Keep your data chained. Blockchain keeps it safe!

Maciej Zieliński

18 Dec 2019
Keep your data chained. Blockchain keeps it safe!

Julia Wolińska

The top corporations agree about our predictions concerning the future. Every year we hear more and more promises about the Internet of Things, which is going to make us forget about all our issues... even if we did not know about their existence!

After leaving the work you are going to get into your car, which is going to bring you right to the address of your home. With only a single touch you can turn on the lights and check if the current contents of your fridge can satisfy your cravings. Just remember not to drink your coffee – your health monitoring app will make sure that you don’t succumb to unhealthy habits and it already knows your blood pressure should not be too high! It is just hard to believe that the internet alone can make your life so much more convenient

However, the moment you lay down on your comfy sofa, something else happens. During the synchronisation of data from your virtual debit card and your navigation app, you are not the only one gaining the info from them. Your actions are actively being watched by hackers. They are making sure that they know your address and the time you are leaving your house.

While it can really sound like a vision from some science fiction thriller, it’s entirely possible that the incoming technological revolution will lead to such circumstances. The question appears; would we surrender our privacy for an access to incredible convenience?

You could, however, also protecting your data. Then you would not have to expose yourself to potential data theft and use all of the miracles of technology without a single worry. How, you my ask? The answer lies in the block of chains.

Vulnerable data and its risks

Take a moment to consider how does the information flow within your family and friend groups. Well, naturally, it is usually done by verbal exchanges which usually letyou know about their customs, preferences and habits. During conversations, you and your friends gather data about each other, you learn about the music you listen to, what do you want to eat for dinner or if you are allergic to peanuts.

As it turns out, the domestic appliance or even car manufacturers wish to initiate the same dialogue with you - they want to get to know you as well as your friends and family do through the power of internet. They are aiming to adapt their appliances to improve your experience with them and they want to do that by gathering the necessary data about your everyday life.

However, the problem arises the moment we are talking about the vulnerable data. It is for example your address, information about your bank accounts or investments, your workplace or data about your customers, details about your health. This is the data that should not ever be revealed to any unwanted third parties but are often unfortunately under the attack from hackers.

It turns out that if your everyday use devices are connected to the internet, it is possible to hack not only your computer or your laptop but also your domestic appliances and car.

IoT nie jest bezpieczny bez blockchaina - ochrona danych

More often do the voices appear that the internet in its modern form is not a good foundation for the absolutely humongous network of the internet of things. That is why the research has begun to find a safer, more anonymous medium which would not be as vulnerable towards the attacks. The experts believe that no other technology than the one offered by the blockchain would suffice to pull this task off.

Blockchain - the way to keep the IoT safe

Blockchain was made viral during the time of the cryptocurrency boom in 2016. However, there is still a lot of people who find the concept quite enigmatic. It is often wrongly associated with the phenomenon of Bitcoins. After all, the usability of the blockchain goes far beyond the financial sector. We can briefly say that it is a kind of technology which is used to gather the data about our transactions on the internet safely and anonymously.

Blockchain is a database which is formed by the chain of the blocks connected to it, which it derives its name from. Each and every individual block is connected to next one. What’s important is that all the gathered and saved information are not stored onone server or on one device – they are scattered and encrypted and their anonymouscopies are held inside of multiple locations. Thanks to this method the risk of hacking or stealing such data is equal to zero.

The public registry can be presented as a giant piece of paper which holds every single data concerning your address, financial data or even health which was copied and sent to multiple locations around the world. Those pieces of paper are interconnected in a cryptographic way. They are constantly compared and “prescribed” on new datasheets. That means that the mathematic properties can assure that they cannot be removed, replaced or completely altered.

The mechanism does not only help us fight against the scams, but also allows us to learn about the external conditions such as the weather, which can be also verified by the use of the modern systems.

Chained data- how to keep it safe

According to the most recent report „IoT in Poland”, 47% of Poles are afraid that theirdata can be leaked and 33% of them are afraid of losing the control over their devices connected to the web. Will those anxieties be fixed by the blockchain? Perhaps this might be the foundation for the new network to which most of the modern devices will be connected to with the usage of IoT. Its almost impossible to hack the block of chains because of its complexity, while hacking the home WiFi only requires a moderate IT knowledge.

