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Blockchain: Fortifying Identity, Finance, and Privacy

The Power of Blockchain Technology

Blockchain technology has emerged as a game-changer in the digital landscape, transforming the way we manage identity, finance, and privacy. At its core, blockchain is a decentralized, immutable, and transparent ledger that enables secure and instant transactions without the need for intermediaries or centralized authorities. This revolutionary technology has the potential to disrupt traditional industries, boost innovation, and empower individuals and communities.

In this article, we will explore how blockchain is fortifying identity, finance, and privacy, and its real-world applications, challenges, and future prospects. We will also discuss the legal, cybersecurity, and social impact implications of blockchain, and how it can contribute to a more equitable and sustainable world.

Blockchain and Identity: A New Era of Digital Identity Management

Identity is a fundamental aspect of our lives, both online and offline. However, traditional identity management systems are often fragmented, insecure, and vulnerable to data breaches and identity theft. Blockchain offers a new paradigm for digital identity management, based on decentralized and self-sovereign identity (SSI) principles.

SSI allows individuals to own, control, and share their identity information securely and selectively, without relying on third-party intermediaries or central authorities. By using blockchain-based identity solutions, individuals can authenticate themselves seamlessly, access services and resources, and protect their privacy and security.

For instance, the Sovrin Network provides a decentralized identity infrastructure that enables trusted and verifiable digital identities, based on open standards and interoperability. Other blockchain-based identity platforms include uPort, Civic, and SelfKey, which offer similar features and benefits.

Blockchain and Finance: Towards a More Transparent and Secure Financial System

Finance is another area where blockchain is making significant strides, by enabling more transparent, efficient, and secure transactions. Blockchain-based finance, also known as decentralized finance (DeFi), is a rapidly growing ecosystem that offers a range of financial services, such as lending, borrowing, trading, and investing, without relying on traditional intermediaries or centralized authorities.

DeFi leverages blockchain’s features, such as smart contracts, tokenization, and interoperability, to provide more accessible and inclusive financial services, especially for underserved and unbanked populations. For example, stablecoins, which are blockchain-based digital currencies pegged to traditional assets, can provide a stable store of value and a more reliable means of exchange, especially in volatile markets.

Other DeFi applications include decentralized exchanges (DEXs), which allow peer-to-peer trading of digital assets without intermediaries, and yield farming, which enables users to earn interest on their crypto holdings by providing liquidity to DeFi protocols. However, DeFi is not without risks, such as smart contract vulnerabilities, liquidity issues, and regulatory challenges.

Blockchain and Privacy: Protecting Personal Data in a Decentralized World

Privacy is a critical aspect of digital life, as it enables individuals to control their personal information and prevent unauthorized access, misuse, or exploitation. However, traditional privacy solutions, such as centralized databases or encryption, have limitations and vulnerabilities that can be exploited by cybercriminals or surveillance agencies.

Blockchain offers a new approach to privacy, based on cryptographic techniques and distributed storage. By using blockchain-based privacy solutions, individuals can protect their data from unauthorized access, maintain anonymity, and ensure data integrity and immutability.

For example, zero-knowledge proofs (ZKPs) are cryptographic protocols that enable parties to prove the validity of a statement without revealing any additional information. ZKPs can be used to authenticate identities, verify transactions, and protect sensitive data without compromising privacy.

Other blockchain-based privacy solutions include homomorphic encryption, ring signatures, and multi-party computation, which offer different levels of privacy and security. However, privacy is not absolute, and there are trade-offs between privacy, usability, and scalability.

How Blockchain Works: The Fundamentals of Distributed Ledgers and Cryptography

To understand how blockchain works, we need to delve into its fundamental principles and components. At its core, blockchain is a distributed ledger that maintains a record of transactions, verified by a network of nodes, without the need for trust or intermediaries.

Each block in the blockchain contains a cryptographic hash of the previous block, creating an immutable and tamper-evident chain of blocks. Transactions are validated and added to the blockchain through consensus mechanisms, such as proof-of-work (PoW) or proof-of-stake (PoS), which incentivize nodes to contribute computing power and verify transactions.

Blockchain also relies on various cryptographic techniques, such as public-key cryptography, hash functions, and digital signatures, to ensure data confidentiality, integrity, and authenticity. These techniques enable secure and transparent transactions, without revealing sensitive information or compromising privacy.

Blockchain technology is not limited to cryptocurrency transactions, but can also be applied to various use cases, such as supply chain management, voting systems, and intellectual property management.

Blockchain Use Cases: Real-World Examples of Blockchain Applications

Blockchain has already demonstrated its potential to transform various industries and domains, from finance and identity to healthcare and energy. Some notable blockchain use cases include:

  • Supply chain management: Blockchain can provide end-to-end visibility and traceability of products, from raw materials to distribution, ensuring authenticity, quality, and compliance.
  • Healthcare: Blockchain can enable secure and interoperable sharing of patient data, as well as tracking of medical supplies and drugs, reducing errors, fraud, and inefficiencies.
  • Energy: Blockchain can facilitate peer-to-peer energy trading, renewable energy certificates, and carbon credits, enabling more sustainable and decentralized energy systems.
  • Gaming: Blockchain can enable secure and transparent ownership, transfer, and trading of in-game assets, as well as provably fair gaming outcomes, enhancing player experience and trust.

These are just a few examples of how blockchain is disrupting traditional industries and enabling new business models and opportunities.

Blockchain Challenges: Overcoming Scalability, Interoperability, and Adoption Hurdles

Despite its potential and benefits, blockchain also faces various challenges and limitations that hinder its widespread adoption and scalability. Some of these challenges include:

  • Scalability: Blockchain’s limited processing power and storage capacity can limit its throughput and transaction speed, especially for large-scale applications.
  • Interoperability: Blockchain’s fragmentation and lack of standardization can hinder its compatibility and integration with other systems and platforms, causing data silos and inefficiencies.
  • Adoption: Blockchain’s complexity and unfamiliarity can deter users and organizations from adopting it, especially in regulated industries or conservative environments.

