The Future with Blockchain: Part 1

The

Future

with

Blockchain

Part 1

Ahmed Omar

Founder of COD Coin, CEO of ConnectDApp

Copyright © 2020 Ahmed Omar

Published by Ahmed Omar Publishing at Smashwords

First edition 2020

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage or retrieval system without permission from the copyright holder.

The Author has made every effort to trace and acknowledge sources/resources/individuals. In the event that any images/information have been incorrectly attributed or credited, the Author will be pleased to rectify these omissions at the earliest opportunity.

Published by Ahmed Omar using Reach Publishers’ services,

P O Box 1384, Wandsbeck, South Africa, 3631

Edited by Trevor French for Reach Publishers

Cover designed by Reach Publishers

Website: www.reachpublishers.org

E-mail: reach@reachpublish.co.za

Ahmed Omar

ahmed.omar0@gmail.com

https://www.linkedin.com/in/ahmed-omar-71b99bb/

Ahmed.omar@connectdapp.com

https://www.connectdapp.xyz/

https://connectdapp.com/

https://tronscan.org/#/token/1002446

Presentation

Although my mother died in the year 2002, she never ceased to inspire me and I will never ever forget about her precious, valuable and full-of-wisdom words that were the main trigger to keep doing good things, So, for you mom, thanks for being in my life and may Allah rest your good soul in peace and heaven, and thank God for granting me such a gift. Also, thanks for my family and friends who keep supporting me. Finally, thanks to Reach Publishing for their professional services.

Introduction

This book is about taking you through the blockchain world starting with the history of blockchain. What is blockchain? Cryptocurrency as the first-used application of blockchain; the future of blockchain, but basically to be able to predict the future you have to study the history first and understand its elements and make a proper root cause analysis in order to be close enough in your predictions for the future.

It is not our target to have a full study of the business areas that will have some changes with blockchain injection to their core systems but to represent the history so as to let you at least know about where the current system is at and how it will be when injecting blockchain. That is why if you are an expert in the banking sector and are interested to know what the banking system will look like with blockchain, you may bypass the history part of the banking chapter and go directly to The Future of the Banking System with Blockchain.

The book targets any level of knowledge starting at zero knowledge about IT or blockchain to experts who know about blockchain and want to know more about it and its different uses, i.e. cases other than cryptocurrency.

So no matter the level of expertise you have in IT, blockchain or even the sectors that are going to be introduced to blockchain, don’t worry as the book will represent the history of each industry before moving on to what it will look like when blockchain is applied.

The Future With Blockchain will lead into two main areas, one related to blockchain’s application as currency and secondly usage of blockchain applications in the IT industry and different business areas.

The target audience for this book will be a wide range of people interested to know about blockchain in general, fintech companies and interests, technology partners and providers, financial sector enthusiasts and members, government decision makers and far more normal people who would like to begin their first steps into cryptocurrency.

The tangible fact about blockchain is that its development and evolution rate is tremendously fast from day to day which leads to the future of blockchain getting to be reachable in a very fast way due to the enthusiasm of people working in development of the industry every day.

The book will present separate chapters for each area and move through the specified area from history and when it was started till blockchain impacted on that area.

The area could be business or IT technical related.

For some sections we had to do some research and rely on experts in respective areas in order to bring up the history to give a better understanding of why we think the future could be enhanced with blockchain.

The book is presented in two parts. The first part will cover chapters: Blockchain History, Blockchain Types, All About Cryptocurrency, The Future of Blockchain in Financial Systems, The Future of Blockchain in International Trading Business, The Future of Blockchain in Notary, Real Estate Registrations and Surveying, The Future of Blockchain Jobs, Sectors Related to Blockchain and Possibilities of Opening New Opportunities.

The second part will cover the following: The Future of Blockchain in the Healthcare and Insurance Industry, The Future of Blockchain in Vehicle Registration and International Car History Records, The Future of Blockchain in the Supply Chain Industry, The Future of Blockchain in Custom Operation, The Future of Blockchain in Media and News industry, The Future of Blockchain in the Education System, The Future of Blockchain in the Voting System, The Future of Blockchain in Intellectual Property and Copyrights, The Future of Blockchain in Courts and Jurisdiction Systems.

