what is blockchain?
a blockchain is an encrypted, shared immutable record of data managed by a distributed network of computers.
the ledger of records is used for information about transactions, suppliers, partners, customers, goods, services, money, or any type of data. parties are able to monitor and analyze the status of the ledger, including the information it contains, continuously in near real-time.
in its purest decentralized structure, a blockchain network has no central authority. it is the very definition of a democratized system. the information in it is open for anyone and everyone to see while ensuring the security of the data and the anonymity of the participants. variations of blockchain structure can be more centralized with the access to its network and information limited by specified permissions.
the power and trust of the network is in the interdependency and mutual interest of its participants instead of vested in a central entity. it is the epitome of a peer-to-peer and business-to-business model.
blockchain has the potential to significantly transform business by simplifying how we transact in money, data, goods and services.
blockchain is a form of Distributed Ledger Technology (DLT)
differentiating benefits of blockchain
security
transparency
transparency
data is impenetrably encrypted and linked to an immutable audit trail. the distributed structure avoids a single point of compromising the data. alterations to any past transaction requires the concurrence of the entire network to simultaneously change any record and all subsequent transactions.
transparency
transparency
transparency
records are open and available, along with the history of their creation, while encryption maintains the privacy and anonymity of the parties. customers own and control their data and can choose to engage with distributed services. this facilitates unparalleled collaboration and trust.
efficiency
transparency
efficiency
business processes for decisions and transactions are faster and cheaper since reconciliation of ledgers is not necessary. third party facilitators are eliminated and automation is more feasible. agreements and transactions between parties can be facilitated through automated smart contracts integrated into the blockchain itself.
how blockchain works
the ledger
a record of information is inserted in a bundle of records called a block, and blocks are linked together sequentially into a chain. the result is a detailed audit trail as the chain grows over time. the longer the chain, the more secure it becomes.
the encryption
the chain consists of blocks of data of a strictly uniform format, confirmed to be submitted by authenticated sources in the network and then encrypted. each block has a cryptographic authentication signature called a “hash” validating the authenticity of the block and linking it to the chain.
the network
the network managing the information is distributed and the participants interact with each other directly, peer-to-peer, instead of through the authority of a central entity acting as a clearing house. multiple simultaneous copies of the ledger exist instead of one master copy in the possession of a central authority. the copies are maintained by authenticated parties called "nodes" distributed across the network.
reconciliation with a central authority is unnecessary. compromise of a single ledger is eliminated through multiple synchronized and secure copies. access to the network is private and users are authenticated through their encrypted "keys".
industries being disrupted by blockchain
financial services
supply chain management
supply chain management
the most widely known example of blockchain is bitcoin and cryptocurrency. blockchain tracks the ownership of the currency or assets and facilitates peer-to-peer worldwide exchange and transfer of funds instantaneously and inexpensively, eliminating the need for a bank and clearing house. traditional financial institutions are also investing in the technology to transact with one another. other applications are gift cards and utility-based tokens for the exchange of goods and services.
supply chain management
supply chain management
supply chain management
any industry with a supply chain can use blockchain. the history of a product or service from creation, movement through the supply chain, and delivery to the customer is maintained and accessible. logistics, record keeping, and analytics are real-time and robust. customers can be assured the product they have is authentic and its origin is validated. everything from jewelry to wine, and consumer goods to energy is exploring blockchain for supply chain management.
health care
supply chain management
health care
electronic medical records are securely stored and meticulously controlled. interoperability within the healthcare industry is improved though consistent, authenticated information. diagnostics and research is more feasible, thus improving treatment. individuals own their health information and are more involved as a stakeholder, both medically and economically.
real estate
personal identity
health care
property ownership records are securely stored and tracked on blockchain. proof of ownership, title research and insurance are streamlined. transaction costs are reduced. terms and conditions of sale, transfer and ownership can be automated through smart contracts integrated in the blockchain.
personal identity
personal identity
personal identity
one single record of identity owned by the individual, private, secure, authenticated and encrypted. the individual allows entities requiring verification of identity to access only the appropriate infomation to do so. duplication, delay, sychronization, and fraudulent identity issues are eliminated. identity can be authenticated immediately worldwide.
voting
personal identity
personal identity
a vote is viewed as the transfer of information to cast a ballot. blockchain can create tamper-proof election returns with an immutable audit trail. the first usage of this is already in development for private corporation shareholder voting. political elections in the public sectors are a natural application for blockchain.