PHI.EXCHANGE

Anyone from a DeFI Beginner To Expert Can Now Easily Exchange, Send & Receive Cryptocurrency. PHI.EXCHANGE Is The Asset Exchange & Wallet That All Generations Love.

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Asset Storage & Transactions Made Easy. No Longer Do You Have To Worry About Private Keys & Confusing Tech Language. Now You Can Use Crypto Easier & Faster Than $Fiat.

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Protect Your Wealth From Inflation & Volatile Markets With The New Global Reserve Currency PHI (PHI).

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Buy, Send, Receive, Exchange, Deposit & Withdraw Easier Than With A Centralized Bank.

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PHI (PHI) ROADMAP

PHI.NETWORK CREATES WEB 3.0 An Additional Layer Of Value, Security & Functionality Added On Top Of The Existing Web 2.0. PHI Makes Blockchain Easy & Brings Real World Value, Privacy & Security To The World Wide Web.

PRE-PUBLIC LAUNCH

2021-03-31

Project Concept

PHINET PROVIDES THE SAME EASE OF USE OF THE WEB 2.0 WITH THE ADDED BENEFITS OF SECURITY, VALUE & SMART TECHNOLOGY.

2021-04-07

Published Whitepaper

PHI.CEO The Basic Tenet Of PHI.Network Underlines Its Commitment Towards Fair Distribution Of Finance Thus Ensuring Larger Human Welfare. Make The World A Better Place For Humanity, Build Peace, Progress & Prosperity For All Sections Of Society. PHI.Network Gives These Solutions.

2021-04-07

Platform Launch

2021-04-14

Platform Launch

PHI.NETWORK MEMBER ENROLLMENT STARTS. PHI NETWORK GROWS TO OVER 1000+ Members & 20+ Smart Applications In A Few Days.

2021-04-30

PHI (ERC20) MAINNET LAUNCH

0x2d55344bc1f72e0ccbee2d8d2eab503dedff67c8

2021-04-30

2021-05-01

UNISWAP LISTING

PHI (PHI) FIRST TRADE RECORDED ON UNISWAP FOR $935 Per PHI (PHI)

$500k+ Per (PHI)

Now

PHI (PHI) Is The Most Valuable Crypto-Currency In The World With A $5,000,000,000,000+ Market-Cap

Secure Payment, Exchange & Wallet System

PHI (PHI) Value, Security, & Smart Technology With An Intuitive User Friendly Interface.

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Frequently Asked Question

The distributed architecture of decentralized exchanges and full user control over their own funds entails a number of difficulties.

Inability to restore access: For example, due to lack of a KYC process and the ability to cancel a transaction in the event of a broken passwords or loss of a private key, the user cannot recover his or her data and return the assets. Chargeback and refund procedures are incompatible with a distributed registry. Users who have committed an operation by mistake or have lost control over their keys are not able to recover their access.

Small set of options: Many options for traders, such as stop loss, margin trading or lending, are not available for users of most DEXs. Since many decentralized exchanges are managed by smart contracts, cryptocurrencies that do not support interaction with smart contracts cannot bargain on them.

Low liquidity: Decentralized exchanges usually have a much smaller pool of liquidity compared to centralized sites. Thus, while Bitshares DEX has a daily volume of 197 BTC, the same parameter in Binance reaches 227,123 BTC.

Such a difference is caused by the fact that traders prefer centralized services, where the choice of instruments, currency pairs and orders themselves are much greater than on a DEX. As a result, the decentralized service falls into the so-called vicious circle — i.e., there are few users due to low liquidity, while the achievement of liquidity is impossible without a large number of traders.

Scalability issues: An influx of a large number of people who wish to trade cryptocurrencies will almost inevitably cause a large load on the network and may cause delays, an increase in commissions and all other problems already familiar from stories with centralized exchanges.

No support service: A decentralized exchange, by definition, cannot have a support service that can handle transactions or user accounts. When choosing such an exchange for trading digital money, the user is fully responsible for their funds and, in the event of losing a private key or sending a wrong transaction, they cannot apply for qualified assistance. The lack of advance support service also means that a dramatic increase in the number of user requests may lead to difficulties with scalability, and an operator response time may increase in the event of technical problems.

Limited speed: Transactions take time to be checked and confirmed on a blockchain, and the processing time does not depend on the exchange, but on the miners. Since DEXs are less popular than their centralized analogues, users may face difficulty finding someone to match their buy or sell orders — or with making a deal at a good price. Buying or selling new currencies or those with low trading volumes can be even more difficult.

Most of the strengths of decentralized exchanges stem from their distributed architecture and the lack of a single control center.

Security: Decentralized exchanges do not store user assets. Therefore, neither hacker attacks nor the total collapse of the exchange can lead to a loss of funds. The absence of a single entry point, through which one could gain access to all assets and data, complicates work for hackers and makes an attack meaningless in itself, which radically distinguishes decentralized exchanges from centralized ones that are regularly hacked.

Low risk of manipulation: Another advantage of this kind of service is the minimal risk of price manipulation or falsification of trade volumes, due to the absence of a central structure that is interested in manipulation inside the exchange.

