A blockchain is “a distributed database that maintains a continuously growing list of ordered records, called blocks.” These blocks “are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network.
|
While blockchain is still largely confined to use in recording and storing transactions for cryptocurrencies such as Bitcoin, proponents of blockchain technology are developing and testing other uses for blockchain, including these:
Blockchain for payment processing and money transfers. Transactions processed over a blockchain could be settled within a matter of seconds and reduce (or eliminate) banking transfer fees.
Blockchain for monitoring of supply chains. Using blockchain, businesses could pinpoint inefficiencies within their supply chains quickly, as well as locate items in real time and see how products perform from a quality-control perspective as they travel from manufacturers to retailers.
Blockchain for digital IDs. Microsoft is experimenting with blockchain technology to help people control their digital identities, while also giving users control over who accesses that data.
Blockchain for data sharing. Blockchain could act as an intermediary to securely store and move enterprise data among industries.
Blockchain for copyright and royalties protection. Blockchain could be used to create a decentralized database that ensures artists maintain their music rights and provides transparent and real-time royalty distributions to musicians. Blockchain could also do the same for open source developers.
Blockchain for Internet of Things network management. Blockchain could become a regulator of IoT networks to “identify devices connected to a wireless network, monitor the activity of those devices, and determine how trustworthy those devices are” and to “automatically assess the trustworthiness of new devices being added to the network, such as cars and smartphones.”
Blockchain for healthcare. Blockchain could also play an important role in healthcare: “Healthcare payers and providers are using blockchain to manage clinical trials data and electronic medical records while maintaining regulatory compliance.”
WHAT ARE BUSINESS BENEFITS OF BLOCK CHAIN TECHNOLOGY
The primary benefit of blockchain is as a database for recording transactions, but its benefits extend far beyond those of a traditional database. Most notably, it removes the possibility of tampering by a malicious actor, as well as providing these business benefits:
Time savings. Blockchain slashes transaction times from days to minutes. Transaction settlement is faster because it doesn’t require verification by a central authority.
Cost savings. Transactions need less oversight. Participants can exchange items of value directly. Blockchain eliminates duplication of effort because participants have access to a shared ledger.
Tighter security. Blockchain’s security features protect against tampering, fraud, and cybercrime.
BLOCK CHAIN EXPLAINED
As described in Blockchain for Dummies, “Blockchain owes its name to the way it stores transaction data—in blocks linked together to form a chain. As the number of transactions grows, so does the blockchain. Blocks record and confirm the time and sequence of transactions, which are then logged into the blockchain, within a discrete network governed by rules agreed to by the network participants.
“Each block contains a hash (a digital fingerprint or unique identifier), timestamped batches of recent valid transactions, and the hash of the previous block. The previous block hash links the blocks together and prevents any block from being altered or a block being inserted between two existing blocks.” In theory, the method renders the blockchain tamperproof.
The four key concepts behind blockchain are:
Shared ledger. A shared ledger is an “append-only” distributed system of record shared across a business network. “With a shared ledger, transactions are recorded only once, eliminating the duplication of effort that’s typical of traditional business networks.”
Permissions. Permissions ensure that transactions are secure, authenticated, and verifiable. “With the ability to constrain network participation, organizations can more easily comply with data protection regulations, such as those stipulated in the Health Insurance Portability and Accountability Act (HIPAA)” and the EU General Data Protection Regulation (GDPR).
Smart contracts. A smart contract is “an agreement or set of rules that govern a business transaction; it’s stored on the blockchain and is executed automatically as part of a transaction.”
Consensus. Through consensus, all parties agree to the network-verified transaction. Blockchains have various consensus mechanisms, including proof of stake, multisignature, and PBFT (practical Byzantine fault tolerance).
Each blockchain network has various participants who play these roles, among others:
Blockchain users. Participants (typically business users) with permissions to join the blockchain network and conduct transactions with other network participants.
Regulators. Blockchain users with special permissions to oversee the transactions happening within the network.
Blockchain network operators. Individuals who have special permissions and authority to define, create, manage, and monitor the blockchain network.
Certificate authorities. Individuals who issue and manage the different types of certificates required to run a permissioned blockchain.
To Simplify more, we can say : Imagine a giant spreadsheet that everyone can access and see. This spreadsheet tracks things like money transfers, contracts, or even ownership of a house. Instead of being stored on one computer, like a bank's server, this spreadsheet is copied and distributed across a huge network of computers. This is kind of like how Wikipedia works, where anyone can contribute and the information is public.
Here's what makes this special:
Security: Everyone has a copy of the spreadsheet, so it's very difficult to change or tamper with any information. If someone tries to mess with one copy, everyone else will know.
Transparency: Anyone can see what's happening on the spreadsheet. This creates trust because everything is out in the open.
No middleman: With blockchain, you can transfer things directly between each other, without needing a bank or other institution in the middle.
This is blockchain technology in a nutshell. It's a secure way of recording information and transactions without needing a central authority to keep things honest.
Comentários