Kepeng.io, DENPASAR – Today, the world is undergoing an era of profound transformation powered by digitalization and constant improvements in information and communication technologies. Pololikashvili, Secretary-General of the United Nations World Tourism Organization (UNWTO) (2018) underlined the important role of technology in helping to better manage social, cultural, and environmental impacts. The effective use of technological advances can act as agents of positive change and spur sustainable management of tourism potential, for example, cultural tourism in Bali, Indonesia.
A special focus has recently been placed on digital innovation in finance and distributed ledger technology (DLT), a by-product of the Semantic Web being the first of such developments and has ushered in a wave of impactful technological innovation. In the last decade, Bitcoin has emerged as the first decentralized global digital currency. Its skyrocketing rise has not only brought attention to focus on cryptocurrencies but also the underlying technology is known as the blockchain. Transactions between people and organizations are currently centralized and controlled by third parties such as banking institutions.
Blockchain technology is characterized by decentralization, immutability, security, auditability, and availability. Blockchain works in a decentralized environment eliminating the need for intermediary institutions such as banks which can greatly save costs and increase efficiency. In addition to empowering digital currencies, Blockchain technology has enabled innovators the ability to create digital tokens to represent a rare asset with the potential to reshape the entrepreneurial and innovation landscape.
In the socialization held on Friday (6/8/2021), by I Wayan “Agus” Pratama as the Kepeng Indonesia Community Manager Team, to WIP Crew and Iris Thin Community, Agus explained that blockchain technology can be adapted for digital assets. Digital assets have always had a perceived lack of value as collectibles when compared to their real-world counterparts because of how easy digital assets are to replicate. However, this all changed with the introduction of blockchain-based NFT. NFTs are cryptographically unique and are non-replicable digital assets created through smart contracts.
Blockchain or also known as distributed bookkeeping technology (Distributed Ledger Technology / DLT) is a concept where every participant/party who is part of a distributed network has access rights to the bookkeeping. The concept brought by blockchain is an application of an existing concept, namely the concept of a distributed database. “This concept was born along with the birth of bitcoin as well as an answer to the problem of the absence of a third party (financial institution/government) to build trust between parties conducting transactions in an unsafe environment,” said Agus.
Agus again added that conceptually, blockchain technology can be equated with the technology used in distributed databases. In a distributed database the recorded information will be stored and shared with every member in the network. This technology is also what creates the disappearance/absence of third parties (financial institutions/governments) for cryptocurrencies, and the concept of the absence of third parties is a concept that has been around for quite a while (about 30 years). In addition, blockchain technology can also prevent double-spending transactions by combining peer-to-peer network technology and cryptographic public keys. Literally,
There are several mechanisms/techniques used in the blockchain so that the security of the blockchain is guaranteed. One of them is the use of harsh techniques, by utilizing hash techniques from cryptography, the block will have a hash value that identifies the block and all of its contents and is unique. When a block is created its hash value is calculated at once. Changing something in the block will cause the hash value to change. In other words, the hash value is useful for detecting block changes. The third element of the block is the hash value of the previous block. “This technique of utilizing hashes makes the blockchain more secure because if anyone changes one of the blocks in the blockchain, the hash value will change and the next block will become invalid again because it does not store the valid hash value of the previous block”, said Agus. This means that changes made to a block will invalidate the entire blockchain.
Blockchain uses a peer-to-peer network where everyone is allowed to join. When someone joins he will get a full copy of the blockchain. When a new block is created, the new block will be sent to everyone on the network. Each node will verify the block to ensure its validity of the block. If all blocks are valid, then each node will add the new node to its own blockchain. All nodes in this network make a consensus. They agree on which blocks are valid which ones are not. “Invalid blocks will be rejected by other nodes in the network,” said Agus. “So to successfully change the blockchain we have to change all the blocks in the chain, repeat proof-of-work for each block, and control more than 50% peer-to-peer. Only in that way can the changed block be accepted by everyone,” concluded Agus.