 to 2026, the Digital Payments Market is predicted to expand at a CAGR of 13.7 percent. 

Want to know more about cryptocurrencies? Get started today as a Certified Cryptocurrency Expert now!

What are the Associated Risks?

The digital transaction market is gaining traction and expanding at an unprecedented pace, which is positive news for the economy as more people are accepting this approach alongside the traditional one.

But undoubtedly, there are challenges associated with digital payments that need to be addressed. Let’s delve deeper and explore. 

The growth in digital payments has coincided with a dramatic increase in digital payment fraud. During the pandemic, there was a spike in the number of fake phone calls and SMS, as well as illegal SIM copying, vishing threats, and cashback/refund scams.

Although digital payments are inspired by technology innovations, they are still prone to threats and cyber-attacks. People with malicious motivations find ways to trick people by sending links or producing a dummy app that consumers are unable to comprehend and hence fall prey to certain assaults. During a pandemic, the ‘Request Money’ scam became one of the most popular fraud tales. 

As a result, it is becoming increasingly important for businesses and private actors to collaborate in order to provide the appropriate strategies to defend consumers in an increasingly sophisticated threat environment.

Internet penetration, illiteracy, lack of trust are some of the other issues related to digital payments. 

Blockchain and Sound-based Technology: A Smart Combination of Technologies

Although various technologies and security protocols are emerging to fend off malicious actors, this has, however, not prevented fraud from taking place. Moreover, the two-step authentication mechanism can become a cause of trouble where digital or internet penetration level is far from optimal. 

Blockchain professionals and technocrats believe that a combination of peer-to-peer, decentralized distributed ledger technology, Blockchain, and soundwave technologies can be the key to solving the problem. 

If you are a beginner to Blockchain, please note that it is a P2P decentralized distributed ledger technology that maintains the history of records in an immutable manner.  

Since the technology keeps a record of every transaction in millions of separate blocks, therefore even if one block suffers an attack, the information contained in the rest of the blocks will stay secure and intact. Thus, when it comes to hacking a Blockchain system, the threat actors would require to leverage tremendous computing power to compromise millions of nodes(blocks) at the same time. In fact, hacking a Blockchain is almost close to impossible. 

As a result, this technology emerges as an optimal method for securely storing all transaction-related data.

Does that mean that it is 100% secured? No, it is not. As nothing is 100% secure, therefore, Blockchain can suffer from crypto key tampering, lack of Blockchain integrity and security plans, inappropriate consensus mechanism, lack of malicious code protection, misused timestamps, and other issues.

Now, coming to sound-based technology, the biggest benefit of using this technology is that it is hardware-independent. Users often don’t require mobile devices or internet connections to make digital payments using this technology because it allows for smooth contactless payments by sound.

The fusion of Blockchain and soundwave technology is ideal for allowing safer, transparent, and contactless payments.

Are you a beginner but want to get started as a Blockchain Developer? Check out Blockchain Council now! 

Concluding Lines 

The advent of digital-based payments such as cryptocurrencies and others has presented enterprises and even individuals with a tremendous opportunity to expand and lead. A lot of big players have entered the crypto space and are eyeing to grow exponentially as it brings transparency, faster cross-border settlements, and lowers operational costs.

Curious to learn more about cryptocurrencies and Blockchain technology. Get enrolled and become a Certified Blockchain Expert today!

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council. 

How Blockchain and Sound-Based Technology Protect Digital Payment Systems

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A Beginner’s Guide to Non-Fungible Tokens (NFT)

A Beginner's Guide To Non-Fungible Tokens (NFT)

If you’ve ever used the words “NFT” or “non-fungible token” and had no idea what they meant, you’re not alone.
Until 2021, it was a relatively rare concept, but in recent months, it’s become more common to hear it mentioned in conjunction with digital artwork sold for millions of dollars.
In the cryptocurrency world, NFTs are the latest craze.
Are NFTs, however, worth all of the publicity and, well, money? They aren’t going to be around for too long, according to many experts. Many others, on the other hand, believe that NFTs are here to stay and will forever change investing.
But, first and foremost, what is NFT?

