Defining in simple words; Blockchain is the type of spreadsheet that stores information regarding the transactions of the community. Each transaction generates a hash and every block refers to the previous one.
If we define it more technically; it is distributed ledger technology (DLT), that makes the history of any digital asset unalterable and transparent through the use of cryptographic hashing.
Google Doc can be taken as an example of blockchain. It provides access to every individual to whom it is shared and ensures transparency to any changes made inside the document. In real time the changed part of the document can be seen variated in real time.
Why Blockchain Is Important For Business?
Here are some reasons that make blockchain the most important technology that must be adopted in 2020 for business.
This is one of the most remarkable attributes. Especially in case of money transactions. The system is almost unhackable because of multiple layers and copies of the existing information. It is hard to cause any fraudulent change. Everyone can keep an eye on ongoing transactions.
Blockchain transactions are secured by cryptography. A transaction in a block takes place by assigning a private key and then verified with a public key. Changing any information can cause the key numbers to change so it won’t remain valid for the public key allocated for the previously allotted private key. Now the signature becomes invalid and it can’t be transferred in the chain. The hash function can be really helpful in this regard. Whenever anything is written on the ledger, a hash function is called that generates a unique set of strings for every written line. If the line is changed a new hash would be generated. So, if someone inside the community tries to mess with others ledgers. It would not be allowed by the blockchain.
The following mechanism shows the signing and verification of signature on the blockchain sheet.
The record once scribbled inside the ledger can’t be changed. According to IBMs description, “When exchanges of goods are recorded on a blockchain, you end up with an audit trail that shows where an asset came from and every stop it made on its journey.” For more information you can read this blog.
Any transaction done is automatically recorded inside the blockchain. Any changes that occur are also recorded and saved in real time. If you see the blockchain ledger it gives you a complete timeline of activities that has happened. You can even transfer your money securely and efficiently with the help of blockchain. This is how transactions happen in blockchain.
Now, here is where it gets really exciting! To use the example from before ( the pool of people with ledgers) imagine that same pool of people as a self completing automated application. This is a smart contract or a self executing contract built on a blockchain. Essentially, on a smart contract when “INPUT A” is delivered “OUTPUT B” is instantly completed without delay. This makes the transfer of assets such as land deeds, records, intellectual properties and others not only possible on a blockchain but faster and more efficient when compared to conventional means.
Excellent Use Cases
Blockchain technology is not confined to a specific use-case. It can work in the health, government, marketing, banking and trading sectors. There are many more areas where blockchain can be adopted for secure, efficient and successful transactions. This makes the blockchain a unique and desiring technology.
Business grows with the adoption of newness. And when it comes to security everyone wants a system that is more reliable and secure. So, implement blockchain for better and secure business transactions.