To overcome these challenges, blockchain developers and researchers are exploring various solutions, such as sharding, sidechains, and interoperability protocols, as well as user-friendly interfaces and educational resources.

The Future of Blockchain: Beyond Cryptocurrencies and Initial Coin Offerings

Blockchain is still at an early stage of development, and its potential is far from fully realized. In the future, blockchain is likely to evolve and expand beyond its current applications and use cases, enabling new forms of value creation, governance, and social impact.

Some possible future developments of blockchain technology include:

  • Decentralized autonomous organizations (DAOs): DAOs are organizations that operate on blockchain-based smart contracts and are governed by their members. DAOs can enable more transparent and democratic decision-making, as well as more efficient and resilient organizations.
  • Internet of Things (IoT): Blockchain can provide secure and decentralized communication and data sharing among IoT devices, enabling more efficient and trustworthy IoT applications, such as smart homes, cities, and factories.
  • Artificial intelligence (AI): Blockchain can enable more secure and transparent training, validation, and deployment of AI models, as well as more accountable and ethical AI systems.

These are just some of the potential future applications of blockchain technology, and the possibilities are limited only by our imagination and creativity.

Blockchain Regulation: Navigating the Legal Landscape of Digital Assets

Blockchain’s decentralized and borderless nature poses significant challenges for regulatory frameworks and compliance measures. However, blockchain also offers opportunities for more efficient and effective regulation, based on transparency, accountability, and innovation.

The regulation of blockchain and digital assets varies across countries and jurisdictions, reflecting different legal, cultural, and economic contexts. Some countries, such as Malta, Switzerland, and Singapore, have adopted blockchain-friendly regulatory frameworks and attracted blockchain startups and investments.

Other countries, such as China and India, have adopted more restrictive policies and regulations, limiting the growth of blockchain and digital assets. However, the global trend is towards more regulatory clarity and convergence, as blockchain becomes more mainstream and recognized as a legitimate technology and asset class.

Blockchain and Cybersecurity: Enhancing Data Protection and Threat Detection

Cybersecurity is a critical aspect of blockchain, as it enables secure and trustworthy transactions and protects users from various threats, such as hacking, phishing, and malware. However, blockchain itself is not immune to cybersecurity risks and vulnerabilities, such as 51% attacks, smart contract bugs, and social engineering.

To enhance blockchain cybersecurity, various measures and solutions are being developed and deployed, such as:

  • Multi-factor authentication: This requires multiple forms of authentication, such as passwords, biometrics, and tokens, to access blockchain accounts and wallets.
  • Cold storage: This refers to storing cryptocurrencies and assets offline, in physical devices or paper wallets, to reduce the risk of online attacks.
  • Anti-money laundering (AML) and know-your-customer (KYC) regulations: These require blockchain-based businesses and exchanges to verify the identity and source of funds of their users, to prevent money laundering and terrorism financing.
  • Cyber threat intelligence (CTI): This involves collecting and analyzing data on cyber threats and vulnerabilities, to proactively detect and prevent attacks on blockchain networks and applications.

Blockchain and Social Impact: Empowering Communities and Reducing Inequality

Blockchain has the potential to contribute to social impact and sustainability goals, by enabling more democratic, transparent, and inclusive systems and applications. Blockchain-based solutions can empower marginalized communities, reduce inequalities, and promote social innovation and entrepreneurship.

For example, blockchain can enable:

  • Financial inclusion: Blockchain-based financial services, such as microlending, can provide access to capital for underserved and unbanked populations, reducing poverty and inequality.
  • Digital
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Tokenizing Virtual Identity: Blockchain & AI’s Inevitable Impact

Tokenizing Virtual Identity

Tokenizing virtual identity is the latest buzzword in the world of technology. With the rise of blockchain and AI, the process of tokenizing virtual identity has become more feasible and efficient. In a world that is increasingly dependent on digital communication and transactions, virtual identity has become an essential aspect of our lives. From social media to online banking, virtual identity is crucial for individuals and organizations alike. This article explores the inevitable impact of blockchain and AI on tokenizing virtual identity.

What is Blockchain and AI?

To understand the role of blockchain and AI in tokenizing virtual identity, we need to first understand what these technologies are. Blockchain is a decentralized and distributed digital ledger that records transactions across multiple computers, allowing secure and transparent storage of data. AI, on the other hand, refers to the simulation of human intelligence in machines that can perform tasks that typically require human cognition, such as learning, reasoning, and problem-solving.

The Benefits of Tokenizing Virtual Identity

Tokenizing virtual identity offers several benefits. Firstly, it provides a higher degree of security than traditional identity management systems, as it is based on cryptography and decentralized storage. Secondly, it offers greater control and ownership of personal data, allowing individuals to manage and monetize their identity. Thirdly, it offers greater efficiency by reducing the need for intermediaries and streamlining identity verification processes.

The Role of Blockchain in Tokenizing Identity

Blockchain plays a crucial role in tokenizing virtual identity. By providing a decentralized and secure platform for storing and managing identity data, blockchain ensures that personal data is owned and controlled by individuals, rather than centralized institutions. Blockchain also enables the creation of self-sovereign identities, where individuals have complete control over their identity data and can share it securely with trusted parties.

The Role of AI in Tokenizing Identity

AI plays a crucial role in tokenizing virtual identity by automating identity verification processes. By leveraging machine learning algorithms, AI can analyze large volumes of data and make intelligent decisions about identity verification. This can help reduce the risk of fraud and improve the efficiency of identity verification processes.

Tokenizing Virtual Identity: Use Cases

Tokenizing virtual identity has several use cases. For example, it can be used for secure and decentralized voting systems, where individuals can verify their identity and cast their vote securely and anonymously. It can also be used for secure and decentralized identity verification for financial and healthcare services, reducing the risk of identity theft and fraud.

