By/ Dr.Azab Alaziz Alhashemi,
International IT expert



Introduction

Blockchain technology has gained significant global attention as one of the key forms of digital transformation on the internet. Some consider Blockchain Technology to be the next generation of the modern internet revolution. Since its inception, Blockchain Technology has contributed to numerous innovative developments. One of the most significant advancements brought about by Blockchain Technology is the transformation of real assets into digital assets, which has greatly impacted the real estate and financial sectors as the breeding ground for digital currencies.

Blockchain is an advanced mechanism for database management that allows for transparent information sharing within a network of participants. The blockchain database stores data in interconnected blocks within a chain. The data is chronologically consistent since the chain cannot be deleted or modified without consensus from the network. As a result, Blockchain Technology can be used to create an immutable or fixed ledger to track orders, payments, accounts, and other transactions. The system incorporates built-in mechanisms to prevent unauthorized transaction inputs and establishes consistency in the shared presentation of these transactions.

Applications of Blockchain Technology

Blockchain Technology has been implemented in various sectors, with the economic and financial sectors being among the most prominent. Blockchain is recognized as a distributed cloud-based database that excels in managing multiple records and lists. Each block, characterized by a timestamp and a link to the previous block, constitutes the blockchain. This design enables it to preserve the stored data. Additionally, Blockchain Technology is known for its versatility, security, encryption, availability, and openness to all. It is considered one of the key forms of digital transformation, operating on a collective database across a chain of blocks. It aggregates digital records based on:

Decentralization:

The decentralization feature in Blockchain shifts control and decision-making from a central authority (individual, organization, or group) to a distributed network. Decentralized Blockchain networks utilize transparency to reduce the need for trust among participants. These networks prevent participants from exerting power or control over each other in ways that would undermine the functioning of the Blockchain network.

Immutability:

Immutability means that something cannot be changed or modified, and any participant cannot manipulate a transaction once it is recorded in the shared ledger. If an error occurs in a transaction record, you need to add a new transaction to reverse the error. Both transactions remain visible to the digital network.

Consensus:

The Blockchain system establishes rules regarding participant agreement for recording transactions. New transactions can only be recorded after the majority of participants in the Blockchain network have reached a consensus.

Main Components of Blockchain Technology:

Distributed Ledger:

The distributed ledger is the shared database in a Blockchain network that stores transactions. It functions like a shared file that can be edited by anyone in the team using most collaborative text editing software. However,

distributed ledger technologies have strict rules regarding who can edit and how they can edit. Once recorded, entries cannot be deleted.

Smart Contracts:

Companies utilize smart contracts for self-executing contract management without the need for a third-party intermediary. Smart contracts are stored on a Blockchain system and automatically execute predefined conditions. They perform verification processes to ensure confident transaction completion. For example, a logistics services company may have a smart contract that automatically initiates payment upon goods’ arrival at the port.

Public Key Encryption:

Public key encryption is a security feature that uniquely identifies participants in a Blockchain network. This mechanism creates two sets of keys for network members. One key is a public key shared among all individuals in the network, and the other is a unique private key for each member. The public and private keys work together to unlock the data stored in the account ledger.

Understanding the Importance of Blockchain Technology:

Just as the Industrial Revolution technology responded to societal changes during that period, Blockchain Technology, or “blockchain,” responds to the continuous changes in our era. One of the reasons why Blockchain Technology has attracted a lot of attention is that it speaks to a shared sentiment felt by many people worldwide instinctively. It suggests that we can only create new solutions to some of the world’s oldest problems through collaboration and interaction.

Blockchain Technology seems specifically applicable as a solution because it involves an approach that counters problem reduction. Despite the deterministic nature of the technology often discussed, it is important to listen to the underlying message of inclusiveness, trust, and diversity that Blockchain Technology seeks to address from a technical perspective. It is an ongoing invitation that will last for decades to come, and we must find new ways to respond through governments, civil society, academia, non-governmental organizations, and international organizations such as the United Nations.

Although many initiatives have been developed worldwide to create such regulation, we need to broaden our understanding of those efforts and the principles of human rights throughout the digital industry. For example, Blockchain Technology is borderless, as it does not recognize national boundaries as a currency or technology. It requires a unified and multi-stakeholder approach to regulation. Furthermore, civil servants worldwide need more than just a basic understanding of the technology. They need to comprehend how to interpret their regulations in the code, which smart contracts and similar elements require. This diversity of thought and inclusiveness cannot be left solely to startups or young people, as the impact of the code written in a country under certain laws affects a large number of people. Therefore, it needs to be managed by the community. Moreover, the code can have an impact on a significant number of people, so it needs to be managed across society. Most importantly, the transition to a fully digital economy without updating our educational systems is a recipe for disaster.

By finding suitable multi-stakeholder solutions, we can address our current emerging technologies and establish reasonable frameworks for those that have not yet been considered. This is why dealing with new technologies and the Secretary-General’s strategy on emerging technologies is of utmost importance. Instead of directly accepting or rejecting these technologies, we must give them careful consideration and work together to assess their impact and deal with them more realistically.

Finally, the primary legacy of Blockchain Technology may be the emergence of entirely new solutions to old problems when computational power is delivered to a large portion of the population rather than retained solely within companies. In the case of Blockchain Technology, it all started with a desire to see a new form of economic system, the original system in the digital world we have all started living in. Despite the potential risks associated


with the widespread adoption of Blockchain Technology, which fundamentally impacts all aspects of life, requires well-regulated laws to maintain human and social principles in the world.