About ConnectDApp Blockchain Technology Solutions

ConnectDApp is an initiative started in the year 2016. The idea came to combine a set of services in one mobile app and avail fees and charge payment for those services using cryptocurrency. The idea is backed with two cryptocurrencies, COD which was founded in 2018, and COC, which will be implemented on a separate blockchain to avail mining through mobile-only Anti ASIC Mining, the main idea behind this being that with holding COD or COC, you will be able to use any cryptocurrency-related services from ConnectDApp from your mobile device. For holding COD coin we have decided to apply a proof of stack concept in order to be able to do mining for COC Coin through mobile services like exchange, wallet and mining. Mining pools will be accessed from one place. Normal services like Connect Magazine will be available by using cryptocurrency to pay magazine monthly or weekly fees. All services are going to be ended with a supporting connect crypto card that is an available debit card that could be used with POS and ATMs network around the globe and backed with a cryptocurrency balance. We live to avail a one-day dream to have one mobile app supporting all kinds of related services for cryptocurrency and at the end a real end-user service payment with cryptocurrency.

Later on, we have decided to move into a consultation area related to blockchain application and systems in which we will avail our experience to people and companies that would like to have an IT system integrated with any type of blockchain application based on system, business nature, rules and regulations. So in order to make it easy for people we have decided to help others in thinking about the areas that blockchain could fit in and we chose the most likely system to be integrated or revolutionarily enhanced with blockchain technology and we decided to postfix each chapter with the future of those areas using blockchain technology from our perspective. Also, we didn’t only present the future, but before that we had to present the history from the perspective of experts in that area and that’s why it’s important to check the reference section to find out who are the experts that we rely on to represent the history of specific business or domain areas and integrate it with our area of expertise, which is in our case the blockchain. We hope that you enjoy the book and feel free to communicate with us for further information or consultations in the area of blockchain.

Table of Contents

Presentation

Introduction

About ConnectDApp Blockchain Technology Solutions

1. Blockchain History

a. History of Money

b. What is Blockchain and Blockchain History

c. Blockchain and Cryptocurrency

2. Blockchain Types

a. Public Blockchain Vs Private Blockchain

b. Hybrid Blockchains

c. Consortium Blockchains

3. All about Cryptocurrency

4. Future of Blockchain in the Financial System

5. Future of Blockchain in the International Trading Business

6. Future of Blockchain in Notary, Real Estate Registrations and surveying

7. The Future of Blockchain in Banking

8. The Future of Blockchain Jobs, Sectors related to Blockchain and Possibilities of Opening New Opportunities

References and recommended sources:

Chapter 1

Blockchain History

a. History of Money

I find it important to dig deeply when looking into currency in general and how it was started, before going into an important step in currency tracking, which is digital currency. It’s also important to understand the history in order to realise that blockchain and cryptocurrency are arriving as a progressive step to what we are experiencing today with effective use of our surrounding technology.

The Functions of Currencies

When we start to talk about money, we need to consider three main factors of money: Medium of Exchange, Unit of Accounts and Store of Value.

So how and why money could be a medium of exchange?

The ease/efficiency with which a currency can be exchanged for products and services. Contemporary currencies represent a more efficient way to exchange products and services than the barter system. In this regard, money serves the role of an intermediary between the products or services that people want to trade.

What makes a good medium of exchange when we consider these factors:

Durability: Whether money can be passed around without the danger of wear and damage. Generally, yes for traditional currencies, but there is a slight danger of damage and wear.

Transportability: Whether money can be easily put in your pocket and transferred anywhere.

Divisibility: A US$10 bill can be exchanged for two US$5 bills, etc.

Fungibility: Interchangeable? I can exchange 10 Euros for a meal or 11.38 US dollars.

Non-counterfeit ability: Fake paper money is everywhere and is a long-standing problem for almost all currencies.

Then how could money be considered as a unit of account?

Prices are quoted in terms of money rather than other goods. Prices can indicate the measurement of the value of goods, services, economic activities, assets and liabilities.