Tokenizing Virtual Identity: Challenges

Tokenizing virtual identity also presents several challenges. One of the main challenges is interoperability, as different blockchain networks and AI systems may not be compatible with each other. Another challenge is scalability, as blockchain and AI systems may not be able to handle the volume of data required for identity verification on a large scale.

Security Concerns in Tokenizing Identity

Security is a key concern in tokenizing virtual identity. While blockchain and AI offer greater security than traditional identity management systems, they are not immune to attacks. Hackers could potentially exploit vulnerabilities in blockchain and AI systems to gain access to personal data. It is therefore crucial to implement robust security measures to protect personal data.

Privacy Issues in Tokenizing Identity

Privacy is another key concern in tokenizing virtual identity. While tokenizing virtual identity offers greater control and ownership of personal data, it also raises concerns about data privacy. It is essential to ensure that personal data is not shared without consent and that individuals have the right to access, modify, and delete their data.

Legal Implications of Tokenizing Identity

Tokenizing virtual identity also has legal implications. As personal data becomes more valuable, it is crucial to ensure that there are adequate laws and regulations in place to protect personal data. It is also essential to ensure that individuals have the right to access and control their data, and that they are not discriminated against based on their identity.

The Future of Tokenizing Virtual Identity

The future of tokenizing virtual identity looks bright. As blockchain and AI continue to evolve, we can expect to see more secure, efficient, and decentralized identity management systems. We can also expect to see more use cases for tokenizing virtual identity, from secure and anonymous voting systems to decentralized identity verification for financial and healthcare services.

Embracing Blockchain & AI for Identity Management

In conclusion, tokenizing virtual identity is an inevitable trend that will revolutionize the way we manage identity. By leveraging blockchain and AI, we can create more secure, efficient, and decentralized identity management systems that give individuals greater control and ownership of their personal data. While there are challenges and concerns associated with tokenizing virtual identity, these can be addressed through robust security measures, privacy protections, and adequate laws and regulations. As we continue to embrace blockchain and AI for identity management, we can look forward to a more secure, efficient, and decentralized future.

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Building Digital Integrity: The Role of Blockchain in Virtual Identity

Virtual Identity and Digital Integrity

In today’s digital age, virtual identity has become an integral part of our online existence. It is the representation of who we are in the digital world, and it plays a significant role in our interactions with the online community. However, the growing concern of identity theft and data breaches highlights the need for a secure and reliable system to manage virtual identity. Blockchain technology has emerged as a potential solution to these challenges, offering a secure and decentralized platform for identity management. In this article, we will explore the role of blockchain in virtual identity and its impact on digital integrity.

Understanding the Blockchain Technology

Blockchain technology is a distributed ledger that provides a secure and transparent system for recording transactions. It is a decentralized system that operates on a peer-to-peer network, eliminating the need for a central authority to govern the transactions. Each block in the chain is linked to the previous block, creating an unalterable record of all the transactions. The security of the blockchain lies in its consensus mechanism, which ensures that all network participants agree on the validity of each transaction.

The Role of Blockchain in Identity Management

Blockchain technology offers a secure and decentralized platform for identity management, enabling individuals to have greater control over their personal data. Instead of relying on central authorities to manage identity, blockchain allows individuals to create and manage their own digital identities. This eliminates the need for third-party authentication, providing a more secure and efficient system for identity verification.

Safeguarding Personal Data with Blockchain

Blockchain technology provides a secure platform for storing and sharing personal data. The decentralization of the blockchain ensures that there is no single point of failure, making it difficult for hackers to breach the system. The use of encryption algorithms further enhances the security of the data, ensuring that only authorized individuals can access it.

The Benefits of Blockchain for Digital Integrity

Blockchain technology has the potential to revolutionize the way we manage digital identities, offering several benefits for digital integrity. Firstly, it provides a secure and decentralized platform for identity management, eliminating the need for third-party authentication. Secondly, it ensures the security of personal data, safeguarding against data breaches and identity theft. Thirdly, it provides greater transparency and accountability, enabling individuals to have greater control over their data.

Blockchain and Biometric Authentication

Blockchain technology can also be used for biometric authentication, providing an additional layer of security for identity management. Biometric authentication uses unique biological characteristics such as fingerprints and facial recognition to verify identity. By combining biometric authentication with blockchain, we can create a more secure and efficient system for identity verification.

The Future of Digital Identity with Blockchain

The future of digital identity is closely linked to the development of blockchain technology. With the increasing use of blockchain in identity management, we can expect to see a more secure and efficient system for managing virtual identity. The use of biometric authentication and encryption algorithms will further enhance the security of the system, providing a reliable platform for managing personal data.

Overcoming the Challenges of Blockchain Implementation

The implementation of blockchain technology presents several challenges, including scalability, interoperability and regulatory issues. Scalability is a major challenge for blockchain, as the system needs to be able to handle a large number of transactions. Interoperability is also a challenge, as different blockchain networks may not be compatible with each other. Regulatory issues also need to be addressed, as the use of blockchain in identity management raises several legal and ethical concerns.

Regulatory Frameworks for Blockchain and Virtual Identity

Regulatory frameworks for blockchain and virtual identity are still in the early stages of development. However, several initiatives have been launched to address the legal and ethical issues surrounding blockchain technology. The EU’s General Data Protection Regulation (GDPR) and the US’s National Institute of Standards and Technology (NIST) are two examples of regulatory frameworks that aim to promote the responsible use of blockchain in identity management.

Use Cases of Blockchain in Virtual Identity

Blockchain technology has several use cases in virtual identity, including digital identity management, biometric authentication, and secure data storage. The use of blockchain in virtual identity can also be extended to other applications, such as healthcare, finance, and e-commerce.

