The Role of Blockchains, Big Data, and Government in Today's Global Economy

Introduction

Blockchain involves a chronological collection of blocks, which represents a collection of data and sensitive information. In economics, blockchain represents an autonomous ledger that contains sensitive information. Therefore, sensitive information and data are spread across all individuals in a blockchain network. The data can only be viewed, but its contents are protected and cannot be changed. Thus, blockchain provides a secure network for data presentation and hosting. The blockchain technology assists in handling various transactions, including cryptocurrency. The blockchain network has a node that starts a transaction and assigns it with a private key to ensure the security of the transaction process. The transaction is then passed through all nodes in the network for validation, which requires more than one node in the network for a transaction to be validated. After validation, a transaction is added into the block, which depicts a confirmation of a transaction. Therefore, the creation of new blocks takes the same procedure.

Major components of a blockchain

Four components make up the blockchain network and ecosystem. Therefore, the components of the blockchain network are critical in building blockchain technology. The four components include node application, distributed ledger, virtual machine, and consensus algorithm (Singh, 2020).

Node Application

It is a component of a blockchain network that ensures that all computers connected to the internet have a node application for their functionality in the blockchain network. For example, in Bit-coin transaction, every computer connected must install a Bit-coin wallet for Bitcoin transactions. Therefore blockchain network utilizes a Service Overlay Network, which facilitates the shared applications in a blockchain network.

Distributed Ledger

A leger represents a file that contains records and data of users’ transactions. Therefore, distributed ledger represents an autonomous ledger representation in a network. It also represents a replicated, synchronized, and shared database across all nodes in a network. The distributed ledger is decentralized, which a major benefit of the distributed ledger.

Consensus Algorithm

All transactions handled in a blockchain network are valid and secure because of decentralization. Therefore, the consensus algorithm assists in attaining an agreement on various information regarding distributed systems in a network. Blockchain technology utilizes consensus algorithm to achieve reliability on its transactions.

Virtual Machine

The virtual machine also constitutes node application in the blockchain network. It is an imaginary machine in Ethereum blockchain network (i.e. Ethereum Virtual Machine). Therefore, it assists in enforcing terms of the contract between transactions and provides digital tokens for valid transactions.

Blockchain global economy impacts and future

I think blockchain technology has changed a global economy towards the concepts of digital and distributed ledger systems and cryptocurrencies. The blockchain technology has provided various tools that assist in global economy financial management such as Bit-coin (Chitranshi & Chawla, 2020). Through blockchain technology, there is a changing value in the global economy because it offers authenticity and documentation. There is also a shifting responsibility in a global economy because the blockchain technology innovates data and allowing users to have full control over their details. The blockchain technology has various implications for the future of the baking environment. Therefore, it can impact exchange value in the global economy. The peer-to-peer system of exchange will in future allow self-governing responsibilities. Therefore, the costs of transactions will be lower in future with the use of blockchain technology. Another emerging concept in blockchain technology is the machine-to- machine transactions, which will allow machines to become autonomous in an economic environment.

Big Data

Big data represents large and diverse sets of information that incorporates a large volume of data created and collected with high velocity. Therefore, big data comes in different formats, which can be structured or unstructured.

I have severally encountered big data because it continuously transforms our daily lives. For example, the concept in a movie experience has greatly transformed. The process of renting a movie in the past was based on what the customer needs based on preference. In contrast, today, movie rental stores utilize the concept of array data manipulation to offer recommendations to their consumers. I think another brilliant example of an encounter of big data is Facebook. It is the most popular social media platform having over 2 billion active users across the world. Therefore, various companies store massive data on their Facebook accounts, for example, product description and other information. “Every day, we feed Facebook’s data beast with mounds of information; therefore, every 60 seconds, 136,0000 photos are uploaded, 510,000 comments are posted, and 293,000 status updates are posted, which is a LOT of data” (Facebook, 2016).

In my view, big data management is where the right individuals, policies, and technologies are put in place to facilitate accuracy, quality, and security of data. The characteristics of big data include the volume of data, the data variety, data-veracity, and the value of data (Didenko, Skripnuk, & Mirolyubova, 2017). Therefore, big data can involve complexity and high costs of maintenance (Didenko, Skripnuk, & Mirolyubova, 2017). It is crucial for business organizations to implement new measures, for example, team-members involvement in ensuring big data management.

Government and Policies

Government plays a pivotal role in the global economy, which may impact foreign investment and international market foreign exchange. Therefore, the government provides regulations and global governance to assist in promoting the global economy. The government assists in creating a new infrastructure to attract new foreign investment. For example, the provision of electricity, water, and roads, as well as complete resolutions to disputes, will create a conducive environment for foreign investment. The government can also ensure the reduction of financial crises to enhance capital flows. The process of solving financial crises will involve ensuring strong banking oversee, transparency in international financial transactions, and providing regulations in financial markets. It is also essential for the government to work with other countries to assist in establishing stringent labor and environmental standards to prevent exploitation. The government also protects infant-industries to allow them to grow and fit international market competitions.

There are various economic policies which may also impact the global economy because they aim at ensuring the growth of the global economy. Monetary policy is the most common tool for regulating global economic activities. Fiscal policy can also assist in boosting demand by reducing tax and enhancing government spending in foreign investment (Fuest, Huber, & Wöhlbier, 2000). The supply-side policies include reduced taxes on foreign investment, minimizing the power of trade unions, allowing flexibility of labor markets, and ensuring investment in training and education on the global economy. Therefore, economic policies will assist in ensuring the growth of the global economy. I think economic policies that should be put in place regarding the global economy include protection of foreign investment. When the foreign investment is protected, international trade will be promoted. Therefore, allowing the growth of the global economy.

Conclusion

Blockchain technology is significant in ensuring secure and reliable transactions. The blockchain technology has provided various tools that assist in global economy financial management such as Bitcoin. Through blockchain technology, there is a changing value in the global economy because it offers authenticity and documentation. Big data involves extensive data with different formatting structures that are created with high velocity. Therefore, many business organizations are using big data to cut their costs of business operations, to increase efficiency, and ensuring that the right employees are hired in the organization. The use of big data can also assist the organization in pricing because it acts as an intelligent tool for evaluating the organization’s finances. Big data can also assist in increasing sales of business organizations; for example, some organizations use big data in product advertisement. Government plays a critical role in the global economy. It is responsible for policy formulation and implementation regarding the global economy. Government has the responsibility of promoting the global economy by providing necessary infrastructure such as water, electricity, and roads to facilitate foreign investment

Reference

• Chitranshi, U., & Chawla, S. K. (2020). Application View Towards Blockchain.
• Cryptocurrencies and Blockchain Technology Applications, 281-295.
• doi:10.1002/9781119621201.ch15
• Didenko, N. I., Skripnuk, D. F., & Mirolyubova, O. V. (2017). Big data and the global economy.
• 2017 Tenth International Conference Management of Large-Scale System
• Development (MLSD). doi:10.1109/mlsd.2017.8109611
• Facebook: How Facebook Use Big Data to Understand Customers. (2016). Big Data in Practice,
• 69-74. doi:10.1002/9781119278825.ch11
• Fuest, C., Huber, B., & Wöhlbier, F. (2000). Fiscal Policy and Unemployment in a Global Economy. Globalization and Unemployment, 313-331. doi:10.1007/978-3-662-04082- 9_14
• Singh, M. (2020). Blockchain Technology for Data Management in Industry 4.0. Blockchain
• Technology for Industry 4.0 Blockchain Technologies, 59-72. doi:10.1007/978-981-15- 1137-0_3

Cite this page