There are no personal accounts on the decentralized exchange, no verification is required and there is no need to even specify an email address, so personal data of users cannot be stolen. This structure makes services based on a distributed registry more anonymous than exchanges that require personal authentication for the purposes of Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance.

Independence from regulators: The distributed architecture protects the exchange from interference by local or international authorities. In the case of a centralized structures, following regulations means that the exchange service can be either completely blocked or partially, in which case the service becomes limited in terms of location or options.

Accessibility for different projects: In contrast to its centralized brother, a decentralized exchange makes it possible not only to place orders for existing cryptocurrencies, but also to create new ones directly in the system. This allows startup projects to provide minimal liquidity, without having to pay high fees for placement on major platforms.

Centralized — users must be identified, and their coins are kept in the accounts belonging to companies. Decentralized exchanges do the exact opposite.

Centralized exchanges are managed by a specific company or a person focused on making a profit. Such exchanges are responsible for protecting user data and their trading information. They fully control the platform’s operation and independently make decisions that are important for the development of the service.

Decentralized exchanges, in contrast, are managed automatically or semi-automatically with the involvement of platform participants in the process of making important decisions. Such platforms provide the technical possibility of direct interaction between the participants and use a distributed registry for storing and processing all — or almost all — data. A decentralized exchange does not store funds or users’ personal data on its servers and serves only as a platform for finding matches for the purpose of buying or selling.

1. What is DEX? A decentralized exchange (DEX) is a peer-to-peer (p2p) online service that allows direct cryptocurrency transactions between two interested parties.

Decentralized cryptocurrency exchanges are aimed at solving problems that are inherent in centralized exchanges. They create p2p markets directly on the blockchain, which allows traders to independently store and operate funds. Users of such exchanges can make transactions with cryptocurrency directly between each other — i.e., without third-party involvement.

Decentralized services are supervised either automatically or by the participants. The safety of assets is provided by a distributed ledger technology (DLT) — in general, mostly the following blockchains are utilized for DEXs: Ethereum (EtherDelta, IDEX, etc.), Graphene (BitShares, CryptoBridge, etc.) or blockchains powered by other cryptocurrencies (Waves, Switcheo, etc.).

DeFi is short for “decentralized finance,” an umbrella term for a variety of financial applications in cryptocurrency or blockchain geared toward disrupting financial intermediaries.

DeFi draws inspiration from blockchain, the technology behind the digital currency bitcoin, which allows several entities to hold a copy of a history of transactions, meaning it isn’t controlled by a single, central source. That’s important because centralized systems and human gatekeepers can limit the speed and sophistication of transactions while offering users less direct control over their money. DeFi is distinct because it expands the use of blockchain from simple value transfer to more complex financial use cases.

Bitcoin and many other digital-native assets stand out from legacy digital payment methods, such as those run by Visa and PayPal, in that they remove all middlemen from transactions. When you pay with a credit card for coffee at a cafe, a financial institution sits between you and the business, with control over the transaction, retaining the authority to stop or pause it and record it in its private ledger. With bitcoin, those institutions are cut out of the picture.

Direct purchases aren’t the only type of transaction or contract overseen by big companies; financial applications such as loans, insurance, crowdfunding, derivatives, betting and more are also in their control. Cutting out middlemen from all kinds of transactions is one of the primary advantages of DeFi.

Before it was commonly known as decentralized finance, the idea of DeFi was often called “open finance.”

Ethereum applications Most applications that call themselves “DeFi” are built on top of Ethereum, the world’s second-largest cryptocurrency platform, which sets itself apart from the Bitcoin platform in that it’s easier to use to build other types of decentralized applications beyond simple transactions. These more complex financial use cases were even highlighted by Ethereum creator Vitalik Buterin back in 2013 in the original Ethereum white paper.

That’s because of Ethereum’s platform for smart contracts – which automatically execute transactions if certain conditions are met – offers much more flexibility. Ethereum programming languages, such as Solidity, are specifically designed for creating and deploying such smart contracts.

For example, say a user wants his or her money to be sent to a friend next Tuesday, but only if the temperature climbs above 90 degrees Fahrenheit according to weather.com. Such rules can be written in a smart contract.

With smart contracts at the core, dozens of DeFi applications are operating on Ethereum, some of which are explored below. Ethereum 2.0, a coming upgrade to Ethereum’s underlying network, could give these apps a boost by chipping away at Ethereum’s scalability issues.

