fbpx

What is Blockchain Technology?

blockchain

Fundamentals of the Blockchain

Blockchain is a distributed, unchangeable ledger that makes the process of recording transactions and tracking assets in a corporate network more easier. A tangible asset (a house, car, cash, or land) can be intangible (intellectual property, patents, copyrights, branding). On a blockchain network, virtually anything of value may be recorded and traded, lowering risk and cutting costs for all parties involved

The importance of blockchain: Information is the lifeblood of business. The faster and more accurate it is received, the better. Because it delivers immediate, shareable, and entirely transparent information kept on an immutable ledger that can only be viewed by permissioned network users, blockchain is excellent for delivering that information. Orders, payments, accounts, production, and much more may all be tracked using a blockchain network. You can see all facts of a transaction end to end since members share a single view of the truth, providing you greater confidence as well as additional efficiencies and opportunities.

The essential components of a blockchain

Technology based on distributed ledgers

The distributed ledger and its immutable record of transactions are accessible to all network participants. Transactions are only recorded once with this shared ledger, eliminating the duplication of effort that is common in traditional corporate networks.

Records that cannot be changed

After a transaction has been logged to the shared ledger, no participant can edit or tamper with it. If a mistake is found in a transaction record, a new transaction must be made to correct the error, and both transactions must then be visible.

Contracts that are smart

A collection of rules called a smart contract is stored on the blockchain and executed automatically to speed up transactions. A smart contract can specify requirements for corporate bond transfers, as well as payment terms for trip insurance.

How does the blockchain work?

Each transaction is logged as a “block” of data as it occurs.

These transactions depict the movement of a tangible (a product) or intangible asset (intellectual). The data block can store any information you want, including who, what, when, where, how much, and even the state of a shipment, such as the temperature.

Each block is linked to the ones that came before it and those that came after it.

As asset transfers from one location to another or ownership changes hands, these blocks form a data chain. The blocks validate the exact timing and sequence of transactions, and they are securely linked together to prevent any block from being changed or inserted between two other blocks.

In an irreversible chain, transactions are blocked together: a distributed ledger technology

Each successive block reinforces the prior block’s verification, and hence the entire blockchain. The blockchain becomes tamper-evident as a result, giving the key strength of immutability. This eliminates the risk of tampering by a hostile actor, and creates a trusted record of transactions for you and other network users.

Blockchain’s Advantages

What should be changed: Duplicate record keeping and third-party validations waste a lot of time in operations. Fraud and cyberattacks can make record-keeping systems susceptible. Data verification might be slowed by a lack of openness. And, with the advent of the Internet of Things, transaction volumes have skyrocketed. All of this slows business and depletes the bottom line, indicating that we need to find a better solution. Then there’s the blockchain.

  1. Higher levels of trust: As a member of a members-only network, you can trust that you will receive accurate and timely data from blockchain, and that your confidential blockchain records will be shared only with network members to whom you have specifically authorized access.
  2. Enhanced safety: All network participants must agree on data accuracy, and all confirmed transactions are immutable because they are permanently recorded. A transaction cannot be deleted by anyone, not even the system administrator.
  3. Enhanced efficiencies: Time-consuming record reconciliations are eliminated with a distributed ledger shared across network participants. A collection of rules called a smart contract can be placed on the blockchain and implemented automatically to speed up transactions.

There are various types of blockchain networks.
A blockchain network can be built in a variety of ways. They can be public, private, permissioned, or constructed by a group of people.

Blockchain networks open to the public: A public blockchain, such as Bitcoin, is one that anybody may join and participate in. Significant computer power is required, there is little or no privacy for transactions, and security is inadequate. These are crucial considerations for blockchain use cases in the industry.

 

 

Networks of private blockchains: A private blockchain network is a decentralized peer-to-peer network, analogous to a public blockchain network. However, the network is governed by a single organization, which determines who is authorized to participate, implements a consensus procedure, and maintains the shared ledger. Depending on the use case, this can greatly increase participant trust and confidence. A private blockchain can be used within a company’s firewall and even hosted on-site.

 

 

Blockchain networks with permissions: A permissioned blockchain network is typically set up by businesses who create a private blockchain. It’s worth noting that public blockchain networks can be permissioned as well. This limits who is authorized to engage in the network and what transactions they can do. To participate, participants must first get an invitation or authorization.

 

 

Blockchains in collaboration

The upkeep of a blockchain can be shared across multiple companies. Who can submit transactions or access data is determined by these pre-selected organizations. When all members need to be permissioned and share responsibility for the blockchain, a consortium blockchain is perfect.

Security on the blockchain

Blockchain network risk management systems

When developing an enterprise blockchain application, it’s critical to have a well-thought-out security plan that employs cybersecurity frameworks, assurance services, and best practices to mitigate the risk of attacks and fraud.

 

Share
Share
Tweet

Related Posts

Authors

kyel
Kyle
a
Jin

About INCC

We trust that your children’s futures will be brighter if they have an excellent education in technology. Our goal is simple: to inspire kids to create the future via mind-blowing technology experiences. Children’s technical and artistic ambitions can be realized by our experts in the fields of videogame programming and cartoon animation.