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What is Blockchain?

What is Blockchain?

by mohib / Wednesday, 29 December 2021 / Published in Education Blog
What is Blockchain

Table of Contents

  • Blockchain is the New Normal
  • What is Blockchain?
  • Blockchain for a layman
    • Meaning and Function
  • What makes Blockchain unique?
  • Origin/history of Blockchain technology
  • Blockchain worldwide Impact
  • Importance of Blockchain for businesses/Application of Blockchain technology
  • Application of Blockchain Technology
  • Different scenarios of using blockchain
  • Sectors using blockchain technology
    • Block chain technology solving financial transaction issues
  • How it Works?
  • Block chain technology facilitating supply chain functions
  • Blockchain technology in health and pharmaceutical sector
  • References

Blockchain is the New Normal

The concept of blockchain technology has evolved overtime, and destined to be the future of the business world. It has already revolutionized various businesses, especially the banking and healthcare industry of the world. But What is block chain? Why is there so much hype?

What is Blockchain?

Blockchain is a technology of storing data in such a way that it is difficult to modify, hack, or manipulate data/information, stored. Blockchain is a decentralized, immutable and a shared ledger, that helps in the process of recording transactions, track assets, and build users confidence. Blockchain is also explained to be a type of distributed ledger, or a shared database. It is designed to record digital transactions, in order to provide organizations with transparency, efficiency, and security. Assets can be tangible (a house, car, cash, or land) and intangible (intellectual property, patents, copyrights, branding), both. On a blockchain network, virtually anything of value can be recorded and traded, minimizing the risk and overall expenses/costs, for all involved parties.

Blockchain

Blockchain for a layman

Meaning and Function

In simple words, a blockchain is a computer file used for storing data, which in technical words is called a distributed ledger. The data is distributed (spread) among multiple users, computers, which makes blockchain to be a fully decentralized system. This means that no single person or entity (such as a government or corporation) has control over the blockchain; which is a substantial shift from the traditional and centralized databases that corporations or entities controlled.

In simple terms, the file is made up of data blocks, where each block is linked to other, building a chain; therefore, this technology is named as “blockchain“. Where, every block holds data and a record of when it was generated or updated. This makes the process extremely valuable, for keeping a detailed record system that cannot be manipulated or lost.

What makes Blockchain unique?

Blockchains, possess these characteristics that makes it unique and result in a system that functions substantially differently, then other forms of computer databases.

  • It is like a computer file, which has many data blocks linked together, making a chain of data, in the computer system. For example, this article (data file) has many links, similarly. Each block is linked to previous and forward blocks.
  • It is a distributed For example, this article’s file (computer file) can be stored on a single computer and if posted online, can be accessed via the internet, by many people. A blockchain, on the other hand, is duplicated across several computers in, which can be accessed via multiple computers.
  • Editing of data is not easy in blockchain data. For, editing or changing data in blockchain, a second innovation was made of cryptography.
  • Openness is the also a major feature of blockchain. To some extent, blockchains are open to the public, which means it is ‘available to anyone’ or ‘visible to anyone who has been granted permission to view it”, which makes it highly useful in banking and health care sector.
  • Other key features of block chain are, as follows:

Blockchain features

Origin/history of Blockchain technology

In 2009, a developer known as Satoshi Nakamoto, established the first blockchain, which served to be the foundation for the cryptocurrency Bitcoin, but its history is also linked to events prior to 2009.

Blockchain worldwide Impact

Blockchain technology is not confined to single economy, but is being adopted rapidly by the developed nations, where the real world scenario is presented below:

Blockchain chart

Importance of Blockchain for businesses/Application of Blockchain technology

Information is the lifeblood of business, where faster, timely, and accurate information is better. As, blockchain delivers immediate, shareable, and entirely transparent information, that is saved on a distributed ledger, that can only be viewed by authorized network users. Therefore, blockchain is excellent tool for businesses, that rely heavily on timely and huge amount of data, information sharing and recoding, for any business. Where, business can track its orders, payments, accounts, production, by using a blockchain network, from different locations/accounts. Also, blockchain technology solves problems like: removal intermediaries, transparency issues, trust issues, data security and accuracy of information and providing freedom to users, due to decentralized approach.