The most popular types of DeFi applications include:

Decentralized exchanges (DEXs): Online exchanges help users exchange currencies for other currencies, whether U.S. dollars for bitcoin or ether for DAI. DEXs are a hot type of exchange, which connects users directly so they can trade cryptocurrencies with one another without trusting an intermediary with their money. Stablecoins: A cryptocurrency that's tied to an asset outside of cryptocurrency (the dollar or euro, for example) to stabilize the price. Lending platforms: These platforms use smart contracts to replace intermediaries such as banks that manage lending in the middle. "Wrapped" bitcoins (WBTC): A way of sending bitcoin to the Ethereum network so the bitcoin can be used directly in Ethereum's DeFi system. WBTCs allow users to earn interest on the bitcoin they lend out via the decentralized lending platforms described above. Prediction markets: Markets for betting on the outcome of future events, such as elections. The goal of DeFi versions of prediction markets is to offer the same functionality but without intermediaries. In addition to these apps, new DeFi concepts have sprung up around them:

Yield farming: For knowledgeable traders who are willing to take on risk, there's yield farming, where users scan through various DeFi tokens in search of opportunities for larger returns. Liquidity mining: When DeFi applications entice users to their platform by giving them free tokens. This has been the buzziest form of yield farming yet. Composability: DeFi apps are open source, meaning the code behind them is public for anyone to view. As such, these apps can be used to "compose" new apps with the code as building blocks. Money legos: Putting the concept "composability" another way, DeFi apps are like Legos, the toy blocks children click together to construct buildings, vehicles and so on. DeFi apps can be similarly snapped together like "money legos" to build new financial products.

Lending platforms Lending markets are one popular form of DeFi, which connects borrowers to lenders of cryptocurrencies. One popular platform, Compound, allows users to borrow cryptocurrencies or offer their own loans. Users can make money off of interest for lending out their money. Compound sets the interest rates algorithmically, so if there’s higher demand to borrow a cryptocurrency, the interest rates will be pushed higher.

DeFi lending is collateral-based, meaning in order to take out a loan, a user needs to put up collateral – often ether, the token that powers Ethereum. That means users don’t give out their identity or associated credit score to take out a loan, which is how normal, non-DeFi loans operate.

Stablecoins Another form of DeFi is the stablecoin. Cryptocurrencies often experience sharper price fluctuations than fiat, which isn’t a good quality for people who want to know how much their money will be worth a week from now. Stablecoins peg cryptocurrencies to non-cryptocurrencies, such as the U.S. dollar, in order to keep the price under control. As the name implies, stablecoins aim to bring price “stability.”

Prediction markets One of the oldest DeFi applications living on Ethereum is a so-called “prediction market,” where users bet on the outcome of some event, such as “Will Donald Trump win the 2020 presidential election?”

The goal of the participants is, obviously, to make money, though prediction markets can sometimes better predict outcomes than conventional methods, like polling. Centralized prediction markets with good track records in this regard include Intrade and PredictIt. DeFi has the potential to boost interest in prediction markets, since they are traditionally frowned upon by governments and often shut down when run in a centralized manner.

DeFi FAQ How do I make money with DeFi? The value locked up in Ethereum DeFi projects has been exploding, with many users reportedly making a lot of money.

Using Ethereum-based lending apps, as mentioned above, users can generate “passive income” by loaning out their money and generating interest from the loans. Yield farming, described above, has the potential for even larger returns, but with larger risk. It allows for users to leverage the lending aspect of DeFi to put their crypto assets to work generating the best possible returns. However, these systems tend to be complex and often lack transparency.

Is investing in DeFi safe? No, it’s risky. Many believe DeFi is the future of finance and that investing in the disruptive technology early could lead to massive gains.

But it’s difficult for newcomers to separate the good projects from the bad. And, there has been plenty of bad.

As DeFi has increased in activity and popularity through 2020, many DeFi applications, such as meme coin YAM, have crashed and burned, sending the market capitalization from $60 million to $0 in 35 minutes. Other DeFi projects, including Hotdog and Pizza, faced the same fate, and many investors lost a lot of money.

In addition, DeFi bugs are unfortunately still very common. Smart contracts are powerful, but they can’t be changed once the rules are baked into the protocol, which often makes bugs permanent and thus increasing risk.

When will DeFi go mainstream? While more and more people are being drawn to these DeFi applications, it’s hard to say where they’ll go. Much of that depends on who finds them useful and why. Many believe various DeFi projects have the potential to become the next Robinhood, drawing in hordes of new users by making financial applications more inclusive and open to those who don’t traditionally have access to such platforms.

This financial technology is new, experimental and isn’t without problems, especially with regard to security or scalability.

Developers hope to eventually rectify these problems. Ethereum 2.0 could tackle scalability concerns through a concept known as sharding, a way of splitting the underlying database into smaller pieces that are more manageable for individual users to run.

How will Ethereum 2.0 impact DeFi? Ethereum 2.0 isn’t a panacea for all of DeFi’s issues, but it’s a start. Other protocols such as Raiden and TrueBit are also in the works to further tackle Ethereum’s scalability issues.

If and when these solutions fall into place, Ethereum’s DeFi experiments will have an even better chance of becoming real products, potentially even going mainstream.

Bitcoin as DeFi While Ethereum is top dog in the DeFi world, many proponents of Bitcoin share the goal of cutting the middleman out of more complex financial transactions, and they’ve developed ways to do so using the Bitcoin protocol.

Companies such as DG Labs and Suredbits, for instance, are working on a Bitcoin DeFi technology called discreet log contracts (DLC). DLC offers a way to execute more complex financial contracts, such as derivatives, with the help of Bitcoin. One use case of DLC is to pay out bitcoin to someone only if certain future conditions are met, say, if the Chicago White Sox team win its next baseball game, the money will be dispensed to the winner.

