What is Blockchain technology and why is it considered so revolutionary that more and more industries are adopting it to optimise their operational efficiencies? It is because there are specific inbuilt attributes in Blockchain that has made it a very robust and powerful technology.
What is Blockchain
In very basic terms, Blockchain is the process of maintaining a continuously growing database and volume of records through a series of blocks. Every block in the chain has a timestamp and is linked to the previous block. All subsequent ones added to the chain have to be validated with this whole database being closely supervised through a peer-to-peer network.
By its very structure, a Blockchain is resistant to modifications. Once a data is recorded, it cannot be altered retroactively without changing all subsequent blocks, thereby making it a very secure system. This high safety attribute has made Blockchain technology the much-preferred option today for recording events, processing transactions, maintaining medical, financial and land records and other record management activities.
Main features of Blockchain technology
The main features of Blockchain technology can be categorised as follows –
- Highly Secure, resistant to fraud – Its very structure makes Blockchain resistant to deceptions and impervious to manipulation. Increasing volume of records and continually growing database are built through a series of blocks. Every block has a timestamp and is linked to the previous block in a chain. The next ones in the built-up have to be validated through a peer-to-peer network.
Once a data is recorded in the Blockchain, it cannot be altered retroactively without modifying all the subsequent blocks.
There is here, a clear distinction between here between public and private Blockchain domains.
Bitcoin is a public Blockchain, and the prevailing system of recording transactions allows anyone to read or write records. By solving a complex cryptographic puzzle, it is possible to aggregate and publish those transactions. Every solution forms the basis of the next problem that has to be addressed.
Private Blockchain, on the other hand, is widely followed primarily in the financial sector. It allows operators to control who can read the ledger of verified transactions, submit transactions or check them. It helps to bring together markets where individual parties do not have implicit trust in one another. These include Blockchain systems that support commodities trading, private equity distribution and land and physical asset registries.
- Shared Blockchain – Blockchain technology can securely run software and applications even in a decentralised environment. Hence, the need for a centralised server is eliminated as it can be used on a peer-to-peer network that is not controlled by a single entity. It can also be used to organise activities of a large number of individuals without the intervention of a third party. Hence it is easy for every person in a group to coordinate common actions and interact directly with one another in a highly optimised, secure and decentralised business environment.
Today, many applications are run on Blockchain, some of which are distributed social networks like Facebook. These platforms are operated in a decentralised manner with independent groups of peers coordinating amongst themselves exclusively through a set of code based rules laid down in Blockchain.
What Blockchain technology does is replace the traditional top-down hierarchical business models with a system that is the reverse or bottom-up system of distribution. Here, many people create a common goal and are duly compensated for contributions and efforts.
- Distributed Blockchain – Distributed Blockchain technologies are very useful in Government transactions, ranging from maintaining record and land registries, the collection of taxes and issuing passports, and authenticating and delivering services in the healthcare sector. Individual customers can know who has assessed their records and can accordingly control the right of entry.
Further, distributed ledgers are also less susceptible to cyber attacks than a single database. This is because of the existence of multiple shared copies of the same database that has to be tampered with simultaneously for any attack to be successful. Additionally, all participants can share information and be sure that all copies of ledgers match with each other. For the business community, distributed ledgers guarantee ownership and provenance for goods and intellectual property.
The term “distributed” needs to be elaborated. It is often thought that since the database is distributed, there is no single exclusive owner or authority. However, since the design of the ledgers is not standardised, they have varying levels of decentralization and types of access controls to match specific business requirements. The primary ones are un-permission ledgers that cannot be owned and where everyone can add to the database and “permission” ones that have fixed owners and only they can add to and verify the contents. When agencies like BlockchainAustralia.com.au provides operating solutions to businesses based on the Blockchain platform, the type of the ledger that will optimise operational activities is primarily on their minds.
- Ledger in Blockchain – A Blockchain is a form of a distributed ledger and comprises of databases where access control and data evolution are shared between owners and individuals.
Ledgers in Blockchain can be categorized into specific groups. The first is the centralised ledger where a single entity has total control. The second is the distributed ledger that permits shared control over the development of data which again has two options. One is where data is distributed to all participants through Private Bitcoin Blockchain, Private Bitcoin-y Blockchain, Public Ethereum Blockchain, and the Private Ethereum-y Blockchain. The other is where information is not distributed to all participants and is known as R’3s Corda.
A ledger has append-only properties and is a record of every transaction made.
These then are the basics on which the whole concept of Blockchain rests and is instrumental in making it such a robust and revolutionary technology.
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