Let’s give an example: The price of a bottle of Internet service is US$50 monthly. We could say that monthly Internet service fee is US$50 which equals XX amount of cryptocurrency.

Unit of account stability value makes it more useful in inflationary currencies; for example, over long periods of time, results are not comparable, leading to the need to use nominal (actual) vs real (inflation-adjusted) values in order to make measurements comparable again.

How currency could be a store of value

A store of value is a mechanism by which wealth can be saved and retrieved in the future with some predictability about its future value. Store of value is not a function solely of currencies, but of assets in general as all asset prices have greater or lesser degrees of unpredictability. We have to keep in mind that there is nothing called perfect store of value, but we might consider predictions of expected store of value based on current store of value.

Examples for stores of value: gold, silver, diamonds.

Reserve currencies and/or the bonds of reserve local currency, stocks, bonds, real estate. We have to consider that such assets are subject to volatility.

Barter through coinage era

Barter was the earliest form of commerce and trade, an activity of simply trading goods or services directly, without any intermediary medium of exchange. In small villages or tribes, with limited specialisation of production and similar needs, this was an acceptable approach between populations.

Barter suffers in a modern specialised economy from the need to uncover a double coincidence of needs. If you assume that everyone is a seller or buyer of goods and services, the seller has to believe that the goods/services they are receiving from their buyer will, in turn, be acceptable to the sellers they buy from, a double coincidence which imposes significant costs.

What is perhaps surprising, in this light, is barter’s resiliency in some pockets of modern economies.

Gift exchange is a form of barter that has not, on the whole, been supplemented with more efficient methods like cash transfers. Even as late as the 1980s, there were many bilateral agreements, most notably with Eastern countries and Iran, with primarily involved commodities (such as oil or grain) being exchanged for heavy industrial equipment and products.

Primitive Money

Primitive money was the only form of money until coinage was invented in Lydia (Greece) in the 7th century BCE. It remained in heavy parallel use through the 19th century – e.g. tobacco was made legal tender in Virginia in 1642 and remained so for nearly two centuries.

It remains in parallel use in isolated economies; e.g. cigarettes in prisons.

While an improvement on barter in terms of efficiency, it can suffer as a medium of exchange in the areas of transportability, durability, fungibility and divisibility. It is also vulnerable to positive and negative supply shocks that cause price volatility, making it at times unstable as a store of value and unit of account.

All money that is not coin or, like modern paper money, a derivative of coin.

– P. Grierson, Professor of Numismatics at Cambridge

Known forms of primitive money

The Rai are large stone disks used on the Yap island in the Western Pacific. They were minted from the limestone deposits of the nearby island of Palau and used as a currency until the 20th century.

Given their size (up to 9,000 pounds), Rai stones were not moved when spent, but simply changed owners. Every transaction was recorded orally within the small community, with the stone’s ownership history becoming common knowledge. Eventually, the transaction history/ledger became the only part that mattered (e.g. a stone was once dropped by the canoe transferring it to Yap and sank. The stone was deemed to still be money, since it still existed, even though no one has seen it since, or had access to it).

This is particularly important, because it demonstrates a naturally occurring use of a ledger of transactions. This ledger was shared orally between the inhabitants, attributed ownership and delegated property without a single stone moving, because everyone agreed on it.

The invention of coinage

Modern coinage was first invented either in ancient China or ancient Greece, depending on how one defines the separating line between primitive money and modern coins.

China created metal cowries (along with spades, hoes and knifes) as early as 1200 BCE – these metal objects can be considered either institutionally standardised primitive money or early modern coinage.

They eventually evolved into standardised circular coins around 200 BCE, though solely of base metals, and therefore in very low denominations.

Historical note: As Portuguese trade emerged with China in the 15th century, these coins became known by their Tamilian (South Indian) name of kāsu/coin money. Today, that name survives for money in small denominations in the English word cash.

The first clearly modern coinage was developed in Lydia, a Greek kingdom (in modern-day Turkey) in approximately the 7th century BCE, in stamped coins of electrum (a gold/silver mix). While ingots previously existed in Cappadocia and Crete, the Lydian coins are generally accepted as the first modern coinage in form and style and marked a big step forward in transportability, standardisation and institutionalisation.