Blockchain seems complicated, and it definitely can be, but its core concept is really quite simple. A blockchain is a type of database. To be able to understand blockchain, it helps to first understand what a database actually is.

A database is a collection of information that is stored electronically on a computer system. Information, or data, in databases is typically structured in table format to allow for easier searching and filtering for specific information. What is the difference between someone using a spreadsheet to store information rather than a database?

Spreadsheets are designed for one person, or a small group of people, to store and access limited amounts of information. In contrast, a database is designed to house significantly larger amounts of information that can be accessed, filtered, and manipulated quickly and easily by any number of users at once.

Large databases achieve this by housing data on servers that are made of powerful computers. These servers can sometimes be built using hundreds or thousands of computers in order to have the computational power and storage capacity necessary for many users to access the database simultaneously. While a spreadsheet or database may be accessible to any number of people, it is often owned by a business and managed by an appointed individual that has complete control over how it works and the data within it.

Disadvantages of Blockchain While there are significant upsides to the blockchain, there are also significant challenges to its adoption. The roadblocks to the application of blockchain technology today are not just technical. The real challenges are political and regulatory, for the most part, to say nothing of the thousands of hours (read: money) of custom software design and back-end programming required to integrate blockchain to current business networks. Here are some of the challenges standing in the way of widespread blockchain adoption.

Technology Cost Although blockchain can save users money on transaction fees, the technology is far from free. The “proof of work” system that bitcoin uses to validate transactions, for example, consumes vast amounts of computational power. In the real world, the power from the millions of computers on the bitcoin network is close to what Denmark consumes annually. Assuming electricity costs of $0.03~$0.05 per kilowatt-hour, mining costs exclusive of hardware expenses are about $5,000~$7,000 per coin.10

Despite the costs of mining bitcoin, users continue to drive up their electricity bills in order to validate transactions on the blockchain. That’s because when miners add a block to the bitcoin blockchain, they are rewarded with enough bitcoin to make their time and energy worthwhile. When it comes to blockchains that do not use cryptocurrency, however, miners will need to be paid or otherwise incentivized to validate transactions.

Some solutions to these issues are beginning to arise. For example, bitcoin mining farms have been set up to use solar power, excess natural gas from fracking sites, or power from wind farms.

Speed Inefficiency Bitcoin is a perfect case study for the possible inefficiencies of blockchain. Bitcoin’s “proof of work” system takes about ten minutes to add a new block to the blockchain. At that rate, it’s estimated that the blockchain network can only manage about seven transactions per second (TPS). Although other cryptocurrencies such as Ethereum perform better than bitcoin, they are still limited by blockchain. Legacy brand Visa, for context, can process 24,000 TPS.

Solutions to this issue have been in development for years. There are currently blockchains that are boasting over 30,000 transactions per second.

Illegal Activity While confidentiality on the blockchain network protects users from hacks and preserves privacy, it also allows for illegal trading and activity on the blockchain network. The most cited example of blockchain being used for illicit transactions is probably the Silk Road, an online “dark web” drug marketplace operating from February 2011 until October 2013 when it was shut down by the FBI.6

The website allowed users to browse the website without being tracked using the Tor browser and make illegal purchases in Bitcoin or other cryptocurrencies. Current U.S. regulations require financial service providers to obtain information about their customers when they open an account, verify the identity of each customer, and confirm that customers do not appear on any list of known or suspected terrorist organizations. This system can be seen as both a pro and a con. It gives anyone access to financial accounts but also allows criminals to more easily transact. Many have argued that the good uses of crypto, like banking the unbanked world, outweigh the bad uses of cryptocurrency, especially when most illegal activity is still accomplished through untraceable cash.

Regulation Many in the crypto space have expressed concerns about government regulation over cryptocurrencies. While it is getting increasingly difficult and near impossible to end something like Bitcoin as its decentralized network grows, governments could theoretically make it illegal to own cryptocurrencies or participate in their networks.

Over time this concern has grown smaller as large companies like PayPal begin to allow the ownership and use of cryptocurrencies on its platform.

PHI (PHI) Is an Open-source Decentralized Peer To Peer Payment System That Is Instant & Free To Transact. PHI Is the Underlying Asset Of The PHI.Network. PHI Solves The Problems Of All Previous Cryptocurrencies. PHI Blockchain Financial Technology Is Capable Of Supporting The Entire World's Transaction Volume & Market-Cap.

1) Instant Transaction Speed 2) Free Transaction Cost 3) Real World Utility & Resources 4) Privacy & Security 5) Limited Supply Of 10,000,000 6) Market-Cap Of $5+ Trillion 7) Pre-Centralized Exchanges

First proposed as a research project in 1991,7 blockchain is comfortably settling into its late twenties. Like most millennials its age, blockchain has seen its fair share of public scrutiny over the last two decades, with businesses around the world speculating about what the technology is capable of and where it’s headed in the years to come.

