by Preeti Nahar
Posted on May 09, 2018 at 03:00 PM
Blockchain is a platform for handling digital assets. You can think of it as an online ledger. It works on a concept of distributed databases which are accessible to multiple entities at a time rather than a central authorized entity.
Each “block” represents a set of transactions and “chain” ties them all together. A distributed network of computers verifies these blocks and pair them with previous block in the chain, thereby creating a chain of blocks or “Blockchain”.
It is essentially based on distributed networks so no single entity has control over it. This is important as it confirms that no single person can go back in the history of the chain and alter a block. That’s why blockchain is termed as a “public ledger” which cannot be easily tampered. So, it has a built-in data security.
Bitcoin made its first appearance in 2009, bringing together the concept of Blockchain, with digital currency that wasn’t controlled by any one individual or organization.
Having said that, Blockchain is not limited to cryptocurrencies. Blockchain could end up transforming a number of industries, from Healthcare to Politics to Manufacturing to Governance.
With Blockchain-based timestamping of a date and location, transparency is confirmed, so even a supply chain industry can make effective use of this technology and provide necessary information to the consumers of their products.
There are some clear advantages of adopting Blockchain as a technology in businesses.
Since the data is distributed over the network and anyone can alter it, it is very difficult to alter the data without anyone noticing the changes made. This makes it a secure technology.
As there is no middle entity involved in processing the transaction from source to destination, costs in processing the transaction is reduced.
Since the data is distributed and is authorized by multiple entities, even if it lands into unwanted hands, only small piece of data would be compromised and not the entire network. This also ensures that there is no single point of failures thus making it reliable.
Before making use of blockchain, some considerations need to be addressed as follows,
Computer networks that verify each block need tremendous computing power.
Time needed to verify blocks in a chain is another aspect to be addressed. Sometimes it goes above one day.
Since Blockchain is an upcoming technology, resolving challenges of transaction speed, verification process and data limits is crucial to make it widely acceptable.
Blockchain offer reduced transaction costs but initial capital costs to implement are higher.
So, overall, Blockchain seems to be an exciting yet promising technology to adopt to, once the current challenges are resolved.