Currently, if we forget to turn off the sink, the only risk we create is potentially floodingour neighbours’ flat. However, if we forget about the safe usage of IoT devices, we are can potentially face much greater consequences like the risk of hacking the entirenetwork they are connected to. Without the blockchain we will be potentially risking not only the safety of our data, but also the data belonging to our clients. When will the ideal, safe and practical future unfold? No one can truly tell, but we must remain vigilant and teach the companies to slowly but steadily implement the blockchain technology.

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Nextrope on Economic Forum 2024: Insights from the Event

Kajetan Olas

14 Sep 2024
Nextrope on Economic Forum 2024: Insights from the Event

The 33rd Economic Forum 2024, held in Karpacz, Poland, gathered leaders from across the globe to discuss the pressing economic and technological challenges. This year, the forum had a special focus on Artificial Intelligence (AI and Cybersecurity, bringing together leading experts and policymakers.

Nextrope was proud to participate in the Forum where we showcased our expertise and networked with leading minds in the AI and blockchain fields.

Economic Forum 2024: A Hub for Innovation and Collaboration

The Economic Forum in Karpacz is an annual event often referred to as the "Polish Davos," attracting over 6,000 participants, including heads of state, business leaders, academics, and experts. This year’s edition was held from September 3rd to 5th, 2024.

Key Highlights of the AI Forum and Cybersecurity Forum

The AI Forum and the VI Cybersecurity Forum were integral parts of the event, organized in collaboration with the Ministry of Digital Affairs and leading Polish universities, including:

  • Cracow University of Technology
  • University of Warsaw
  • Wrocław University of Technology
  • AGH University of Science and Technology
  • Poznań University of Technology

Objectives of the AI Forum

  • Promoting Education and Innovation: The forum aimed to foster education and spread knowledge about AI and solutions to enhance digital transformation in Poland and CEE..
  • Strengthening Digital Administration: The event supported the Ministry of Digital Affairs' mission to build and strengthen the digital administration of the Polish State, encouraging interdisciplinary dialogue on decentralized architecture.
  • High-Level Meetings: The forum featured closed meetings of digital ministers from across Europe, including a confirmed appearance by Volker Wissing, the German Minister for Digital Affairs.

Nextrope's Active Participation in the AI Forum

Nextrope's presence at the AI Forum was marked by our active engagement in various activities in the Cracow University of Technology and University of Warsaw zone. One of the discussion panels we enjoyed the most was "AI in education - threats and opportunities".

Our Key Activities

Networking with Leading AI and Cryptography Researchers.

Nextrope presented its contributions in the field of behavioral profilling in DeFi and established relationships with Cryptography Researchers from Cracow University of Technology and the brightest minds on Polish AI scene, coming from institutions such as Wroclaw University of Technology, but also from startups.

Panel Discussions and Workshops

Our team participated in several panel discussions, covering a variety of topics. Here are some of them

  • Polish Startup Scene.
  • State in the Blockchain Network
  • Artificial Intelligence - Threat or Opportunity for Healthcare?
  • Silicon Valley in Poland – Is it Possible?
  • Quantum Computing - How Is It Changing Our Lives?

Broadening Horizons

Besides tuning in to topics that strictly overlap with our professional expertise we decided to broaden our horizons and participated in panels about national security and cross-border cooperation.

Meeting with clients:

We had a pleasure to deepen relationships with our institutional clients and discuss plans for the future.

Networking with Experts in AI and Blockchain

A major highlight of the Economic Forum in Karpacz was the opportunity to network with experts from academia, industry, and government.

Collaborations with Academia:

We engaged with scholars from leading universities such as the Cracow University of Technology and the University of Warsaw. These interactions laid the groundwork for potential research collaborations and joint projects.

Building Strategic Partnerships:

Our team connected with industry leaders, exploring opportunities for partnerships in regard to building the future of education. We met many extremely smart, yet humble people interested in joining advisory board of one of our projects - HackZ.