With many practical applications for the technology already being implemented and explored, blockchain is finally making a name for itself at age twenty-seven, in no small part because of bitcoin and cryptocurrency. As a buzzword on the tongue of every investor in the nation, blockchain stands to make business and government operations more accurate, efficient, secure, and cheap with fewer middlemen.

As we prepare to head into the third decade of blockchain, it’s no longer a question of "if" legacy companies will catch on to the technology—it's a question of "when."

Accuracy of the Chain Transactions on the blockchain network are approved by a network of thousands of computers. This removes almost all human involvement in the verification process, resulting in less human error and an accurate record of information. Even if a computer on the network were to make a computational mistake, the error would only be made to one copy of the blockchain. In order for that error to spread to the rest of the blockchain, it would need to be made by at least 51% of the network’s computers—a near impossibility for a large and growing network the size of Bitcoin’s.

Cost Reductions Typically, consumers pay a bank to verify a transaction, a notary to sign a document, or a minister to perform a marriage. Blockchain eliminates the need for third-party verification and, with it, their associated costs. Business owners incur a small fee whenever they accept payments using credit cards, for example, because banks and payment processing companies have to process those transactions. Bitcoin, on the other hand, does not have a central authority and has limited transaction fees.

Decentralization Blockchain does not store any of its information in a central location. Instead, the blockchain is copied and spread across a network of computers. Whenever a new block is added to the blockchain, every computer on the network updates its blockchain to reflect the change. By spreading that information across a network, rather than storing it in one central database, blockchain becomes more difficult to tamper with. If a copy of the blockchain fell into the hands of a hacker, only a single copy of the information, rather than the entire network, would be compromised.

Efficient Transactions Transactions placed through a central authority can take up to a few days to settle. If you attempt to deposit a check on Friday evening, for example, you may not actually see funds in your account until Monday morning. Whereas financial institutions operate during business hours, five days a week, blockchain is working 24 hours a day, seven days a week, and 365 days a year. Transactions can be completed in as little as ten minutes and can be considered secure after just a few hours. This is particularly useful for cross-border trades, which usually take much longer because of time-zone issues and the fact that all parties must confirm payment processing.

Private Transactions Many blockchain networks operate as public databases, meaning that anyone with an internet connection can view a list of the network’s transaction history. Although users can access details about transactions, they cannot access identifying information about the users making those transactions. It is a common misperception that blockchain networks like bitcoin are anonymous, when in fact they are only confidential.

That is, when a user makes public transactions, their unique code called a public key, is recorded on the blockchain, rather than their personal information. If a person has made a Bitcoin purchase on an exchange that requires identification then the person’s identity is still linked to their blockchain address, but a transaction, even when tied to a person’s name, does not reveal any personal information.

Secure Transactions Once a transaction is recorded, its authenticity must be verified by the blockchain network. Thousands of computers on the blockchain rush to confirm that the details of the purchase are correct. After a computer has validated the transaction, it is added to the blockchain block. Each block on the blockchain contains its own unique hash, along with the unique hash of the block before it. When the information on a block is edited in any way, that block’s hashcode changes—however, the hash code on the block after it would not. This discrepancy makes it extremely difficult for information on the blockchain to be changed without notice.

Transparency Most blockchains are entirely open-source software. This means that anyone and everyone can view its code. This gives auditors the ability to review cryptocurrencies like Bitcoin for security. This also means that there is no real authority on who controls Bitcoin’s code or how it is edited. Because of this, anyone can suggest changes or upgrades to the system. If a majority of the network users agree that the new version of the code with the upgrade is sound and worthwhile then Bitcoin can be updated.

Banking the Unbanked Perhaps the most profound facet of blockchain and Bitcoin is the ability for anyone, regardless of ethnicity, gender, or cultural background, to use it. According to the world bank there are nearly 2 billion adults that do not have bank accounts or any means of storing their money or wealth.5 Nearly all of these individuals live in developing countries where the economy is in its infancy and entirely dependent on cash.

These people often earn little money that is paid in physical cash. They then need to store this physical cash in hidden locations in their homes or places of living leaving them subject to robbery or unnecessary violence. Keys to a bitcoin wallet can be stored on a piece of paper, a cheap cell phone, or even memorized if necessary. For most people, it is likely that these options are more easily hidden than a small pile of cash under a mattress.

Blockchains of the future are also looking for solutions to not only be a unit of account for wealth storage, but also to store medical records, property rights, and a variety of other legal contracts.

As we now know, blocks on Bitcoin’s blockchain store data about monetary transactions. But it turns out that blockchain is actually a reliable way of storing data about other types of transactions, as well.

Some companies that have already incorporated blockchain include Walmart, Pfizer, AIG, Siemens, Unilever, and a host of others. For example, IBM has created its Food Trust blockchain1 to trace the journey that food products take to get to its locations.

Why do this? The food industry has seen countless outbreaks of e Coli, salmonella, listeria, as well as hazardous materials being accidentally introduced to foods. In the past, it has taken weeks to find the source of these outbreaks or the cause of sickness from what people are eating.

