Blockchain, Free-Markets, and Global Civil Society Research Paper

Blockchain, Free-Markets, and Global Civil Society
Name
Abstract
The use of Blockchain technologies continues to garner momentum today. Many industries continue to leverage this technology to enjoy its robust solutions. Blockchain-based systems continue to question the sovereignty of many nation-states. This paper’s primary focus is to examine the impact of Blockchain applications on markets and nation-states. The research draws from peer-reviewed journal sources that take an in-depth outlook on blockchain technologies. This paper first examines Blockchains’ structure. It then goes through the core workings of blockchain technology, such as the decentralized structure, and consensus mechanism. The article then looks at the practical applications of Blockchain in various sectors of the market. Then it examines its impact on nation-states sovereignty. Blockchain is seen as a means to minimize the power of the state. The paper will go over the political ideology that Blockchain is promoting. A significant part will also check out nation-states resistance of cryptocurrencies such as Bitcoin. This virtual currency has emerged as a vital tool in facilitating international transactions. This paper will then conclude by illustrating the disruptive influence of the technology on financial markets both now and in the future. Blockchain will transform the operations of many businesses and challenge the role of the state in many nations.
Blockchain, Free-Markets, and Global Civil Society
Introduction
Blockchain is a public digital ledger of transactions of parties within a network. Blocks constitute the records entered and are connected with the use of cryptography. The transaction information published is permanent and can’t be erased. The consensus of the majority of participating parties in a network is required to verify the transactions. These features guarantee the security and permanence of any recorded transactions. The distribution system employed in Blockchain technology eliminates a central repository or a central authority, such as a financial institution or government (Crosby et al., 2016). Therefore, no third-party entities. The technology has been successfully applied in both financial and non-financial markets. Some tech experts consider it the most significant technology since the invention of the internet. The technology has had a transformative effect on financial markets globally. In today’s digital market, people rely on the trustworthy reputation of a third party entity during their online transactions. People entrust these entities, such as social networks, financial institutions, or email service providers to protect their digital assets. Unfortunately, many at times, these third party entities are vulnerable to hackers. So, user’s digital assets face the risk of being manipulated or compromised. However, Blockchain technology ensures that transactions at any time can be verified. Also, its anonymity feature guarantees the privacy of parties and their digital assets. (Crosby et. Al, 2016). Blockchain enhances the security of digital transactions.
The widespread use of Blockchain technology is Bitcoin. Many governments oppose it as it limits their control. Blockchain has been a significant disruption in many industries. The following part traces the origins of Blockchain technology.
History of Blockchain technology
The early 1990s marked the development of the most initial concepts in using Blockchains. Two technicians, Stuart Haber and W. Scott Stornetta, first used cryptography to secure a block of chains. Their goal was to design a system that guarantees that the document’s timestamps are tamper-proof. Later, they managed to use one block to combine multiple document certificates.  In 2008, a revolutionary paper, “Bitcoin: A Peer-To-Peer Electronic Cash System,” was the most significant in the application of Blockchain. This white paper described a blueprint that marked the foundation of modern cryptocurrency systems. It was developed by an individual using the pseudonym Satoshi Nakamoto. In 2009, Bitcoin emerged as the first application of Blockchain technology. The electronic cash system became more popular than other earlier electronic cash systems such as NetCash and ecash. Two factors led to the growth of Bitcoin. First, Blockchain ensured it used a distribution fashion, which prevents any single user from controlling transactions. Users didn’t need a trusted third party to conduct direct transactions. Second, it had tamper-proof security systems. Its consensus model guaranteed valid deals. Also, transactions were public, and users could remain pseudonymous (Yaga et al., 2019). These features made this cryptocurrency famous.
Later from 2013, developers began to explore the possibility of expanding the functions of Bitcoin. Many developers felt Bitcoin had some limitations, such as only being a peer to peer network. This led to the creation of Ethereum, which has expanded functions. The cryptocurrency platform allows for the use of smart contracts and decentralized applications. Smart contracts help in digitally executing commercial contracts without using brokers. Thanks to these added functionalities, Ethereum continues to conduct countless daily transactions. (101 Blockchains, 2013). Ethereum is now the primary platform in the cryptocurrency space.