Table of Contents 

    • What is NFT?
    • What You Should Do About NFTs
    • How do NFTs work?
    • Why is the price of NFTs so high?
    • Wrapping up

What is NFT?

The most recent blockchain craze to enter the mainstream is non-fungible tokens or NFTs.

NFTs, or non-fungible tokens, are cryptographic objects on the blockchain with special identification codes and metadata that differentiate them from one another. They cannot be sold or substituted for equivalency, unlike bitcoin. This is in contrast to fungible currencies, such as bitcoins, which may be used as a means of exchange since they are interchangeable.

The special construction of each NFT allows for a wide range of applications. They’re an excellent way to digitally represent real-world artifacts like real estate and artwork, for example. Since NFTs are based on blockchains, they may also be used to replace intermediaries and link artists and fans, as well as for identity management. NFTs will cut out the middlemen, simplify contracts, and provide new markets.

Want to become a Certified NFT Expert? Sign up to the Blockchain Council now!

What You Should Do About NFTs

Cryptocurrencies, like real money, are fungible, which means they can be bought and traded with one another. For eg, one Bitcoin is still worth the same as another Bitcoin. A single Ether unit is frequently equivalent to another Ether unit. Because of their fungibility, cryptocurrencies are suitable for use as a stable medium of trade in the modern age.

Non-fungible tokens (NFTs) change the crypto model by rendering each token exclusive and irreplaceable, making comparisons between non-fungible tokens impossible. They’ve been compared to digital passports because they’re digital representations of money, and each token has its own exclusive, non-transferable identity that sets it apart from the others. They’re also extensible, meaning you can combine two NFTs to make a third, exclusive NFT.

NFTs, like Bitcoin, have unique ownership characteristics that make it simple to recognize and transfer tokens between owners. Owners of NFTs may also provide metadata or attributes about the asset. Coffee beans, for example, maybe represented by fair exchange tokens. Artists may also sign their immersive artwork with their own name in the metadata.

NFTs were created as a result of the ERC-721 specification. The ERC-721 standard specifies the minimum interface for sharing and distributing gaming tokens, including ownership histories, authorization, and metadata. The ERC-1155 protocol expands on this idea by lowering non-fungible token processing and storage costs while still allowing many non-fungible token forms to be combined into a single contract.

How do NFTs work?

On a high level, most NFTs are part of the Ethereum blockchain. The blockchain also supports certain NFTs, which store additional information that enables them to work differently than, say, an ETH coin. Ethereum, like bitcoin and dogecoin, is a cryptocurrency, but the blockchain frequently accepts such non-fungible tokens (NFTs), which store additional information that enables them to function differently from an ETH coin, for example. It’s important to note that NFTs can be used in a variety of ways by other blockchains.

There are no physical items shared since NFTs are only usable in digital form.

Similar to crypto-currency, a blockchain (a digital record) acts as a public ledger to verify ownership status. Critics lament that these artificial inventions can be accessed and traded, but experts argue that this is close to how things work in the physical world. A copy of an existing work of art is not the same as the original. A “token” is sent to the buyer of an NFT, proving that they are the only ones who have the “original” work.

Why is the price of NFTs so high?

Anyone should use an NFT to tokenize their “one-of-a-kind” work in theory.

Non-fungible tokens go a bit above the comparatively simple concept of cryptocurrencies. Complex exchange and leasing schemes are available for a range of asset types, including real estate, loan arrangements, and artwork, in modern finance systems. NFTs are a step forward in the reimagining of this infrastructure and they provide digital versions of physical properties.

To be sure, neither the concept of digital representations of physical objects nor the use of a unique identity are novel concepts. When these innovations are mixed with the benefits of a tamper-proof blockchain with smart contracts, they become a strong force for change.

