Blockchain - As I See It

Block chain is a technology that enables moving digital coins or assets from one place/individual to other. The terms bitcoin and blockchain are different, I often see people interchange these terms. Bitcoin is a digital coin but not a technology. In a typical transaction there are many third-party services that transfer money between two persons. These third-party services charge a fee to perform a transaction. The basic problem block chain aims to solve is sending assets without an intermediate entity in less time. Assets cannot be always cash it may be bonds, stocks and rewards. It can be treated as Internet of Money.

Transactions are faster and trackable. We can use this data to perform exploratory analysis and build predictive models to forecast the money movement. Blockchain implements Decentralized ledger technology meaning it will allow to keep all transaction synchronized and in a distributed network. Many Cryptocurrencies emerged based on blockchain technology. This has been a digital asset in many countries for transactions and payments.

Libra

Libra is upcoming permissioned blockchain system as payment gateway developed by Facebook, Inc. It was projected to release in January 2021. Facebook has planned to make its own cryptocurrency and enable social media payments. On privacy note, experts say that Facebook will be using blockchain technology to hide user’s identity and provide users more control over their data. If we compare libra to bitcoin, biggest difference is permission of usage. Bitcoin if permission less whereas libra is permissioned and centralized. Facebook also proposed that 1000 transactions can be handled within a second whereas bitcoin handles 7 transactions per second. This is very faster and secured. Another difference is transactions on libra cannot be reversed whereas in blockchain there is a chance of doing it. The only similarity I see between bitcoin and libra are both are distributed ledgers sharing data over internet.

Ripple

Of the available cryptocurrencies, the most popular was Bitcoin. But biggest disadvantage of bitcoin is, it does not work with existing currencies so users find difficult in making transactions in many countries. To address this issue Ripple came up with a solution to integrate blockchain with existing currencies. Here, money does not to be a currency, but it can be any item of value. Examples of items include gold, digital assets etc. Ripple has its own currency which is called XRP. Ripple reduces the transfer time from days to few seconds because of no human intervention. It is integrated with people’s bank accounts and ripple protocol will select cheapest available offer. Both bitcoin and ripple are government issued currencies, can be used to buy goods and services and works on blockchain technology. The biggest difference I see is the way they are used. While bitcoin is used as means of payment for goods and services, ripple is act as payment systems for banks and networks.