3-core aspects of Blockchain technology
According to Yaga et al. (2019), Blockchain technology has established features to guarantee trust for its users. These features take the role of a trusted third party entity such as a bank. The following are some of the critical aspects that make Blockchains trustworthy.
Shared: Many users share the public ledger. This feature guarantees transparency for participants. Transactions are open to users in the Blockchain network. 
Secured: The Use of cryptography makes blockchain technology tamper-proof. This guarantees that no participant can alter any information.
Distributed: The distribution fashion allows for the increase of nodes within the blockchain network. This boosts the resilience of Blockchain to prevent bad actors from interfering with the consensus protocol.
How Blockchain Works
Blockchain technologies use cryptography to secure online transactions between users. This cryptography can be compared to a trusted intermediary such as a financial institution during standard transactions. They help prevent any tampering of transactions. Blocks are used to serve as transactions online. The digital signatures “public key” and “private key” help verify the authenticity of the sender and buyer. They help protect the operation. Every node or party in the Blockchain network receives the transaction information and validates it. This is because the public ledger only records transactions once they are authorized. The verification node proves the spender’s account is credible and has sufficient cryptocurrency. The operation can then occur, after which the block is added to the chain (Crosby et al., 2016). The transaction record in the block is transparent and unerasable.
Applications of Blockchain technology
Digital payments
Cryptocurrencies such as Bitcoin have emerged as forms of digital payments. Since Bitcoin’s inception in 2009, there has been a significant increase in electronic transactions using this platform. Also, it’s lower costs make using Bitcoin more attractive to users. Major stock markets such as Deutsche Borse, London Stock Exchange continue to integrate blockchain technologies into their payments. Some of those solutions include private companies using Blockchain to show share ownership digitally. Companies such as Ripple have used blockchains to facilitate cross-border payments. The platform introduced a solution that uses Blockchain to provide interbank payments. The platform continues to partner with over 100 banks internationally to promote this solution (Nowiński & Kozma, 2017). This shows the impact blockchain will have on electronic payments in the banking industry.
Real Estate
Blockchain technology offers solutions to the structural bottlenecks found in the real estate industry. The sector faces an illiquidity problem caused by long closing times and a lack of trust by significant players. The present structure has a considerable number of players, such as insurers, tax agencies, banks, inspectors, lawyers, and regulators. All of these parties have systems in place to verify transactions. The involvement of many individuals makes the process of closing a real estate deal lengthy and costly. Further, it compromises the transparency of the process. However, Blockchain’s distributed ledger provides a solution to these bottlenecks. It shortens the closing time of executing a transaction. It also reduces the costs involved in record-keeping and verification hence enhances the transparency of the process (Nowiński & Kozma, 2017). The use of Blockchain technologies will continue to smoothen the operations of the real estate industry.
Smart contracts
These are digital programs that use blockchains’ consensus mechanisms to self-execute agreements based on the set terms. Blockchain allows the use of cryptography to finalize deals and to eliminate trusted third-party intermediaries. The decentralized structure of blockchains ensures the execution of the contract is tamper-proof. A programming language is used to develop the terms of the agreement. When the predefined conditions are met, Blockchain executes the deal. So, they automatically implement the contractual terms while guaranteeing the accuracy of the process. Smart contracts are tamper-proof hence prevent any malicious attack. This virtually eliminates the need for third parties such as banks or lawyers who verify the contract process (Lauslahti, Mattila, & Seppala, 2017). The use of smart contracts continues to disrupt the financial and legal services sectors. Contracts of digital assets can be concluded quickly and in real-time without lengthy processes. 