Application of Blockchain Technology

Similarly, to how the internet transformed and shaped the whole globe, the future is going to be transformed by using Blockchain technology and the way people will do business. Some of the key applications of blockchain technology in 2021 are:

Blockchain Technology Application

Different scenarios of using blockchain

While, blockchain is fascinating and has the potential to change the way of the business functioning and process, still it is not the best option for every situation and depend on nature of business. Here are some applications, which are opting blockchain, over a centralized/traditional database system:

Blockchain applications

Sectors using blockchain technology

Many industries have already started to adopt this technology, in order to gain a competitive advantage over the non-blockchain competitors, in the market. According to the 2021 statistical reports, following are the industries, using this technology:

Blockchain technology’s application is not confined till cryptocurrency and is incredibly beneficial for variety of applications and industries. In short, blockchain technology can be used anywhere, safe recording of transactions and data is required.

The blockchain network has already managed to disrupt the financial services industry, where this technology enables bitcoin transactions. In the financial sector, Blockchain technology allows players to engage directly, and conduct transactions through the internet without the involvement of a third party.

Sectors using blockchain technology

The blockchain is an exciting new alternative to traditional currency, centralized banking, and transaction systems that has not only transforming the way of handling/performing financial transactions, but also the way of perceiving about it. These Blockchain transactions do not share any personal information about the participants, and they produce a transaction record by encrypting (concealing) the identification of information. The most important aspect about Blockchain is that it minimizes the chances of a data breach.

Block chain technology solving financial transaction issues

  • Transactions recorded in the Blockchain system are accurate and safe, since they are immutable and difficult to change, which is suitable for payments, as it cannot be reversed, once recorded. In real world, where parties may not trust one another, the threat of fraud and mistrust is removed, by incorporating blockchain design. Payment receiver/processors can rely on the technology, as it is said to be transparent and tamper-proof technological advancement.
  • Secondly, the implementation of Blockchain technology helped in eliminating the need for payment intermediaries, such as banks and other financial firms/mediums.
  • Anyone having an access to the internet, may open a cryptocurrency wallet, conduct borderless transactions, and manage their funds, without the need for a third party. This will help to reduce transaction costs and will accelerate the process/ transactions.

How it Works?

Blockchain works best for Bitcoin currency, which can be explained by the process below:

If one follows at the chart below, it can be realized that no intermediary was involved, in the money transfer process. Though, if a person wants to transfer money, two intermediaries (banks/western unions etc.) are involved, to process the amount and change their user account balances. It will take a significant amount of time, effort, and co-ordination. But by using blockchain, the precure has become much simplified, where both parties will be able to manage a single ledger of transaction entries. The technology allows access to both parties, where, coordination and validation are made easier, and a single version of the records can be maintained, as shown below:

How Blockchain works

Block chain technology facilitating supply chain functions

As per the statistics, 13% of Government supply chain industries are using this technology. Where, manufacturers can utilize Blockchain technology to track the origins of items, delivery, and production activities throughout the supply chain management process. Similarly, this technology will provide consumers the capacity, to verify the quality of goods and products they buy, which can prevent or minimize counterfeit goods and misleading information.

Examples: Ambrosus, is a real-life example, which focuses on the safety and origins of food products, while Vechain, a Blockchain-based platform, that allows both consumers and retailers, to confirm the authenticity and quality of purchased products. Both the platforms help to increase transparency and authenticity of transactions in the supply chain industry.

Blockchain technology in health and pharmaceutical sector

  • The pharmaceutical and overall health industry are another big industry, where Blockchain’s technology has been adopted, in order to maintain professional integrity, timely information and transparency. Transparency, correct data, security, and trust are all musts, in case of dealing with medical prescriptions, drug records, patient treatment data, etc.
  • Also, it will help the users to access data from different sources.
  • Also, this technology is being used in monitoring the transportation of expensive medical equipment and medicines, that might be essential and keeps the patient’s records safe.
  • DHL, a worldwide logistics giant (supply chain company), is collaborating with Accenture (a global management and professional services firm), to integrate Blockchain technology into the pharmaceutical business, in order to increase digitalized process, transparency and accuracy of transactions.

References

https://www.euromoney.com/learning/blockchain-explained/what-is-blockchain

https://www.ibm.com/topics/what-is-blockchain

https://www.marcopolonetwork.com/articles/distributed-ledger-technology/

https://bernardmarr.com/why-use-blockchain-technology/

https://www.icaew.com/technical/technology/blockchain-and-cryptocurrency/blockchain-articles/what-is-blockchain/history

https://bernardmarr.com/what-is-blockchain/

https://mlsdev.com/blog/the-future-of-the-blockchain-technology-use-cases-geographical-expansion-potential-risks-and-challenges

https://www.gkmit.co/blog/blockchain/blockchain-features-technology-future-and-industry

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