Using blockchain gives brands the ability to track a food product’s route from its origin, through each stop it makes, and finally its delivery. If a food is found to be contaminated then it can be traced all the way back through each stop to its origin. Not only that, but these companies can also now see everything else it may have come in contact with, allowing the identification of the problem to occur far sooner, potentially saving lives. This is one example of blockchains in practice, but there are many other forms of blockchain implementation.

Banking and Finance Perhaps no industry stands to benefit from integrating blockchain into its business operations more than banking. Financial institutions only operate during business hours, five days a week. That means if you try to deposit a check on Friday at 6 p.m., you will likely have to wait until Monday morning to see that money hit your account. Even if you do make your deposit during business hours, the transaction can still take one to three days to verify due to the sheer volume of transactions that banks need to settle. Blockchain, on the other hand, never sleeps.

By integrating blockchain into banks, consumers can see their transactions processed in as little as 10 minutes,2 basically the time it takes to add a block to the blockchain, regardless of holidays or the time of day or week. With blockchain, banks also have the opportunity to exchange funds between institutions more quickly and securely. In the stock trading business, for example, the settlement and clearing process can take up to three days (or longer, if trading internationally), meaning that the money and shares are frozen for that period of time.

Given the size of the sums involved, even the few days that the money is in transit can carry significant costs and risks for banks. European bank Santander and its research partners put the potential savings at $15 billion to $20 billion a year.3 Capgemini, a French consultancy, estimates that consumers could save up to $16 billion in banking and insurance fees each year4 through blockchain-based applications.

Currency Blockchain forms the bedrock for cryptocurrencies like Bitcoin. The U.S. dollar is controlled by the Federal Reserve. Under this central authority system, a user’s data and currency are technically at the whim of their bank or government. If a user’s bank is hacked, the client’s private information is at risk. If the client’s bank collapses or they live in a country with an unstable government, the value of their currency may be at risk. In 2008, some of the banks that ran out of money were bailed out partially using taxpayer money. These are the worries out of which Bitcoin was first conceived and developed.

By spreading its operations across a network of computers, blockchain allows Bitcoin and other cryptocurrencies to operate without the need for a central authority. This not only reduces risk but also eliminates many of the processing and transaction fees. It can also give those in countries with unstable currencies or financial infrastructures a more stable currency with more applications and a wider network of individuals and institutions they can do business with, both domestically and internationally.

Using cryptocurrency wallets for savings accounts or as a means of payment is especially profound for those who have no state identification. Some countries may be war-torn or have governments that lack any real infrastructure to provide identification. Citizens of such countries may not have access to savings or brokerage accounts and therefore, no way to safely store wealth.

Healthcare Health care providers can leverage blockchain to securely store their patients’ medical records. When a medical record is generated and signed, it can be written into the blockchain, which provides patients with the proof and confidence that the record cannot be changed. These personal health records could be encoded and stored on the blockchain with a private key, so that they are only accessible by certain individuals, thereby ensuring privacy.

Records of Property If you have ever spent time in your local Recorder’s Office, you will know that the process of recording property rights is both burdensome and inefficient. Today, a physical deed must be delivered to a government employee at the local recording office, where it is manually entered into the county’s central database and public index. In the case of a property dispute, claims to the property must be reconciled with the public index.

This process is not just costly and time-consuming—it is also riddled with human error, where each inaccuracy makes tracking property ownership less efficient. Blockchain has the potential to eliminate the need for scanning documents and tracking down physical files in a local recording office. If property ownership is stored and verified on the blockchain, owners can trust that their deed is accurate and permanently recorded.

In war-torn countries or areas that have little to no government or financial infrastructure, and certainly no “Recorder’s Office,” it can be nearly impossible to prove ownership of a property. If a group of people living in such an area is able to leverage blockchain, transparent and clear timelines of property ownership could be established.

Smart Contracts A smart contract is a computer code that can be built into the blockchain to facilitate, verify, or negotiate a contract agreement. Smart contracts operate under a set of conditions that users agree to. When those conditions are met, the terms of the agreement are automatically carried out.

Say, for example, a potential tenant would like to lease an apartment using a smart contract. The landlord agrees to give the tenant the door code to the apartment as soon as the tenant pays the security deposit. Both the tenant and the landlord would send their respective portions of the deal to the smart contract, which would hold onto and automatically exchange the door code for the security deposit on the date the lease begins. If the landlord doesn’t supply the door code by the lease date, the smart contract refunds the security deposit. This would eliminate the fees and processes typically associated with the use of a notary, third-party mediator, or attornies.

Supply Chains As in the IBM Food Trust example, suppliers can use blockchain to record the origins of materials that they have purchased. This would allow companies to verify the authenticity of their products, along with such common labels as “Organic,” “Local,” and “Fair Trade.”

As reported by Forbes, the food industry is increasingly adopting the use of blockchain to track the path and safety of food throughout the farm-to-user journey.

Voting As mentioned, blockchain could be used to facilitate a modern voting system. Voting with blockchain carries the potential to eliminate election fraud and boost voter turnout, as was tested in the November 2018 midterm elections in West Virginia.Using blockchain in this way would make votes nearly impossible to tamper with. The blockchain protocol would also maintain transparency in the electoral process, reducing the personnel needed to conduct an election and providing officials with nearly instant results. This would eliminate the need for recounts or any real concern that fraud might threaten the election.