Exchanging Knowledge with VCs and Policymakers:

We had fruitful discussions with policymakers and very knowledgable representatives of Venture Capital. The discussions revolved around blockchain and AI regulation, futuristic education methods and dillemas regarding digital transformation in companies. These exchanges provided us with very interesting insights as well as new friendships.

Looking Ahead: Nextrope's Future in AI and Blockchain

Nextrope's participation in the Economic Forum Karpacz 2024 has solidified our position as one of the leading, deep-tech software houses in CEE. By fostering connections with academia, industry experts, and policymakers, we are well-positioned to consult our clients on trends and regulatory needs as well as implementing cutting edge DeFi software.

What's Next for Nextrope?

Continuing Innovation:

We remain committed to developing cutting-edge software solutions and designing token economies that leverage the power of incentives and advanced cryptography.

Deepening Academic Collaborations:

The partnerships formed at the forum will help us stay at the forefront of technological advancements, particularly in AI and blockchain.

Expanding Our Global Reach:

The international connections made at the forum enable us to expand our influence both in CEE and outside of Europe. This reinforces Nextrope's status as a global leader in technology innovation.

If you're looking to create a robust blockchain system and go through institutional-grade testing please reach out to contact@nextrope.com. Our team is ready to help you with the token engineering process and ensure your project’s resilience in the long term.

Monte Carlo Simulations in Tokenomics

Kajetan Olas

01 May 2024
Monte Carlo Simulations in Tokenomics

As the web3 field grows in complexity, traditional analytical tools often fall short in capturing the dynamics of digital markets. This is where Monte Carlo simulations come into play, offering a mathematical technique to model systems fraught with uncertainty.

Monte Carlo simulations employ random sampling to understand probable outcomes in processes that are too complex for straightforward analytic solutions. By simulating thousands, or even millions, of scenarios, Monte Carlo methods can provide insights into the likelihood of different outcomes, helping stakeholders make informed decisions under conditions of uncertainty.

In this article, we will explore the role of Monte Carlo simulations within the context of tokenomics.  illustrating how they are employed to forecast market dynamics, assess risk, and optimize strategies in the volatile realm of cryptocurrencies. By integrating this powerful tool, businesses and investors can enhance their analytical capabilities, paving the way for more resilient and adaptable economic models in the digital age.

Understanding Monte Carlo Simulations

The Monte Carlo method is an approach to solving problems that involve random sampling to understand probable outcomes. This technique was first developed in the 1940s by scientists working on the atomic bomb during the Manhattan Project. The method was designed to simplify the complex simulations of neutron diffusion, but it has since evolved to address a broad spectrum of problems across various fields including finance, engineering, and research.

Random Sampling and Statistical Experimentation

At the heart of Monte Carlo simulations is the concept of random sampling from a probability distribution to compute results. This method does not seek a singular precise answer but rather a probability distribution of possible outcomes. By performing a large number of trials with random variables, these simulations mimic the real-life fluctuations and uncertainties inherent in complex systems.

Role of Randomness and Probability Distributions in Simulations

Monte Carlo simulations leverage the power of probability distributions to model potential scenarios in processes where exact outcomes cannot be determined due to uncertainty. Each simulation iteration uses randomly generated values that follow a specific statistical distribution to model different outcomes. This method allows analysts to quantify and visualize the probability of different scenarios occurring.

The strength of Monte Carlo simulations lies in the insight they offer into potential risks. They allow modelers to see into the probabilistic "what-if" scenarios that more closely mimic real-world conditions.

Monte Carlo Simulations in Tokenomics

Monte Carlo simulations are instrumental tool for token engineers. They're so useful due to their ability to model emergent behaviors. Here are some key areas where these simulations are applied:

Pricing and Valuation of Tokens

Determining the value of a new token can be challenging due to the volatile nature of cryptocurrency markets. Monte Carlo simulations help by modeling various market scenarios and price fluctuations over time, allowing analysts to estimate a token's potential future value under different conditions.

Assessing Market Dynamics and Investor Behavior

Cryptocurrency markets are influenced by a myriad of factors including regulatory changes, technological advancements, and shifts in investor sentiment. Monte Carlo methods allow researchers to simulate these variables in an integrated environment to see how they might impact token economics, from overall market cap fluctuations to liquidity concerns.