Conclusion: The Path Towards Digital Integrity

Blockchain technology has the potential to transform the way we manage virtual identity and promote digital integrity. By providing a secure and decentralized platform for identity management, blockchain can eliminate the need for third-party authentication, safeguard personal data, and enhance transparency and accountability. While there are still challenges to overcome, the future of digital identity looks promising with the use of blockchain technology.

References and Further Reading

  • Böhme, R., Christin, N., Edelman, B., & Moore, T. (2015). Bitcoin: Economics, technology, and governance. Journal of Economic Perspectives, 29(2), 213-238.
  • Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. Retrieved from
  • Swan, M. (2015). Blockchain: Blueprint for a new economy. Sebastopol, CA: O’Reilly Media.
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What is blockchain ?

Even if you only have a passing interest in cryptocurrencies, there are a couple of terms that you’re still likely to have come across.
The first is ‘Bitcoin’. This is the oldest and best-known of the many hundreds of cryptocurrencies that now exist.
With a market capitalisation of £690 billion (28 March 2022), it’s also the largest in terms of the value of digital ‘coins’ in circulation. You can find out more here about Bitcoin and its largest rivals.
The second term is ‘blockchain’. This is an important component at the heart of nearly all cryptocurrencies.
But what actually is blockchain? Here’s what you need to know.

What is blockchain?

It’s a form of technology - specifically, the database technology that underpins nearly all cryptocurrencies. Think of it as a database distributed across millions of computers via a worldwide network. In this context, these computers are often referred to as ‘nodes’.

By distributing identical copies of a database across an entire network, blockchain makes it hard to hack or cheat the system. And while cryptocurrency is currently the most popular use for blockchain technology, there is potential for it to serve a wide range of applications.

At its heart, blockchain is a distributed digital ledger that stores data of any kind. For example, a blockchain can record information about cryptocurrency transactions, or the ownership of Non-Fungible Tokens (NFTs), a form of digital asset that represent real-world objects, such as unique works of art.

Blockchain has also been used as a digital ledger to verify and track the provenance, characteristics and history of diamonds.

Any conventional database can store the sort of information outlined in the examples above. But the blockchain is unique in that it’s decentralised. Rather than being maintained in one place, numerous identical copies of a blockchain database are held on multiple computers spread around a network.

How blockchain works

The digital ledger referred to earlier is described as a ‘chain’ composed of individual ‘blocks’ of data. As fresh data gets added to the network, a new block is created and is linked into the chain.

To remain identical, all the nodes (computers) are required to update their version of the blockchain ledger. The way new blocks are created underpins why blockchain is regarded as highly secure.

That’s because a majority of nodes must verify and confirm the legitimacy of the new data before a new block can be added to the ledger. For cryptocurrency, this might involve ensuring that new transactions in a block were not fraudulent, or that coins had not been spent more than once.

This is different from a standalone database or spreadsheet, where changes to a single version can be made without qualification.

Once consensus has been reached, the block is added to the chain with the underlying transactions recorded in the distributed ledger. Blocks are securely linked together, forming a secure digital chain from the beginning of the ledger to the last addition.

As a reward for their efforts in validating changes to the shared data, nodes are usually given new amounts of the blockchain’s native currency.

Two types of blockchain

Blockchains exist in both private and public formats. Anyone can take part in a public blockchain, which means they can read, write or audit the data on the blockchain in question. Because no single entity controls the nodes, it’s difficult to change the transactions logged within a public blockchain.

In contrast, a private blockchain is controlled by an organisation or group. The group decides who gets invited on to the system and it also has the authority to alter the blockchain. A private blockchain is more akin to an in-house data storage system that’s spread over multiple nodes to enhance security.

Blockchain and its uses

Blockchain technology has been put to use for a variety of purposes, from providing financial services to administering voting systems.


Blockchain was created in 2008 as the technology behind Bitcoin, the first cryptocurrency. The brains behind Bitcoin’s creation was the anonymous Satoshi Nakamato, either an individual or group of people, who initially published a paper on the cryptocurrency as well as designing it.

Nowadays, blockchain technology is most commonly associated with cryptocurrencies, such as Bitcoin and Ethereum. When people buy, exchange or spend cryptocurrencies the transactions are registered on a blockchain.


In addition to cryptocurrencies, blockchain is also being used to process transactions in traditional currencies, such as pounds, dollars and euros. This can be faster than traditional methods that involve sending money through a bank, or other financial institution, because the transactions can be verified faster and processed outside normal business hours.

Asset transfers

Blockchain can also be used to record and transfer the ownership of different assets. This is popular with digital assets such as NFTs.

Blockchain could also potentially be used to transact the ownership of real-life assets, such as the deeds to property.

With a property transaction, for example, both seller and buyer could use the blockchain to satisfy their respective obligations in the sales process – from verifying ownership rights, to completing and recording the sale. All this could be done without the need to manually submit paperwork to update land registration records.

Smart contracts

A different blockchain innovation concerns self-executing legal contracts, also referred to as ‘smart contracts’.

Digital contracts such as these would kick into action automatically when certain conditions are all satisfied. For example, a payment might be released instantly once a buyer and seller have met all specified parameters relating to a deal.

Supply chain monitoring

When they’re not being hampered by the pandemic, supply chains typically involve large amounts of information, especially when goods are being manufactured and then transported around the world. Traditional data storage methods can find it difficult tracing the source of problems. For example, in the case of a vendor responsible for poor quality goods.

Storing supply data information on blockchain can make it easier to monitor which goods have come from certain sources.

For example, IBM’s Food Trust is a collaborative network of growers, processors, distributors, manufacturers and retailers that uses blockchain technology to record food provenance, transaction data and processing details.


Blockchain could also potentially be used to prevent fraud in voting by allowing people to submit votes that couldn’t be tampered with.

