Well, the practice of using ledgers for record keeping is not new. Rather, it’s as old as the concept of bookkeeping itself. And, in spite of the increasing variety of complicated DLT in use, the good news is that the essential architecture is not that tough to comprehend.
A distributed ledger is a databank that is spread across multiple locations, commonly known as nodes. Alterations to a distributed ledger entail multiple strides of verification by the nodes. Once a ledger entry is authenticated by a major accord of the bulges, the entry cannot be changed. Then, the distributed systems make the best use of an allied network of devices and databases to share authority with each node. This makes space for shared accountability and the pooling of resources to accomplish the ledger.
The benefits provided by blockchain data ledger technology are manifold. When they are pertinent for all kinds of IoT solutions, they also make sure the trading activity becomes increasingly high-speed and digitalized.
Using a distributed architecture with DLT that empowers devices to connect directly with each other will certainly improve the capabilities of device management. By integrating peer-to-peer flow rather than opting for a central broker, actions like allotting software patches, firmware updates, and security fixes can be propagated in a highly measured as well as efficient manner.
Applying a distributed network into an IoT ecosystem has essential security advantages to offer. Centralized networks tend to form a single point of failure for all connected services, while devices on a distributed network are more independent as well as self-directed and not dependent on a primary system. Any spiteful attempts to modify or revile a distributed database would require diffusion of a majority of connected nodes, thereby making it almost impossible to hack.
At the same time, transparency is another significant thing to consider, whenever it’s about blockchain distributed ledger technology. With this technology in use, transaction histories are becoming more translucent as well as effective. The fact that blockchain is a type of distributed ledger makes all network participants share the same credentials as opposed to discrete copies. That shared category can only be modernized through unanimity. And, simultaneously, changing a single transaction record would demand the modification of all succeeding records and the connivance of the entire network. Thus, data on a blockchain is more precise, reliable and apparent than when it is driven through paper-heavy processes. It is also accessible to all of them having permissioned access.
Also, in case, your business deals with products that are traded through a complicated supply chain, you might experience how hard it can be dash an item back to its source. But, when exchanges of goods are logged on a blockchain, you would ultimately end up with an audit trail that displays the ins and outs of an asset. And, this historical transaction is really important in detecting fraud.
By wielding in a shared P2P economy, as modifications to the database are processed, each participant node on an IoT network utilizes its own processing power to approve each call. With approximately thousands of inter-connected nodes aiding compute power in handling a single call, this has quite significant cost saving insinuations for ventures spending huge amounts of money to retain, revise, and append a consolidated service.
With data ledger technology on board, users can experience indelibility of the ledger, thereby having the leverage of auditing all events in the ledger. At the same time, changes to the ledger that have been successfully validated cannot be amended or removed which, in turn, ascertains the precision and reliability of the record. This top-end features of DLT is of particular benefit to IoT solutions that involve important financial transactions or implicate different parties along the supply chain.
Blockchain data ledger technology initiates smart contracts too. Smart contracts are a reckoning practice that automatically follow through a specified action between related applications. However, for this, the predefined conditions have to merge together. As for an instance, consumer products like smart TVs might use smart contracts to pull off an automatic command to acquaint the manufacturer when performance checking is crossing the bar of normal plumbs. Again, tracking of goods along a supply chain can also be considered as a smart example of smart contracts.
Last but not the least; data reliability is again one of the most significant advantages offered by data ledger technology. Especially, for studying key performance indicators (KPIs) that entail enhanced security on board, DLT helps in more than one way. As alterations made to a distributed database need to go through several tiers of DLT authentication, the risk of imprecise or scrap data being expended for analytics is greatly minimized. Having highly consistent and tenable data is actually important for IoT solutions that have a supply chain taking in connected construction as well as logistics.
However, the experts in the domain have it to state that IoT is still in its kick-off phase, but the market it has taken up clearly states that this mini giant would showcase exponential growth very soon. As the band of IoT applications keeps rising, so does the challenges against growth. Blockchain distributed ledger technology comes as a savior here. It allows enterprises to pave way for high-end IoT solutions that offer extra security, device management, cost savings, condensed connectivity bottlenecks, upgraded contracts, audit trails, and enhanced data reliability.
According to Allied market research, the global market of blockchain distributed ledger market is expected to grow at significant CAGR from 2017-2023. The factors that have contributed to the growth of the market include insignificant fees for transaction in blockchain distributed ledger applications, riddance of third parties in business deals, and less chances of fraud & identity theft. Moreover, better security measurements and enhanced capital optimization are anticipated to give a boost to the blockchain distributed ledger market. At the same time, increase in awareness toward blockchain distributed ledger applications among people has happened to create a number of opportunities in the segment.
To conclude, we can state that the blockchain distributed ledger market is still at a budding stage and in the years to come, it would proliferate yet more.
Koyel Ghosh is a blogger with a strong passion and enjoys writing on miscellaneous domains, as she believes it lets her explore a wide variety of niches. She has an innate interest in creativity and enjoys experimenting with different writing styles. A writer who never stops imagining, she has been serving the corporate industry for the last 3 years.