Get Certified in Blockchain
Pioneered by Satoshi Nakamoto, blockchain technology was introduced in October 2008 in connection with Bitcoin. Blockchain is essentially a technology that enables the transfer of value in a decentralized, autonomous way, eliminating the need for intermediaries. The technology makes it possible for users to record transactions, verify identity, and establish contracts — functions that are normally performed by banks and other financial services.
In effect, blockchain is a transparent, distributed digital ledger of economic transactions. Blockchain technology enables recording of any transaction of value between two parties. These transactions are permanent and verifiable. It is also possible to program the ledger for automatic activation of transactions.
Some have called blockchain the "internet of value." It enables digital records of all transactions to be stored securely in open, distributed databases. Cryptographic protection ensures that no record can be deleted or tampered with.
Business and Practical Applications
Blockchain "software has powered more than 100 million transactions and empowered users in 140 countries across the globe to transact quickly and without costly intermediaries."
According to Marco Iansiti and Karim R. Lakhani in their Harvard Business Review article "The Truth about Blockchain," blockchain applications fall into four categories:
Single use. Bitcoin is the first application of blockchain technology and an example of a single-use application.
Renowned risk analyst Nassim Taleb considers bitcoin "an excellent idea ... because it has no owner, no authority ... it is owned by ... its users." Bitcoin transactions do not require clearance from banks, governments, or other controlling authorities. It is decentralized.
Today, Bitcoin usage is growing in forex and asset trading transactions. It is also being increasingly used to facilitate instant payments.
Localized applications can generate value with just a few users, thereby being relatively easy to adopt. At present, it is the financial industry where localized blockchain applications have maximum traction.
In 2015, NASDAQ teamed up with Chain, a blockchain infrastructure provider, to provide digital technology to private companies for share transactions. In 2017, JP Morgan introduced a blockchain-based payments network.
Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, announced in January 2018 that it had entered a partnership with Blockstream to launch a cryptocurrency data feed for banks, hedge funds and trading firms. According to Goldman Sachs, blockchain also has the potential to streamline clearing and settlements.
Several banks, stock exchanges and market regulators across the world are experimenting with blockchain to speed up, streamline and secure transactions. Some financial entities have found that blockchain applications have helped reduce transaction costs.
Substitute applications need much more coordination than single-use and localized applications because they are intended for public use.
One of the most talked-about cryptocurrencies today, Stellar, is a substitute blockchain application. It is an open-source distributed payments platform launched to enable people, banks and payment systems to transact in currencies and other value-based assets. Its adoption is growing in emerging markets in Africa and Asia.
Transformative applications aim to do things in a completely new way. According to the authors, if these applications take off, they could usher in radical change, economically, socially and politically.
A smart contract is a transformative blockchain application wherein a payment, currency transfer or other value-based transaction is automatically transacted as soon as a previously agreed upon condition is met.
Ethereum is an open source project programmed to automatically implement self-executing contracts. It currently enables smart contracts to be coded to execute simple tasks.
How Does It Work?
Blockchain consists of a global network of millions of computing nodes. When a computer joins the network, it automatically receives a downloaded copy of the blockchain. Each computer on the network is an administrator.
Blocks of data are stored in a shared database across the network. It is decentralized; no central authority owns or controls this database. The network is programmed to continually update and reconcile the database every 10 minutes. Since records are distributed and not stored on a single system, it is easy to access and verify them.
A transaction is recorded not only in a central register, but in a distributed network of registers. These registers are connected to each other by a secure means of validation.
Single blocks consist of a group of transactions. Information in each block and the connection between blocks is cryptographically protected to ensure that previous transactions are not obliterated or faked. Records can be accessed using a public key, which is akin to a user ID, and a private key, which functions like a password. Only those who have the private key for a particular block can access and edit the data in that block.
Business applications include smart contracts, international remittances, share trading, online identity management, and loyalty and rewards management. Apart from its usefulness in cryptocurrency enablement, blockchain has three primary areas of application:
Supply chain auditing
U.K.-based company Provenance is offering supply-chain auditing for consumer products, such as fish for certain Japanese sushi restaurants. Using blockchain technology Provenance can ensure that fish are harvested ecologically. It has been reported that many companies are already using blockchain to track items through complex supply chains.
The free online marketplace OpenBazaar enables two parties to transact with each other directly without having to pay transaction fees. All users have to do is download the app and connect with vendors on OpenBazaar.
Augur, a decentralized prediction market platform developed on the Ethereum blockchain, enables users to predict events and receive rewards for correct forecasts.
Blockchain also enables musicians to sell songs and music directly to audiences. Singer Imogen Heap's Mycelia is a peer-to-peer distribution system, enabling artists to sell directly to listeners, license compositions to producers, and receive a share of royalties.
Increasing demand for skilled Blockchain professionals
Knowledgeable and qualified blockchain professionals are in high demand in the United States, Europe, and Asia. Blockchain developers are particularly sought after. The required skills and experience depend on the role in which you are interested.
If you want to work as a Blockchain or Ethereum developer, you will need a solid grounding in computer science or engineering, experience in back-end development and an understanding of cryptography. For some roles in the financial sector, a background in finance can be helpful.
There are a few vendor-specific and vendor-neutral certifications available. Popular certifications include:
Certified Ethereum Developer (CED) — Offered by the Cryptocurrency Certification Consortium, this credential is designed primarily for software engineers, programmers, developers, and application architects. Those who already use Ethereum or have a serious interest in cryptocurrencies can also prepare for the exam.
Certified Blockchain Expert (CBE) — Candidates for this credential, offered by the Blockchain Council, are required to have some knowledge of cryptocurrencies, such as Bitcoin, a basic understanding of computer science, and the motivation to study blockchain technology in depth.
The IBM Blockchain Foundation for Developers is designed for developers looking to work on blockchain. Candidates are taught how to develop blockchain business networks.
The Linux Foundation's Blockchain for Business — An Introduction to Hyperledger Technologies credential is designed for technical and non-technical applicants. Certification holders are trained in identifying appropriate blockchain uses for business needs and on implementing different blockchains.
Other learning opportunities
Besides vendors and blockchain organizations, universities are increasingly launching blockchain qualification programs to address the escalating demand for blockchain professionals.
The future promises more Blockchain training and certifications offered by universities and various IT organizations. As the demand for skilled Blockchain professionals continues to increase, so too will salaries and opportunities for those with the technical knowledge and skills.