Originally utilised for the Bitcoin explosion, Blockchain is an established process and one that can be applied for other application use. Traditionally, transactional information is stored within a data repository, that is both centralised and protected. Contrastingly, Blockchain reverses this concept and operates on a peer-to-peer level of encryption across a shared network database, allowing many data instances, which are typically distributed in a ledger account. The phenomenon here is, the more widespread and distributed the data, the better the performance and the security and also, the less chance data can be individually targeted.
How does it work?
With the data for transactional operations ever-growing, each data record/batch exists in the construct of a block. Each of these blocks are encrypted via their unique algorithmic values. At first, the blocks adopt a unique cryptographic hash. It is this individual hash which is then allows prior blocks to interlink and form a chain of information. When chains are formed, the batches of data inside are then encoded into a Merkel tree with all the metadata containing transactional information. This fast moving process, although high in computational demands, increases its security due to how data is stored and transferred.
The global blockchain technology market is estimated to accumulate $20 billion in revenue by 2024.
As new data comes in, it is entered into a fresh block, which is then chained onto the previous block, making the data chained together in chronological order.
Blockchain is used in a decentralized way so that no single person or group has control—rather, all users collectively retain control.
Decentralized blockchains are immutable, which means that the data entered is irreversible. Transactions are permanently recorded and viewable to anyone.
Anything that can be deemed a supply chain, can be vastly improved by blockchain in its efficiency – it doesn’t matter if its people, numbers, data, or money…
– Ginni Rometty, CEO IBM
Secure Transactions For All
One of the challenges is to maintain anonymity within transactional information to protect sensitive data. This default state is inherited by most cryptocurrencies, and is needed to maintain security. However, when using Blockchain outside of currency exchanges. E.g. Such as for tracking assets, the challenge is to secure the transaction whilst also making sure access to certain information is possible. This is because the data batch, within the ledger itself, cannot be changed once created.
In the first instance, Blockchain can also be used in the public domain due to the extensive functionality built within its core model. For example, blockchain protocols can be used for signing digital papers or documents. Or perhaps even in a private instance to a closed group, where a series of lenders are sharing a fund, whereby permissions and policies dictate who and what they can access.
Blockchain also allows a group of associated organisations that are working cohesively, to create a consortium of users that in a pseudo private instance, can protect one another virtually, hereby increasing their security level.