What is blockchain?

BLOCKCHAIN

Introduction : Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, and land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.

Why blockchain is important: Business runs on information. The faster it’s received and the more accurate it is, the better. Blockchain is ideal for delivering that information because it provides immediate, shared, and completely transparent information stored on an immutable ledger that can be accessed only by permissioned network members. A blockchain network can track orders, payments, accounts, production, and much more. And because members share a single view of the truth, you can see all details of a transaction end to end, giving you greater confidence, as well as new efficiencies and opportunities.

Key elements of blockchain :

  • Distributed ledger technology: All the network participants have access to the distributed ledger and its immutable record of transactions. With this shared ledger, transactions are recorded only once, eliminating the duplication of effort that’s typical of traditional business networks.
  • Immutable records: No participants can change or tamper with a transaction after its been recorded to the shared ledger. If a transaction record includes an error, a new transaction must be added to reverse the error, and both transaction are then visible.
  • Smart contracts: To speed transactions, a set of rules- called a smart contract[1]is stored on the blockchain and executed automatically. A smart contract can define conditions for corporate bond transfer, include terms for travel insurance to be paid and much more.

How blockchain works:

  • As each transaction occurs, it is recorded as a “block” of data : Those transactions show the movement of an asset that can be tangible (a product) or intangible (intellectual). The data block can record the information of your choice: who, what, when, where, how much, and even the condition — such as the temperature of a food shipment.
  • Each block is connected to the ones before and after it : These blocks form a chain of data as an asset moves from place to place or ownership changes hands. The blocks confirm the exact time and sequence of transactions, and the blocks link securely together to prevent any block from being altered or a block being inserted between two existing blocks.
  • Transactions are blocked together in an irreversible chain: a blockchain : Each additional block strengthens the verification of the previous block and hence the entire blockchain. This renders the blockchain tamper-evident, delivering the key strength of immutability. This removes the possibility of tampering by a malicious actor — and builds a ledger of transactions you and other network members can trust.

Benefits of blockchain :

What needs to change: Operations often waste effort on duplicate record keeping and third[1]party validations. Record-keeping systems can be vulnerable to fraud and cyberattacks. Limited transparency can slow data verification. And with the arrival of IoT, transaction volumes have exploded. All of this slows business, drains the bottom line -and means we need a better way. Enter blockchain.

  • Greater trust : With blockchain, as a member of a members-only network, you can rest assured that you are receiving accurate and timely data, and that your confidential blockchain records will be shared only with network members to whom you have specifically granted access.
  • Greater security : Consensus on data accuracy is required from all network members, and all validated transactions are immutable because they are recorded permanently. No one, not even a system administrator, can delete a transaction.
  • More efficiencies : With a distributed ledger that is shared among members of a network, time-wasting record reconciliations are eliminated. And to speed transactions, a set of rules — called a smart contract — can be stored on the blockchain and executed automatically.

Types of blockchain networks: There are several ways to build a blockchain network. They can be public, private, and permissioned or built by a consortium.

  • Public blockchain networks
  • Private Blockchain networks
  • Permissioned blockchain networks
  • Consortium blockchain

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