Blockchain is a technology for building a shared, immutable ledger that is deployed to implement the process of recording transactions and tracking assets in a network. There are two categories of assets, i.e., tangible or intangible products. Generally and virtually, anything of value can be stored, tracked, and traded on a blockchain network, providing reliability, mitigating risk, and reducing costs.
Business operates based on information which is represented by data. The faster it’s received and the more accurate it is, the better. Blockchain is ideal for delivering that data because it provides immediate, shared, and completely transparent data stored on an immutable ledger that can be accessed only by permissioned network members. A blockchain network can keep track of orders, payments, accounts, production, and much more. Because members share a single view of the truth and no one can manipulate or control the network, you can see all details of a transaction end to end, bringing you greater confidence, as well as new efficiencies and opportunities.
2- Technical Overview
Main components of a blockchain
Distributed ledger technology
All network members have the permission to access the distributed ledger and its immutable record of transactions. With this shared ledger, transactions are recorded only once, eliminating the possibility of duplication of effort that commonly occurs in traditional business networks.
No member can change or interfere with a transaction after it’s been recorded to the shared ledger. If a transaction record contains an error, a new transaction must be added to reverse the error, and both transactions are then visible.
To speed up transactions for blockchain networks, a set of rules — called a smart contract — is constructed and stored on the blockchain and executed automatically. A smart contract can define conditions for corporate bond transfers, include terms for travel insurance to be paid and much more.
3- How blockchain works
As each transaction is generated, it is recorded as a “block” of data
Those transactions display the movement of an asset that can be tangible (a physical product) or intangible (an intellectual product). The block can record the data 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 preceding and succeeding it
These blocks form a chain of data as an asset moves from place to place or ownership changes hands. The blocks determine the exact time and the sequence of transactions, and the blocks link securely together to prevent any block from being altered or a block being inserted between the two succeeding 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, providing the vital strength of immutability. This removes the possibility of manipulation by a malicious actor — and builds a ledger of reliable and secure transactions.
4- Research Trends
Blockchain can be applied in all of those scenarios where middlemen get involved. Following are some of the vital use-cases where Blockchain is currently being implemented:
Cryptocurrency: this is the most well-known use-case of Blockchain. By implementing Blockchain, participants are able to transact with each other without the involvement of any bank or any centralized institute. For instance, a person in the United States can send bitcoins to one in India without intervention from any bank. This leads to the creation of a lot of cryptocurrencies, Bitcoin being the most popular one.
Advertising & Real Estate: Currently, big companies possess as well as control almost all of the digital advertising traffic of the world in a centralized manner. However, Blockchain will be capable of removing that. Here, big companies are essentially middlemen that control the advertising ecosystem. By deploying Blockchain the producers and the consumers can be connected directly through a decentralized network. Similarly as the Advertising industry, in the Real Estate industry, there exist middlemen, so-called brokers, who often charge exorbitant fees for the trade between the buyer and the sellers. Deploying Blockchain, such middlemen can be removed to reduce the cost significantly. Basically, instead of depending on centralized advertising agents, a Blockchain can be implemented where the producers can provide their ads and consumers can see them directly without any involvement of middlemen.
Supply Chain: This is another interesting use-case. An international courier has to go through a lot of steps. For instance, it goes through the courier service provider, then goes through customs of the sending country, then goes through customs of the receiving country, and finally goes through the local courier service provider at the receiving country. The biggest issue in this supply chain is to track the status of the shipment. Companies are planning to implement Blockchain across these parties such that all the parties involved can put status in real-time in the Blockchain which customers can easily track all the information. Using Blockchain will eliminate the management burden on one participant and decentralize the load across all the participants.
Insurance: Insurance companies are partnering together to create a Blockchain that will contain data of people who have filed fraudulent insurance claims. This will help companies in verifying the genuineness of the applicant while issuing insurance. The best part about this system is that no single insurance company has to take the responsibility of maintaining this data. The data is decentralized across the companies which establishes a lot of trust across the companies. Just like the insurance sector, the same logic can also be applied to banking where the banks are working on creating a data of defaulters. Currently, this is done by credit rating agencies. Banks are trying to eliminate these credit rating agencies by using Blockchain where they will all share the data of defaulters in a secure manner.
Healthcare: The health records of patients can be securely stored in a blockchain network such that the patient can directly share those records with the new doctor. The most advantageous aspect of using blockchain here is that there is no need for a centralized agent where these records are stored. Therefore, the cost can be lowered significantly. Health records could consist of a lot of things like, diagnostic by doctor, medical history, lab reports.