What is Blockchain Technology?
It seems like where ever you look you see articles about blockchain these days. Whether you follow technology news or not, you have probably already heard about bitcoin or cryptocurrency and blockchain technology. But what does blockchain mean? How can blockchain technology be used in business?
In the most basic sense, blockchain is a way to structure and store digital information. Just like its name suggests, it is a chain of blocks where every block records information about the recent transactions. Each block is connected to the other blocks in chronological order, creating a long chain of stored data. The unique thing about this technology is that the chain of blocks is synched and stored in a network of computers all around the world – basically decentralizing the information thus making it more secure.
How is Blockchain Secure?
Blockchain transactions need computing for special hash keys to be generated. A hash is a unique code made up of numbers and letters specific to each block. In order to do this computing, a network of volunteer computers is needed. These are called nodes. When a transaction happens, each node will get a copy of the detail of the transaction which is basically a “public ledger”. Every transaction gets validated by every computer in the network. When the transaction is validated, it will be sealed with its own unique hash key (which is a combination of other keys including the previous transaction’s hash key) and stored as a block and added to the chain. Then all the nodes in the network is updated with the most recent blockchain.
If any information inside the block is altered at any time by one of the computers, the hash will change drastically. This would make that block not fit in correctly in the blockchain. So that altered version of the block will be rejected by the network automatically.
How Can Businesses Use Blockchain? What are the benefits?
Blockchain is essentially a digital register of transactions, deals, contracts and all those things of value which can be represented in the form of digital asset. Any business that deals with online transactions can implement the blockchain technology for its several important benefits:
It is distributed:
Blockchain’s main principle is sharing a system of record among participants on a network. This eliminates the need to reconcile disparate ledgers.
It is decentralized:
There isn’t any “owner” of the information, or any middleman to validate the transactions. The records are shared equally.
It is permissioned:
Each participant of the network has equal access rights so that confidential information is shared on a need-to-know basis.
It is secure:
Validation is required from all network members, and all validated transactions are permanently recorded. No one, not even a system administrator, can delete a transaction or tamper with existing data.
Summing it up, blockchain is a digital database that can make any kind of deals or transactions more transparent and secure without the need for a middleman. Blockchain technology is a great solution when multiple parties all across the world, need to share data and transfer value without needing to trust each other. It’s that simple.
If you are interested in incorporating the blockchain into your business, contact us to discuss how we can help you move forward with the latest technologies.
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