Advantages of blockchain

Improves the accuracy of transactions

Blockchain transactions are verified by multiple nodes which helps to reduce mistakes. If one node contains an error in the database, the others ought to see that it’s different and pick up on the mistake.

This contrasts starkly with the way a traditional database works, where an error made by an individual is more likely to slip through the net. In addition, every asset is individually identified and tracked on the blockchain ledger. This eliminates the chance of assets being accounted for twice.

Makes intermediaries redundant

Two parties using blockchain can confirm and complete a transaction without needing a third party to facilitate the process. This can save time and reduce costs. For example, by not requiring an institution like a bank to act as an intermediary within a sales process.


Theoretically, a decentralised network like blockchain should make it almost impossible for someone to make fraudulent transactions.

To forge a transaction, every node would need to be hacked and every ledger altered. While this isn’t necessarily impossible, many cryptocurrency blockchain systems use ‘proof-of-stake’ or ‘proof-of-work’ transaction verification methods that make it difficult – and not in a participant’s best interests – to add fraudulent transactions.

Efficient transfers

Blockchain works 24/7 enabling people to make financial transactions and asset transfers more efficiently and without the need for a third-party, such as a bank or other overseeing organisation (such as a government department), to ratify the process.

Disadvantages of blockchain

Time limits on transactions

Given that blockchain depends on a larger network to approve transactions, there’s a limit to how quickly it can move. What’s more, increasing numbers of transactions create network speed issues. Scalability is therefore a challenge until this situation improves.

Energy costs

With all the nodes working to verify transactions, the process takes up significantly more energy than a solo database or spreadsheet - a not insignificant consideration during these times of sky-high electricity prices.

Risk of asset loss

Some digital assets are secured using a cryptographic key, such as cryptocurrency held within a blockchain wallet. In any decentralised system, keys need to be guarded carefully. That’s because if the owner of a digital asset lost his/her key, there is no way it could be recovered, with the asset potentially being lost forever.

Illegal activity

Blockchain’s decentralisation adds a layer of privacy and confidentiality which makes it appealing to criminals. It’s trickier to track illicit transactions on blockchain than through banks, where accounts are tied to a name.

Can I invest in blockchain?

Not, as such, no. This is because it’s just a system for storing and procession transactions. You can, however, invest in assets and companies that make use of this technology.

The easiest way is buying cryptocurrencies like Bitcoin and Ethereum and other tokens that run on blockchain. Read more here about how to buy cryptocurrencies.

Note, however, that investing in cryptocurrencies is not for everyone. The UK’s financial watchdog, the Financial Conduct Authority, reminds would-be traders that cryptoassets are unregulated and high-risk adding that people are “ very unlikely to have any protection if things go wrong, so people should be prepared to lose all their money if they choose to invest in them”.

Another option is to invest in companies that make use of blockchain. In 2019, for example, Banco Santander announced it had issued what it claimed to be the first $20 million “end-to-end blockchain bond”.

Looking to the future

To some, blockchain remains a niche technology, akin to the early days of the internet. Others believe blockchain technology is making significant progress in development and adoption – with no signs of slowing down.

For example, according to Deloitte’s 2021 Global Blockchain survey, blockchain’s “applicability to myriad industries and applications is now a foregone conclusion, spurring the rapid evolution of digital assets”.

In recent years, some governments – including the UK – have experimented with blockchain technology in a variety of ways including land registration, welfare benefits, healthcare, procurement, food supply chains and identity management.

A combination of these developments, including blockchain’s potential scalability across numerous sectors, means there’s every possibility the technology will soon transform the ways we transact and interact with each other.

Andrew Michael


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How to build a decentralized token bridge between Ethereum and Binance Smart Chain?


The advent of blockchain bridges has made blockchain a more mainstream technology. Bridging solutions also aid the DeFi applications design that empowers the prospectus of a decentralized and financial system. By enabling connections between different blockchains or working together, blockchain bridges help users head towards the next-generation decentralized system. Thus, it aims to end the sovereignty of the centralized system from the business ecosystem. However, blockchain plans to bring about many new paradigms to reinvent the existing bridges and promote greater innovation and technological relevance.


Blockchain technology keeps evolving, and it has been changed significantly since 2008 when Satoshi Nakamoto introduced the first cryptocurrency, Bitcoin, to the world. Bitcoin brought along blockchain technology. Since then, multiple blockchain platforms have been launched. Every blockchain has unique features and functionality to fill the gap between blockchain technology and its real-world implications. Notwithstanding the amazing benefits of the blockchain, such as its decentralized nature, the immutability of records, distributed ledger, and smart contract technology, a major hurdle still affects blockchain’s mass adoption, which is the lack of interoperability.

Although public blockchains maintain transparency in the on-chain data, their siloed nature limits the holistic utilization of blockchain in decentralized finance and many other industries. Blockchains have unique capabilities that users often want to utilize together. However, that doesn’t seem possible since these blockchains work independently on their isolated ecosystem and abide by their own unique consensus rules. Independent blockchains can’t interact with each other to exchange information or value.

This interoperability issue becomes critical due to the expanding blockchain networks and more DeFi projects going cross-chain. Meanwhile, such siloed nature of blockchain contradicts the core principle of decentralization, which revolves around making blockchain accessible for everyone. Is there any solution to this lack of interoperability? How can someone from the Ethereum network access the data and resources available on a different blockchain like Binance? That’s where bridging solutions or blockchain bridges make a move.

Let’s explore the bridging solutions and their working mechanisms in this article. In addition, we will also learn to build a decentralized token bridge between Ethereum and Binance Smart Chain are two popular blockchains for DeFi development.

What are blockchain bridges?