The most noticeable advantage of NFTs is their productivity in the workplace. Converting a tangible asset to a digital asset streamlines operations and eliminates the need for middlemen. 

On a blockchain, NFTs reflect digital or tangible artwork, removing the need for agents and allowing artists to interact directly with their audiences. They will also help businesses grow their operations. An NFT for a designer bag, for example, would make it easier for various supply chain participants to communicate with it and monitor its development, processing, and distribution during the process.

Non-fungible tokens may also be used to keep track of identities. Take, for example, ID cards for work in a company, which must be shown at all points of entry and exit. Individual ID cards may be converted into NFTs, each with its own unique set of characteristics, to streamline entry and exit procedures for officials. 

NFTs can democratize investing by fractionalizing tangible assets such as real estate.
It is 100 times easier to distribute a digital asset between multiple owners than a physical one.

This tokenization approach isn’t just about real estate; it can be applied to other forms of property as well, such as artwork. As a result, artwork does not need to be purchased by a particular person. Its digital equivalent will be owned by many people, each of whom will be responsible for a small part of the job. Deals like this have the potential to increase the company’s value and profits.

The emergence of new opportunities and ways of funding is the most promising opportunity for NFTs. Consider a parcel of land that has been subdivided into many parts, each with its own collection of characteristics and property types. One division might be near a beach, while another might be a shopping mall, and yet another might be a suburban town. Each piece of land is exclusive, priced appropriately, and represented by an NFT that reflects its characteristics. Real estate trading, which is a complex and bureaucratic operation, can be simplified by adding relevant metadata into each special NFT.

Wrapping up

So there you have it, the A to Z of NFTs. The concept of tokenized pieces of land of different values and positions could be applied in the modern world as NFTs became more sophisticated and integrated into the financial infrastructure. To summarise, combining art and collectible attributes seems to be one of the most effective ways to draw new buyers.

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council.

A Beginner’s Guide to Non-Fungible Tokens (NFT)

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How NFTs, DeFi and Web 3.0 are intertwined

While blockchain itself provides the technology constructs to facilitate exchange, ownership and trust in the network, it is in the digitization of value elements where asset tokenization is essential. Tokenization is the process of converting the assets and rights to a property into a digital representation, or token, on a blockchain network. 

Distinguishing between cryptocurrency and tokenized assets is important in understanding exchange vehicles, valuation models and fungibility across the various value networks that are emerging and posing interoperability challenges. These are not just technical challenges, but also business challenges around equitable swaps.

Asset tokenization can lead to the creation of a business model that fuels fractional ownership, the ability to own an instance of a large asset. While discussing asset tokenization in a previous article, I also mentioned the value of an instance economy in democratizing finance, commerce and global access, as well as in creating a broader global marketplace at a scale never before seen.

With digital assets and their fungibility in a blockchain ecosystem, there are various drivers of valuation. These include: 1) tokens based on crypto economic models that are driven by supply and demand, and the utility of the network; 2) nonfungible tokens, or NFTs, which have an intrinsic value such as identification, diplomas and healthcare records — essentially, tokens that are simple proof validations of the existence, authenticity and ownership of digital assets; and 3) fungible tokens that are valued on various bases, such as the sum total of economic activity in the network (cryptocurrency), its utility (smart contracts and transaction network processing), assigned values (stable coins and security tokens), and so on.

In this article, I address the complex issue of the hyperbolic and rapid rise of NFTs, after a similarly meteoric rise of decentralized finance, or DeFi, creating amazing innovations — with immense promise of democratization, new business models and global marketplaces with global access — all fueled by the basic premise of decentralization and fundamental constructs of tokenization and wallets. While NFTs may be characterized as one-of-a-kind cryptographic tokens with some intrinsic value to a holder or to a market (art, collectibles), the NFT movement is indicative of a larger token revolution that will not only fuel massive innovation and growth in Web 3.0 protocols but also test the resolve of the DeFi movement, along with its ability to intersect and provide platforms and an exchange vehicle for all token types.