The era of coinage

After coinage was invented in Lydia, it spread through the Greek city-states and was eventually adopted by the Romans.

In aggregate, metal coinage became the dominant form of currency in Western economies well into the 18th or 19th century and was issued in a bewildering number of permutations and combinations.

A money changer’s manual published in Amsterdam in 1606 listed 341 silver and 505 gold coins. The fact that coins contained valuable commodity metals led to ongoing difficulties, with debasement and shaving/clipping coin issuers perpetually tempted to debase coins (reduce the quantity of valuable metals in coins).

Users of coins were also tempted to shave or clip coins, a minor benefit on a per-coin basis, but on aggregate a profitable exercise.

Debasement led to Gresham’s law that bad money drives out good money – in other words, people prefer to hold on to clearly good money and spend clearly bad money until only bad money is in circulation, changes in the prices of the underlying metals, change to the effective value of the coin relative to its initial value, making useful comparisons across time difficult, which at the end defines the unstable unit of account.

Coinage through fiat currency

Before we understand fiat currency let’s have it defined and categorised.

So, commodity money. The money that has some other non-monetary use and value (e.g. gold for jewellery). Both primitive and modern money can be commodity money.

Gold standard: This is a form of commodity-backed money or, under some definitions, representational money, where paper notes are redeemable for gold (or, in alternative models, silver).

Fiat money: Any legal currency defined as money by government law or regulation which is not backed by a physical commodity; gold, silver, etc.

Legal tender: A payment method which is recognised as legal when it is offered to meet a financial obligation.

Bank notes: Also: bill, note, paper money. A form of promissory note made by a bank, payable on the requested date.

Paper currency in China

General consensus is that paper currency emerged in China, as was seen hundreds of years later in Amsterdam. The origins of paper currency began with receipts of deposits for coin currency. As we recall, Chinese cash coinage was in very small denominations, making it unwieldy for large commercial transactions. Merchants would deposit their coinage at a small number of government-authorised deposit shops and use their receipts to trade more conveniently by the year 1120. The government had recognised the potential of paper money and started issuing the first generally circulating banknotes, granting itself a monopoly in the area. Currency remained regional until the year 1265 when the Song government produced a national currency, with notes representing 1 to 100 strings of cash.

Marco Polo described this innovation

"With these pieces of paper, made as I have described, he [Khubilai Khan] causes all payments on his own account to be made; and he makes them to pass current universally over all his kingdoms and provinces and territories, and whithersoever his power and sovereignty extends. And nobody, however important he may think himself, dares to refuse them on pain of death. And indeed everybody takes them readily, for wheresoever a person may go throughout the Great Khan’s dominions he shall find these pieces of paper current, and shall be able to transact all sales and purchases of goods by means of them just as well as if they were coins of pure gold. And all the while they are so light that ten bezants’ worth does not weigh one golden bezant.

Furthermore all merchants arriving from India or other countries, and bringing with them gold or silver or gems and pearls, are prohibited from selling to any one but the Emperor. He has twelve experts chosen for this business, men of shrewdness and experience in such affairs; these appraise the articles, and the Emperor then pays a liberal price for them in those pieces of paper. The merchants accept his price readily, for in the first place they would not get so good a one from anybody else, and secondly, they are paid without any delay. And with this paper-money they can buy what they like anywhere over the Empire, whilst it is also vastly lighter to carry about on their journeys.

The Bank of Amsterdam

Depository receipts for precious metals had existed in Southern Europe countries for centuries, but the first true public bank was the Bank of Amsterdam, founded in 1609.

The Bank of Amsterdam was guaranteed by the City of Amsterdam and was tasked with bringing order and efficiency to the wide range of coinage in circulation in Amsterdam, a major commercial centre at the time. Moreover, the bank accepted local, foreign and debased coins, valued them according to common standards, and then gave credit in an account in a common value, bank money, for which it issued a receipt (and charged a small administration fee). This standardisation of values significantly diminished the incentives to debase money (and the profitability of doing so) and was an important step in making European currency more efficient, as in China we see that the first step toward paper money was a receipt for metal coinage which itself became tradeable.

The Bank of Amsterdam also