A blockchain bridge enables interoperability and connectivity between two unique blockchains that operate under different consensus mechanisms. More clearly put, blockchain bridges allow two different blockchains to interact with each other. Blockchains can share smart contract execution instructions, transfer tokens, and share data & resources back and forth between two independent blockchains as they no longer remain limited by their origin. These blockchains can even access the off-chain data, such as access to the live chart of the stock market. Some of the widely used blockchain bridges are xPollinate, Matic Bridge, Binance Bridge. Blockchain bridges provide the following benefits to the users:

  • Users can leverage the benefits of two separate blockchains to create dApps instead of only from the hosted blockchain. It means a user can deploy dApp on Solana and can power the dApp with Ethereum’s smart contract technology.
  • Users can transfer tokens from a blockchain that charges high transaction costs to another blockchain where transaction costs are comparatively cheaper.
  • With the ability to transfer tokens instantly, users can shift from a volatile cryptocurrency to Stablecoins quickly without taking the help of an intermediary.
  • One can also host digital assets on a decentralized application of a different blockchain. For example, one can create NFTs on the Cardano blockchain and host them on the Ethereum marketplace.
  • Bridging allows users to execute dAPPs across multiple blockchain ecosystems.

What are the Types of Blockchain Bridges?

To understand how blockchain bridges work, we first need to know how many types exist. Currently, two types of blockchain bridges are present; a federated bridge and a trustless bridge. Now, let’s understand their working mechanism.

Federated bridge

A federated bridge is also known as a centralized bridge. It is essentially a kind of centralized exchange where the users interact with a pool that can sometimes be a company or a middleman. If the token transfer occurs for Ether and BNB, there will be two large pools; one containing BNB and another containing Ether. As soon as the sender initiates the transfer with Ether, it gets added to the pool, and the pool sends him an equivalent amount of BNB out of the second pool. The centralized authority charges a small fee to regulate this process. However, the fee is a small amount that users can pay conveniently.

Trustless bridge

These are the purely decentralized bridge that eliminates the role of any third party. Trustless blockchain bridges don’t even use API to administer the process of burning and minting the token. Instead, smart contract plays a key role here. When a user initiates the token transfer through the trustless bridge, the smart contract freezes his current cryptos and provides him a copy of equivalent tokens on the new network. The smart contract then mints the token since it understands that the user has already frozen or burnt tokens on another network.

What are the main features of a bridging solution?

Lock and Mint

Tokens are not really transferred via a blockchain bridge. When a user transfers a token to another blockchain, a two-stage process takes place. At first, the tokens are frozen on the current blockchain. Then, a token of equal value is minted on the receiving blockchain. So, if the user wants to redeem the tokens, the bridge burns the equivalent token to unlock the original value.

Trust-based Solution

Trust-based decentralized blockchain bridges are popular even though they include a ‘merchant’ or trusted custodian. The custodian controls the fund (tokens) via wallet and helps ease off the token transfer process. Thus, high flexibility remains in many blockchain networks.

Assisting Sidechain

While a bridge links two different blockchains, a sidechain bridge connects a parent blockchain to its child blockchain. Since the parent and child blockchain exists on separate chains, they need a blockchain bridge to communicate or share data.

Robust Management

Bridge validators act as the network operators. These operators issue corresponding tokens in exchange for the token they receive from another network through a special smart contract.

Cross-chain Collaterals

Cross-chain collaterals help users to move assets from one blockchain of significant value to another with low fees. Earlier, the users were allowed to borrow assets only from their native chain. Now, they can leverage cross-chain borrowing through a blockchain bridge that requires additional liquidity.


Blockchain bridges authorize the regulation of spontaneous micro transfers. These transfers happen instantly between different blockchains at feasible and nominal rates.

Why is a bridging solution needed?

Following are the three big reasons a blockchain bridge or bridging solution is crucial:

Multi-blockchain token transfer

The most obvious yet crucial role of the blockchain bridge is that it enables cross-blockchain exchange. Users can instantly mint tokens on the desired blockchain without using any costly or time-taking exchange process.


Blockchain bridges help various blockchains to develop by leveraging the abilities of each other. For instance, the features of Ethereum cannot be available on BSC. Bridging solutions let them work and grow together as a team player to solve the challenges occurring in the blockchain space.

Transaction fees

The last big reason behind someone’s need for a bridging solution is transaction fees, often high on popular blockchains. In contrast, newer blockchains don’t impose high transaction costs, though they lack security and other major features. So, bridges allow people to access new networks, transfer tokens to that network, and process transactions at a comparatively low cost.

How to build a decentralized token bridge between Ethereum and Binance Smart Chain?

Using this step-by-step procedure, you will learn how to build a completely decentralized bridge between Ethereum and Binance smart chain using the solidity programming language. Although many blockchain bridges use API to transfer tokens and information, APIs are vulnerable to hacks and can send bogus transactions once hacked. So, we will make the bridge fully decentralized by removing the API from the mechanism.

We allow the bridge script to generate a signed message that the contract will receive to mint the tokens after verifying the signature. The contract also makes sure that the message is unique and hasn’t been used before. That way, you give the signed message to the user, and they are in charge of submitting it to the blockchain to mint and pay for the transaction.