Supply chain management
The Supply chain system consists of various levels, contracts, and stakeholders. The supply chain involves a series of interconnected transactions from one point to another. Blockchains can be used to permanently document the operations of products from manufacturing point to selling point. They use the distributed ledger databases to help supply chains be more transparent. Blockchains also ensure transactions are done in real-time. Being tamper-proof minimizes human errors and fraud in the supply chain. Buyers and sellers are registered into the blockchain network. The smart contract contains the terms and requirements of the buyers and sellers. Once everything is verified, any transactions within the system are automatically added to the chain. Blockchains ensures the self-execution of transactions between two parties once conditions are satisfied. The lack of third party intervention helps remove the many brokers and intermediaries usually present in supply chain systems. This fast track the supply chain process and reduces costs. Also, smart contracts smoothen the flow of goods and services across different points within the supply chain (Mohanta, Panda & Jena, 2018). Therefore, blockchain technologies boost transparency within supply chains, which builds trust among stakeholders. 
Entertainment
Blockchain is revolutionizing the music and media industry by protecting the work of content creators. Creative talents continue to lose money through forgery and other dishonest means. However, blockchains offer a sustainable business model. Revenues from commercial purchases of content can be automatically distributed to individual artists. It ensures transparency in royalty payments to artists within a network. Content providers can also track and claim their fees. Blockchain aids direct delivery of content by removing the platform providers and content aggregators. Content owners of productions such as songs or news items can earn revenues directly from consumers. Also, consumers only subscribe to their preferred content (Nowiński & Kozma, 2017). Blockchain has served to protect the rightful owners of creative content.
Tokenization of assets
Blockchain enables the tokenization of assets, which has a disruptive influence in the financial industry. Tokenization of assets is where a digital security token is used to represent an actual asset. A security token acts digitally in place of assets such as real estate or company shares. It helps facilitate the trading of assets in a secondary market. Tokenization has significant benefits for both buyers and investors in the financial market. First, it enhances transparency as the token has the holder’s rights and legal obligations. It also has proof of ownership, ensuring clean transactions in the market. Second, it’s more cost-effective and fast because using smart contracts provides an automated process with minimal third parties. This also eliminates the bureaucracy in buying and selling methods in financial markets. Third, tokenization increases assets liquidity as the tokens can be traded in secondary markets. Investors can gain access to a broader pool of buyers and sellers. Tokenization gives investors the freedom to choose where to invest and therefore choose more personalized options. Several companies have already emerged that offer tokenization, such as Tokeny and tZERO. (Laurent, Chollet, Burke & Seers, 2018). This concept of tokenization will help drive trade volumes by taking advantage of the significant value in illiquid assets in the financial market.
Stock trading
The automation and decentralization of blockchain technologies go a long way in fast-tracking stock trades. Regulators, clearances, and intermediaries make the process of closing transactions lengthy and costly.  Blockchains offer a chance of stock markets to boost efficiency and protect their systems from malicious attacks. This technology also provides stocks the opportunity to streamline their processes by leveraging on the Distributed ledger network. DLN helps cut off the traditional multi-layered processes in a stock that is time-consuming, risky and complex (Hackernoon, 2018). Traditional systems usually present the following challenges to stock markets. 
According to Hackernoon, one reason is due to the presence of intermediaries, and high costs are required to invest in the stocks. This situation drives transaction costs. Second, it features a lack of transparency since there is little information about other investment decisions. Third, all the digital records are stored in a centralized ledger, which makes the whole system vulnerable to malicious attacks. However, Blockchain technology solves many of these challenges. It has revolutionized the operation of many stock markets globally. The following are some of the benefits. Blockchain-based stock exchange enhances transparency and trust within the market. The public ledger ensures that all participants with the blockchain network are aware of all the transactions or holdings of other investors. Its ability to track and verify transactions guarantees high-security standards within the market. This reduces the possibility of investors losing their money to fraud. Another benefit is reduced costs associated with intermediaries. Some of the costs usually involved include verification fees for trade, audit, or record keeping. Using Blockchain also allows a decentralized stock exchange, which eliminates a settlement process, clearinghouse, or brokerage. Blockchains also increase liquidity and investments (Hackernoon, 2018). This is because it boosts efficiency and reduces costs, which encourages investors to participate in the market.
The blockchain-based system helps fast track the transaction process ...