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What Blockchain really is

And what it is not: let's discover together the problems that blockchain answers!

28/08/2022


That's it! You have succeeded, after 13 years of hard work, in putting the word "blockchain" in a game of Scrabble. You've heard about it: this technology is gradually gaining momentum, especially in the field of finance. You know that Blockchain is here, but you haven't really grasped its meaning yet... Let's find out together!



Why? How do we do it?


Of the opacity of the production cycles...


Every day, millions of products (food and others) are bought in France. Some of these products are of French origin or manufactured in France. To be sure of this, the French trust article 39 of the customs code and the meticulous work of the DGDDI to repress the litigious mentions "Made in France".


With 75% of the French population preferring to buy "Made in France", it would be relevant to let consumers trace the production cycle of products and thus verify their origin. Today, this is impossible: the production cycles are opaque. To allow such traceability, we need more transparent systems.


Improving the traceability of production cycles would also make it possible to eliminate the 15% of counterfeit medicines in circulation in developing countries, responsible for 700,000 deaths per year according to the WHO.



...to the inefficiency of health services...


The follow-up of a patient's medical file is complex today because of the independence of the computer systems of health establishments (hospitals, clinics, EHPAD, ...): no standard of medical file is established. Indeed, computerized access to a patient's medical data presents problems :

  • Security: the computer systems of institutions can be hacked
  • Confidentiality: patient data could be used without the patient's knowledge
  • Robustness: computer systems can be destroyed/damaged and cause data loss

To overcome this problem, we need robust, confidential, secure and interoperable IT systems.


...through slow financial services

On average, a victim of an insurance claim waits 3 months before receiving the compensation promised by the contract signed with the insurance company. There are several reasons for this delay:

  • The chain processing of the intrinsic checks of the claims (which cannot be processed simultaneously, due to the size of the company)
  • The difficulty for the victim to declare the claim
  • The ultra-hierarchical nature of the insurance company's internal teams, which increases communication delays

Only one department of the insurance company is responsible for the processing and verification of a claim. In order to be done simultaneously and speed up the overall processing, these must be decentralized - managed by several responsible teams.


Blockchain, a solution in a few words


The government's Economy site has very well defined, in a concise way, the principle of the blockchain:

Blockchain is primarily a technology for storing and transmitting information. This technology offers high standards of transparency and security because it operates without a central control body. More concretely, the blockchain allows its users - connected in a network - to share data, without intermediaries.


When we talk about a transaction, we are not only talking about finance! It is (most of the time) an information transaction, i.e. a message containing data to be shared or written in the blockchain! For example, I can choose to put my first and last name on the blockchain.


Because it is secure, public and robust, the blockchain is a way to address solutions to the problems mentioned above:

  • In the field of production : to transparently trace the production cycle of a product: the blockchain would allow to make transparent the flow of resources around the world, via transactions
  • In Healthcare : to enable the exchange of partial data on patient records: thanks to the principle of zero disclosure of knowledge, it is sufficient to query the blockchain on specific patient health issues
  • In Actuarial : to facilitate claims declarations and compensation: since interactions occur directly on the blockchain, it would be easier to declare, verify (via one or more quorums) and compensate the victims
  • In Finance: to simplify international bank transfers
  • In Justice: to accelerate the process of verifications and judgments
  • In events, trade, art: to facilitate the proof of possession and authenticity of a good or a right
  • And many other fields...



Blockchain is not just for trading cryptocurrencies


The blockchain was born with Bitcoin in 2008, a new monetary system that gave birth to the term "cryptocurrency" (crypto from cryptography, a scientific field concerned with securing the exchange of messages). But the Bitcoin network democratized the blockchain in its primitive form: the one that only allows the exchange of bitcoins.


Since then, other blockchains have emerged, each with its own use case and cryptocurrency (these are necessary to encourage users to maintain the blockchain). Specifically, the Ethereum project developed the blockchain principle in 2015 by allowing information to be stored and exchanged.



Blockchain is not a way to launder money


Although anonymity reigns on the blockchain (and this for reasons of confidentiality necessary in certain areas), all transactions are traceable, since all the content of the blockchain is public. This means that the origin, exchange and destination of any transaction is known and verifiable by any user: it follows that fraudulent uses and money laundering via cryptocurrency are even more difficult than with fiat money (whose transactions are opaque).

In fact, according to studies by Europol and Chainalysis, illicit activity in cryptocurrencies accounts for 0.3% to 3% of trading volumes. That's 10 times less than with fiat currency!


In short, the Bitcoin blockchain was only the first step: several blockchains have emerged since the appearance of Bitcoin. Ethereum, Polygon, Avalanche, Solana, Polkadot, Cosmos (and many others!) are participating, thanks to millions of people, in the development of the technology, to lead systems around the world to a different way of working together.

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