First set up a smart contract for the bridge base using the following functions

import '@openzeppelin/contracts/token/ERC20/IERC20.sol';
import './Itoken.sol';
contract BridgeBase {
address public admin;
IToken public token;
mapping(address => mapping(uint => bool)) public processedNonces;
enum Step { Burn, Mint }
event Transfer(
address from,
address to,
uint amount,
uint date,
uint nonce,
bytes signature,
Step indexed step
constructor(address _token) {
admin = msg.sender;
token = IToken(_token);
function burn(address to, uint amount, uint nonce, bytes calldata signature) external {
require(processedNonces[msg.sender][nonce] == false, 'transfer already processed');
processedNonces[msg.sender][nonce] = true;
token.burn(msg.sender, amount);
emit Transfer(
function mint(
address from,
address to,
uint amount,
uint nonce,
bytes calldata signature
) external {
bytes32 message = prefixed(keccak256(abi.encodePacked(
require(recoverSigner(message, signature) == from , 'wrong signature');
require(processedNonces[from][nonce] == false, 'transfer already processed');
processedNonces[from][nonce] = true;, amount);
emit Transfer(
function prefixed(bytes32 hash) internal pure returns (bytes32) {
return keccak256(abi.encodePacked(
'\x19Ethereum Signed Message:\n32',
function recoverSigner(bytes32 message, bytes memory sig)
returns (address)
uint8 v;
bytes32 r;
bytes32 s;
(v, r, s) = splitSignature(sig);
return ecrecover(message, v, r, s);
function splitSignature(bytes memory sig)
returns (uint8, bytes32, bytes32)
require(sig.length == 65);
bytes32 r;
bytes32 s;
uint8 v;
assembly {
// first 32 bytes, after the length prefix
r := mload(add(sig, 32))
// second 32 bytes
s := mload(add(sig, 64))
// final byte (first byte of the next 32 bytes)
v := byte(0, mload(add(sig, 96)))
return (v, r, s);

After constructing and deploying bridge base code, deploy Binance bridge using the following code

pragma solidity ^0.8.0;
import './BridgeBase.sol';
contract BridgeBsc is BridgeBase {
constructor(address token) BridgeBase(token) {}

Next, deploy another component of the decentralized token bridge; the Ethereum token bridge using the following code.

pragma solidity ^0.8.0;
import './BridgeBase.sol';
contract BridgeEth is BridgeBase {
constructor(address token) BridgeBase(token) {}

Once done with the contracts, mint and burn the IToken using the following code:

pragma solidity ^0.8.0;
interface IToken {
function mint(address to, uint amount) external;
function burn(address owner, uint amount) external;

Next, after minting and burning the IToken, program the migrations:

// SPDX-License-Identifier: MIT
pragma solidity >=0.4.22 <0.9.0;
contract Migrations {
address public owner = msg.sender;
uint public last_completed_migration;
modifier restricted() {
msg.sender == owner,
"This function is restricted to the contract's owner"
function setCompleted(uint completed) public restricted {
last_completed_migration = completed;

Now, write the smart contract for the token base.

pragma solidity ^0.8.0;
import '@openzeppelin/contracts/token/ERC20/ERC20.sol';
contract TokenBase is ERC20 {
address public admin;
constructor(string memory name, string memory symbol) ERC20(name, symbol) {
admin = msg.sender;
function updateAdmin(address newAdmin) external {
require(msg.sender == admin, 'only admin');
admin = newAdmin;
function mint(address to, uint amount) external {
require(msg.sender == admin, 'only admin');
_mint(to, amount);
function burn(address owner, uint amount) external {
require(msg.sender == admin, 'only admin');
_burn(owner, amount);

Once the token base is deployed, deploy the token on Binance smart chain using the given code:

pragma solidity ^0.8.0;
import './TokenBase.sol';
contract TokenBsc is TokenBase {
constructor() TokenBase('BSC Token', 'BTK') {}

Next, deploy the token on Ethereum using the given code:

pragma solidity ^0.8.0;
import './TokenBase.sol';
contract TokenEth is TokenBase {
constructor() TokenBase('ETH Token', 'ETK') {}

Once the token is deployed on Binance smart chain and Ethereum, we will program the migration function:

const Migrations = artifacts.require("Migrations");
module.exports = function (deployer) {

Now, deploy the bridge between Ethereum and Binance smart chain.

const TokenEth = artifacts.require('TokenEth.sol');
const TokenBsc = artifacts.require('TokenBsc.sol');
const BridgeEth = artifacts.require('BridgeEth.sol');
const BridgeBsc = artifacts.require('BridgeBsc.sol');
module.exports = async function (deployer, network, addresses) {
if(network === 'ethTestnet') {
await deployer.deploy(TokenEth);
const tokenEth = await TokenEth.deployed();
await[0], 1000);
await deployer.deploy(BridgeEth, tokenEth.address);
const bridgeEth = await BridgeEth.deployed();
await tokenEth.updateAdmin(bridgeEth.address);
if(network === 'bscTestnet') {
await deployer.deploy(TokenBsc);
const tokenBsc = await TokenBsc.deployed();
await deployer.deploy(BridgeBsc, tokenBsc.address);
const bridgeBsc = await BridgeBsc.deployed();
await tokenBsc.updateAdmin(bridgeBsc.address);

Once the bridge is deployed, deploy the decentralized bridge:

const TokenBsc = artifacts.require('./TokenBsc.sol');
module.exports = async done => {
const [recipient, _] = await web3.eth.getAccounts();
const tokenBsc = await TokenBsc.deployed();
const balance = await tokenBsc.balanceOf(recipient);

Next, program the bridge API that listens to the transfer events:

const Web3 = require('web3');
const BridgeEth = require('../build/contracts/BridgeEth.json');
const BridgeBsc = require('../build/contracts/BridgeBsc.json');
const web3Eth = new Web3('url to eth node (websocket)');
const web3Bsc = new Web3('');
const adminPrivKey = '';
const { address: admin } = web3Bsc.eth.accounts.wallet.add(adminPrivKey);
const bridgeEth = new web3Eth.eth.Contract(
const bridgeBsc = new web3Bsc.eth.Contract(
{fromBlock: 0, step: 0}
.on('data', async event => {
const { from, to, amount, date, nonce, signature } = event.returnValues;
const tx =, to, amount, nonce, signature);
const [gasPrice, gasCost] = await Promise.all([
tx.estimateGas({from: admin}),
const data = tx.encodeABI();
const txData = {
from: admin,
to: bridgeBsc.options.address,
gas: gasCost,
const receipt = await web3Bsc.eth.sendTransaction(txData);
console.log(Transaction hash: ${receipt.transactionHash});
console.log( Processed transfer: - from ${from} - to ${to} - amount ${amount} tokens - date ${date} - nonce ${nonce} );