Growth in Web 3.0 protocols

The first two generations of web protocols were largely about disseminating information and connecting people. They fueled a massive growth in information and collaboration, and did wonders for connecting the world. However, those web protocols were never designed to move things of value. Also, as the Web 2.0 era reached its fullest potential, vulnerabilities such as “fake news” and the “batched relay” of the movement of assets via a series of intermediaries emerged. Threats to the commerce and financial infrastructure of the system risk destabilizing it.

Web 3.0 promises to safeguard all things we value: information, truth and digital assets — both fungible and nonfungible. Whereas Web 2.0 was driven by the advent of social, mobile and the cloud, Web 3.0 is largely built on three new layers of technological innovation: edge computing, decentralized data networks and artificial intelligence.

The growth of NFTs has not only empowered the ability for artists, skilled professionals and entrepreneurs to encapsulate innovation in a tokenized form but has also fueled the democratization of the platform as one of the promises of blockchain technology. The underlying infrastructure includes decentralized storage technologies, efficient consensus protocols, off-chain computing, and oracle networks to provide connectivity and validation to existing systems.

Collectively, the Web 3.0 set of technologies envisions a connected, trustless, accountable network for efficiently delivering value, thus crafting an infrastructure for things of worth. NFTs represent both transferable entities and nontransferable tokens that we value. The latter include things such as our identification, healthcare records and passports, things that represent us and allow us to participate in the digital economy with our own unique, digital identities.

As we dare to envision a shift toward a world with decentralized control, governance based on distributed technology that challenges every business model, and governance structure built upon centralized business frameworks, we do have to ponder some things. Not only the shift itself, but the motivation, incentive and monetization elements that fuel and power the economic infrastructure to move things that have value — thereby keeping up with our changing perception and subsequent realization of that value.

Intersecting with finance — DeFi

DeFi is the movement in the blockchain applications space that leverages decentralized network technology to disrupt and force a transformation of old financial products into trustless, transparent protocols, facilitating digital value creation and dissemination with few to no intermediaries. It is widely understood and accepted that — due to new synergies and co-creation via new digital interactions and value-exchange mechanisms — blockchain technology lays the foundation for a trusted digital transactional network that, as a disintermediated platform, fuels the growth of marketplaces and secondary markets.

While DeFi aims to deliver the promise of finance democratization, NFTs test the resolve of DeFi by delivering a competitive yet inclusive asset class, plus avenues to provide a medium of exchange, fungibility by other fungible asset classes, and liquidity to a traditionally illiquid market.

Asset classes resulting from DeFi protocols and NFTs avail themselves of the advantages of fractional ownership of the assets, blurring the lines between asset classes and using constructs like digital wallets as a receptacle for them. This is all supported by underlying layers of Web 3.0 that provide security and availability via decentralization, as well as trust and immutability via consensus, extending these principles to basic computer infrastructure like storage and interconnect.

Commercialization of Web 3.0 protocols, which manifest as fungible utility tokens, further blurs the lines with diverse financial innovation products introduced by DeFi (such as base assets and derivatives), products that are also tokenized. So, while decentralization is the underlying theme — and the wallet and the token are fundamental constructs — these blurring lines are quite profound.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Nitin Gaur is the founder and director of IBM Digital Asset Labs, where he devises industry standards and use cases and works toward making blockchain for the enterprise a reality. He previously served as chief technology officer of IBM World Wire and of IBM Mobile Payments and Enterprise Mobile Solutions, and he founded IBM Blockchain Labs where he led the effort in establishing the blockchain practice for the enterprise. Nitin is also an IBM Distinguished Engineer and an IBM Master Inventor with a rich patent portfolio. Additionally, he serves as research and portfolio manager for Portal Asset Management, a multi-manager fund specializing in digital assets and DeFi investment strategies.

How NFTs, DeFi and Web 3.0 are intertwined

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