Blockchain Ecosystem: Blockchain 2.0 and Smart Contracts

Originally, Blockchain was advertised as a simple ledger that could record transactions in sequence. Later, it was realized that the Blockchain Ecosystem could have more applications in domains other than other than transacting payments. Thus, evolved the idea of Blockchain 2.0 and Smart Contracts.

Blockchain 2.0 expands the power of ledger to include other utilities like agreements, proposals, documents, codes and more. Basically, this includes an additional logic a.k.a. code through ‘Smart Contracts’.

Smart Contracts contain a code and execute various terms written or explicitly mentioned in a contract. Similar to normal contracts, these ‘Smart Contracts’ are based on reaching agreed upon conditions. These Smart Contracts are stored in Blockchain 2.0 distributed ledger. Contracts can be as simple as recording a loan or making payments or as complex as ‘Swaps’.

How Blockchain 2.0 is different from Blockchain 1.0

Blockchain 1.0 was primarily a Bitcoin blockchain whereas Blockchain 2.0 has lots of different kinds of blockchains such as Ethereum, Corda, Hyperledger. This is not the end. There are many others in the loop and in different stages of development.

Blockchain 2.0 also marks a change in its functioning, i.e., it moves from simple transactions to multiple transactions. Previously, we had mentioned blockchains could be public or private. Blockchain 1.0 was limited to public only. Blockchain 2.0 expands its reach and includes consortium, domain specific apart from the public and private.

blockchain technology

The benefits that are associated with Blockchain 2.0. First, Blockchain 1.0 always remained open and distributed. This is not the case with blockchain 2.0. Secondly, it solves many regulatory and privacy needs, can handle more complex needs and is not locked into one vendor. Apart from these, Blockchain 2.0 overcomes some of the existing blockchain issues such as speed and computational cost.

How Microsoft intends to develop Blockchain Ecosystem

Microsoft is implementing a three-part strategy for this:

  1. Build and learn from key partner-driven POCs built on top of various Blockchain technologies
  2. Grow the blockchain marketplace ecosystem & artifacts together with our partners & customers
  3. Develop key Azure blockchain middleware services to ensure the infrastructure is enterprise ready

Blockchain Ecosystem

Microsoft also plans to extend blockchain by creating both new middleware as well as secure ‘cryptlets’, a project it names as Project Bletchley for extending blockchain. In addition to this, the company is attempting to connect to many different ledgers and existing external and internal services to enable a robust blockchain ecosystem for the enterprise since it realizes the technology has some great applications.

The potential applications of Blockchain technology include:

  • Financial – Trading, dealing, equities, Derivatives Trading, Compliance Reporting, etc
  • Media – Digital Rights Management, Game Monetisation, Art Authentication, Purchase and Usage monitoring and more
  • Computer Science – Micronization of work (pay for algorithms, tweets), Expanse of Marketplace, Disbursement of Work
  • Medical – DNA Sequencing, Personalized medicine
  • Government – Voting, vehicle Registration, Licensing, and identification.

So depending on your industry there are lots of solutions available. Most of the customers embracing Blockchain technology are new to Microsoft Azure service. You need to sign up for an Azure account to use the blockchain technology offered by Microsoft.

Blockchain as a Service is available within Microsoft Azure DevTest labs. So, you need to use Azure Dev test lab to use Blockchain as a service.  Azure DevTest Labs is a service that helps developers and testers quickly create environments in Azure while minimizing waste and controlling cost. To get started, simply search for the keyword “Blockchain” and you will see Blockchain Labs in the list of available resources.

Select Create and fill in the details of your lab and you should be good to go. Do not forget to select your open source stacks and third party offerings before proceeding further. Now, to setup Blockchain as a Service hosted on Azure, navigate to portal.azure.com and enter the credentials for your Microsoft Azure account. Once authenticated, you will be redirected to the Azure portal. Thereafter, follow the steps outlined in this post in sequence to create a new DevTest Lab Instance, create a new virtual machine and acquire a personal access token from GitHub.

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The author Hemant Saxena is a post-graduate in bio-technology and has an immense interest in following Windows, Office and other technology developments. Quiet by nature, he is an avid Lacrosse player. Creating a System Restore Point first before installing a new software, and being careful about any third-party offers while installing freeware is recommended.