Now, deploy the Private key function to the Ethereum bridge.

const BridgeEth = artifacts.require('./BridgeEth.sol');
const privKey = 'priv key of sender';
module.exports = async done => {
const nonce = 1; //Need to increment this for each new transfer
const accounts = await web3.eth.getAccounts();
const bridgeEth = await BridgeEth.deployed();
const amount = 1000;
const message = web3.utils.soliditySha3(
{t: 'address', v: accounts[0]},
{t: 'address', v: accounts[0]},
{t: 'uint256', v: amount},
{t: 'uint256', v: nonce},
const { signature } = web3.eth.accounts.sign(
await bridgeEth.burn(accounts[0], amount, nonce, signature);

At last, program Token balance function for the bridge:

const TokenEth = artifacts.require('./TokenEth.sol');
module.exports = async done => {
const [sender, _] = await web3.eth.getAccounts();
const tokenEth = await TokenEth.deployed();
const balance = await tokenEth.balanceOf(sender);

To run the demo, follow the given steps:

To deploy bridge smart contract on Ethereum, type this given code in the Ethereum test net

~ETB/code/screencast/317-eth-bsc-decenrealized-bridge $ truffle migrate --reset --network ethTestnet

To deploy bridge smart contract on Binance smart chain, type this given code in the BSC testnet

~ETB/code/screencast/317-eth-bsc-decenrealized-bridge $ truffle migrate --reset --network bscTestnet
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How Can Blockchain And Digital Payments Reinvent The Internet Of Things?


The convergence of artificial intelligence, blockchain, cloud computing, edge computing, Internet of Things (IoT), 5G, computer vision and augmented/virtual reality is taking society on a journey through the next wave of the digital revolution and toward the metaverse.


As one of the key enablers of the metaverse, IoT has reshaped our lives in significant ways with a myriad of applications, including smart homes, smart manufacturing, smart healthcare and intelligent transportation systems. Billions of connected devices have generated massive amounts of data that tech giants analyzed to extract valuable insight for their businesses.


However, the IoT industry presently possesses several limitations that restrict the sustainable growth of IoT ecosystems. Can blockchain and cryptocurrency help tackle industry-wide challenges and take IoT to the next level?


Internet of Things: The Status Quo

Today, a typical IoT application is still primarily centralized. An IoT company distributes smart devices to its customers and builds the entire solution that often includes various components.

These include identity management, device management, connectivity gateway, data storage, digital twin, data visualization and others, all on a preferred cloud platform. Centralized IoT system architecture was developed to deliver incredible value to customers, but it comes with five key disadvantages:


• Single point of failure: An IoT solution deployed as a centralized solution is subject to a single point of failure. Although cloud service providers have made efforts to improve the scalability, reliability and availability of their platforms, cloud platforms still experience service outages from time to time, leaving customers with smart devices in the lurch.

• Ownership of devices and data: Users who purchase IoT devices do not truly own their devices or data that’s collected. The lifecycle of smart devices is often fully managed by IoT companies, and it is quite difficult, if not impossible, for users to repurpose their devices for other applications. Moreover, IoT companies have extensively used data collected by smart devices, creating new value in businesses without compensating their customers.

• Application and data silos: Most IoT solutions deployed on a centralized platform are self-contained, thereby forming application and data silos. Those silos hinder the value exchange between different IoT systems and result in the loss of new business opportunities.

• Misalignment of values: IoT ecosystems consist of multiple stakeholders, such as device manufacturers/OEMs, network operators, platform providers, service providers, end-users, etc. The centralized IoT architecture enables platform and service providers to maximize their shares of the value chain revenue, whereas the profit margins for device manufacturers/OEMs are quite slim. In addition, end-users are excluded from the centralized IoT value chain.

• Barriers to innovation: The application and data silos, coupled with rigid business models, create barriers to continuous innovation in IoT. It slows down technology adoption and ecosystem growth.

Internet of Things: A New Dawn

The introduction of blockchain and cryptocurrency has shed light on a new community-driven machine economy called MachineFi. The innovative combination of blockchain, cryptocurrency and IoT provides effective solutions to address challenges that the IoT industry is facing.

• High availability and security: The decentralized nature of blockchain implies that applications running on top of it can achieve high availability and security. As a result, IoT companies could leverage blockchain to deploy the critical components of their solutions, thereby reducing service downtime and enhancing system trustworthiness.

• User-owned device and data: By applying the emerging concepts such as decentralized identifiers (DIDs) and verifiable credentials (VCs) to build a self-sovereign identity metasystem for people, organizations and IoT devices, users can gain control over data collected by their smart devices and decide how it’s shared.

• Interoperable applications and data: Using blockchain as the underlying fabric can connect different IoT applications, enabling them to exchange digital assets in a transparent and trustworthy manner. In particular, large-scale decentralized and autonomous IoT applications can be built upon individual applications by leveraging interoperable data.

• Fair distribution of values: Cryptocurrencies and associated token economy models provide powerful tools for incentivizing all the stakeholders in IoT ecosystems. Aligning the stakeholders’ benefits in a fair and consistent manner is the main force for transforming the IoT industry and forming the flywheel effect.

• Endless innovation: By combining IoT with the value exchange layer powered by DeFi, NFTs and DAOs, the IoT industry is able to create new business models and build a wide range of community-driven, machine-centric applications. Such digital transformation will bring endless innovation opportunities to IoT ecosystems.

MachineFi represents a paradigm shift in the way IoT systems are designed and monetized. It considers all of the stakeholders in an ecosystem and incentivizes them to move the value-creation flywheel continuously. The exciting future of an IoT for all of us is no longer a dream. It's a reality.

Dr. Xinxin Fan is the Head of Cryptography at IoTeX, a startup empowering the future machine economy with blockchain and IoT.

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