Assesing Possible Risks

By running a large number of simulations it’s possible to stress-test the project in multiple scenarios and identify emergent risks. This is perhaps the most important function of Monte Carlo Process, since these risks can’t be assessed any other way.

Source: How to use Monte Carlo simulation for reliability analysis?

Benefits of Using Monte Carlo Simulations

By generating a range of possible outcomes and their probabilities, Monte Carlo simulations help decision-makers in the cryptocurrency space anticipate potential futures and make informed strategic choices. This capability is invaluable for planning token launches, managing supply mechanisms, and designing marketing strategies to optimize market penetration.

Using Monte Carlo simulations, stakeholders in the tokenomics field can not only understand and mitigate risks but also explore the potential impact of different strategic decisions. This predictive power supports more robust economic models and can lead to more stable and successful token launches. 

Implementing Monte Carlo Simulations

Several tools and software packages can facilitate the implementation of Monte Carlo simulations in tokenomics. One of the most notable is cadCAD, a Python library that provides a flexible and powerful environment for simulating complex systems. 

Overview of cadCAD configuration Components

To better understand how Monte Carlo simulations work in practice, let’s take a look at the cadCAD code snippet:

sim_config = {

    'T': range(200),  # number of timesteps

    'N': 3,           # number of Monte Carlo runs

    'M': params       # model parameters

}

Explanation of Simulation Configuration Components

T: Number of Time Steps

  • Definition: The 'T' parameter in CadCAD configurations specifies the number of time steps the simulation should execute. Each time step represents one iteration of the model, during which the system is updated. That update is based on various rules defined by token engineers in other parts of the code. For example: we might assume that one iteration = one day, and define data-based functions that predict token demand on that day.

N: Number of Monte Carlo Runs

  • Definition: The 'N' parameter sets the number of Monte Carlo runs. Each run represents a complete execution of the simulation from start to finish, using potentially different random seeds for each run. This is essential for capturing variability and understanding the distribution of possible outcomes. For example, we can acknowledge that token’s price will be correlated with the broad cryptocurrency market, which acts somewhat unpredictably.

M: Model Parameters

  • Definition: The 'M' key contains the model parameters, which are variables that influence system's behavior but do not change dynamically with each time step. These parameters can be constants or distributions that are used within the policy and update functions to model the external and internal factors affecting the system.

Importance of These Components

Together, these components define the skeleton of your Monte Carlo simulation in CadCAD. The combination of multiple time steps and Monte Carlo runs allows for a comprehensive exploration of the stochastic nature of the modeled system. By varying the number of timesteps (T) and runs (N), you can adjust the depth and breadth of the exploration, respectively. The parameters (M) provide the necessary context and ensure that each simulation is realistic.

Messy graph representing Monte Carlo simulation, source: Bitcoin Monte Carlo Simulation

Conclusion

Monte Carlo simulations represent a powerful analytical tool in the arsenal of token engineers. By leveraging the principles of statistics, these simulations provide deep insights into the complex dynamics of token-based systems. This method allows for a nuanced understanding of potential future scenarios and helps with making informed decisions.

We encourage all stakeholders in the blockchain and cryptocurrency space to consider implementing Monte Carlo simulations. The insights gained from such analytical techniques can lead to more effective and resilient economic models, paving the way for the sustainable growth and success of digital currencies.

If you're looking to create a robust tokenomics model and go through institutional-grade testing please reach out to contact@nextrope.com. Our team is ready to help you with the token engineering process and ensure your project’s resilience in the long term.

FAQ

What is a Monte Carlo simulation in tokenomics context?

  • It's a mathematical method that uses random sampling to predict uncertain outcomes.

What are the benefits of using Monte Carlo simulations in tokenomics?

  • These simulations help foresee potential market scenarios, aiding in strategic planning and risk management for token launches.

Why are Monte Carlo simulations unique in cryptocurrency analysis?

  • They provide probabilistic outcomes rather than fixed predictions, effectively simulating real-world market variability and risk.