Advantages and Disadvantages of Blockchain For all of its complexity, blockchain’s potential as a decentralized form of record-keeping is almost without limit. From greater user privacy and heightened security to lower processing fees and fewer errors, blockchain technology may very well see applications beyond those outlined above. But there are also some disadvantages.

Banks and decentralized blockchains are vastly different. To see how a bank differs from blockchain, let’s compare the banking system to Bitcoin’s implementation of blockchain.

Blockchain vs. Banks Feature Banks Bitcoin Hours open Typical brick-and-mortar banks are open from 9:00 am to 5:00 pm on weekdays. Some banks are open on weekends but with limited hours. All banks are closed on banking holidays. No set hours; open 24/7, 365 days a year. Transaction Fees •Card payments: This fee varies based on the card and is not paid by the user directly. Fees are paid to the payment processors by stores and are usually charged per transaction. The effect of this fee can sometimes make the cost of goods and services rise. •Checks: can cost between $1 and $30 depending on your bank. •ACH: ACH transfers can cost up to $3 when sending to external accounts. •Wire: Outgoing domestic wire transfers can cost as much as $25. Outgoing international wire transfers can cost as much as $45. Bitcoin has variable transaction fees determined by miners and users. This fee can range between $0 and $50 but users have the ability to determine how much of a fee they are willing to pay. This creates an open marketplace where if the user sets their fee too low their transaction may not be process Transaction Speed •Card payments: 24-48 hours •Checks: 24-72 hours to clear •ACH: 24-48 hours •Wire: Within 24 hours unless international *Bank transfers are typically not processed on weekends or bank holidays Bitcoin transactions can take as little as 15 minutes and as much as over an hour depending on network congestion. Know Your Customer Rules Bank accounts and other banking products require "Know Your Customer" (KYC) procedures. This means it is legally required for banks to record a customer's identification prior to opening an account. Anyone or anything can participate in Bitcoin’s network with no identification. In theory, even an entity equipped with artificial intelligence could participate. Ease of Transfers Government-issued identification, a bank account, and a mobile phone are the minimum requirements for digital transfers. An internet connection and a mobile phone are the minimum requirements. Privacy Bank account information is stored on the bank’s private servers and held by the client. Bank account privacy is limited to how secure the bank's servers are and how well the individual user secures their own information. If the bank’s servers were to be compromised then the individual's account would be as well. Bitcoin can be as private as the user wishes. All Bitcoin is traceable but it is impossible to establish who has ownership of Bitcoin if it was purchased anonymously. If Bitcoin is purchased on a KYC exchange then the Bitcoin is directly tied to the holder of the KYC exchange account. Security Assuming the client practices solid internet security measures like using secure passwords and two-factor authentication, a bank account's information is only as secure as the bank's server that contains client account information. The larger the Bitcoin network grows the more secure it gets. The level of security a Bitcoin holder has with their own Bitcoin is entirely up to them. For this reason it is recommended that people use cold storage for larger quantities of Bitcoin or any amount that is intended to be held for a long period of time. Approved Transactions Banks reserve the right to deny transactions for a variety of reasons. Banks also reserve the right to freeze accounts. If your bank notices purchases in unusual locations or for unusual items they can be denied. The Bitcoin network itself does not dictate how Bitcoin is used in any shape or form. Users can transact Bitcoin how they see fit but should also adhere to the guidelines of their country or region.

Account Seizures Due to KYC laws, governments can easily track people's banks accounts and seize the assets within them for a variety of reasons. If Bitcoin is used anonymously governments would have a hard time tracking it down to seize it.

The goal of blockchain is to allow digital information to be recorded and distributed, but not edited. Blockchain technology was first outlined in 1991 by Stuart Haber and W. Scott Stornetta, two researchers who wanted to implement a system where document timestamps could not be tampered with. But it wasn’t until almost two decades later, with the launch of Bitcoin in January 2009, that blockchain had its first real-world application.

The Bitcoin protocol is built on a blockchain. In a research paper introducing the digital currency, Bitcoin’s pseudonymous creator, Satoshi Nakamoto, referred to it as “a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”

The key thing to understand here is that Bitcoin merely uses blockchain as a means to transparently record a ledger of payments, but blockchain can, in theory, be used to immutably record any number of data points. As discussed above, this could be in the form of transactions, votes in an election, product inventories, state identifications, deeds to homes, and much more.

Currently, there is a vast variety of blockchain-based projects looking to implement blockchain in ways to help society other than just recording transactions. One good example is that of blockchain being used as a way to vote in democratic elections. The nature of blockchain’s immutability means that fraudulent voting would become far more difficult to occur.

For example, a voting system could work such that each citizen of a country would be issued a single cryptocurrency or token. Each candidate would then be given a specific wallet address, and the voters would send their token or crypto to whichever candidate's address they wish to vote for. The transparent and traceable nature of blockchain would eliminate the need for human vote counting as well as the ability of bad actors to tamper with physical ballots.

Blockchain technology accounts for the issues of security and trust in several ways. First, new blocks are always stored linearly and chronologically. That is, they are always added to the “end” of the blockchain. If you take a look at Bitcoin’s blockchain, you’ll see that each block has a position on the chain, called a “height.” As of November 2020, the block’s height had reached 656,197 blocks so far.

After a block has been added to the end of the blockchain, it is very difficult to go back and alter the contents of the block unless the majority reached a consensus to do so. That’s because each block contains its own hash, along with the hash of the block before it, as well as the previously mentioned time stamp. Hash codes are created by a math function that turns digital information into a string of numbers and letters. If that information is edited in any way, the hash code changes as well.

Here’s why that’s important to security. Let’s say a hacker wants to alter the blockchain and steal Bitcoin from everyone else. If they were to alter their own single copy, it would no longer align with everyone else's copy. When everyone else cross-references their copies against each other, they would see this one copy stand out and that hacker's version of the chain would be cast away as illegitimate.

Succeeding with such a hack would require that the hacker simultaneously control and alter 51% of the copies of the blockchain so that their new copy becomes the majority copy and thus, the agreed-upon chain. Such an attack would also require an immense amount of money and resources as they would need to redo all of the blocks because they would now have different timestamps and hash codes.

Due to the size of Bitcoin’s network and how fast it is growing, the cost to pull off such a feat would probably be insurmountable. Not only would this be extremely expensive, but it would also likely be fruitless. Doing such a thing would not go unnoticed, as network members would see such drastic alterations to the blockchain. The network members would then fork off to a new version of the chain that has not been affected.

This would cause the attacked version of Bitcoin to plummet in value, making the attack ultimately pointless as the bad actor has control of a worthless asset. The same would occur if the bad actor were to attack the new fork of Bitcoin. It is built this way so that taking part in the network is far more economically incentivized than attacking it.

Storage Structure One key difference between a typical database and a blockchain is the way the data is structured. A blockchain collects information together in groups, also known as blocks, that hold sets of information. Blocks have certain storage capacities and, when filled, are chained onto the previously filled block, forming a chain of data known as the “blockchain.” All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled.

A database structures its data into tables whereas a blockchain, like its name implies, structures its data into chunks (blocks) that are chained together. This makes it so that all blockchains are databases but not all databases are blockchains. This system also inherently makes an irreversible timeline of data when implemented in a decentralized nature. When a block is filled it is set in stone and becomes a part of this timeline. Each block in the chain is given an exact timestamp when it is added to the chain.

Transaction Process Blockchain Attributes of Cryptocurrency Blockchain Decentralization For the purpose of understanding blockchain, it is instructive to view it in the context of how it has been implemented by Bitcoin. Like a database, Bitcoin needs a collection of computers to store its blockchain. For Bitcoin, this blockchain is just a specific type of database that stores every Bitcoin transaction ever made. In Bitcoin’s case, and unlike most databases, these computers are not all under one roof, and each computer or group of computers is operated by a unique individual or group of individuals.

Imagine that a company owns a server comprised of 10,000 computers with a database holding all of its client's account information. This company has a warehouse containing all of these computers under one roof and has full control of each of these computers and all the information contained within them. Similarly, Bitcoin consists of thousands of computers, but each computer or group of computers that hold its blockchain is in a different geographic location and they are all operated by separate individuals or groups of people. These computers that makeup Bitcoin’s network are called nodes.

In this model, Bitcoin’s blockchain is used in a decentralized way. However, private, centralized blockchains, where the computers that make up its network are owned and operated by a single entity, do exist.

In a blockchain, each node has a full record of the data that has been stored on the blockchain since its inception. For Bitcoin, the data is the entire history of all Bitcoin transactions. If one node has an error in its data it can use the thousands of other nodes as a reference point to correct itself. This way, no one node within the network can alter information held within it. Because of this, the history of transactions in each block that make up Bitcoin’s blockchain is irreversible.

If one user tampers with Bitcoin’s record of transactions, all other nodes would cross-reference each other and easily pinpoint the node with the incorrect information. This system helps to establish an exact and transparent order of events. For Bitcoin, this information is a list of transactions, but it also is possible for a blockchain to hold a variety of information like legal contracts, state identifications, or a company’s product inventory.

In order to change how that system works, or the information stored within it, a majority of the decentralized network’s computing power would need to agree on said changes. This ensures that whatever changes do occur are in the best interests of the majority.

Transparency Because of the decentralized nature of Bitcoin’s blockchain, all transactions can be transparently viewed by either having a personal node or by using blockchain explorers that allow anyone to see transactions occurring live. Each node has its own copy of the chain that gets updated as fresh blocks are confirmed and added. This means that if you wanted to, you could track Bitcoin wherever it goes.

For example, exchanges have been hacked in the past where those who held Bitcoin on the exchange lost everything. While the hacker may be entirely anonymous, the Bitcoins that they extracted are easily traceable. If the Bitcoins that were stolen in some of these hacks were to be moved or spent somewhere, it would be known.

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