What is Blockchain?
Blockchain is a viable platform for consensus driven transaction processing. It provides a record of transactions — distributed across multiple servers or nodes — and grants participants permissions to submit or validate transactions where there is limited or undefined trust between the parties transacting business.
What makes Blockchain secure?
Blockchain uses cryptography to link validated transactions into immutable groups or blocks. Once a transaction is agreed to by the blockchain networks consensus algorithm, it is incredibly difficult to modify or delete the transaction.
Blockchain implementations like Ethereum and HyperLedger Fabric can be used to deploy transactions that contain code, commonly referred to as Smart Contracts or Chain Code. Because it is contained in a blockchain transaction, once it is deployed the code cannot be modified. This helps ensure that the parties using the smart contract know that the code they are calling is unchanged from the originally deployed version.
When did Blockchain begin?
Blockchain burst onto the tech scene in 2008 and grew in popularity as the underlying technology for BitCoin. As interest in blockchain expanded, additional blockchain implementations such as Ethereum and HyperLedger were introduced.
Today, blockchain is no longer the playground for cryptocurrency enthusiasts. It is a viable platform for consensus driven transaction processing.
Why should you use Blockchain?
There are two primary reasons to use blockchain:
- You have a need for an immutable, append-only record of transactions
- The transactions need to be shared across a distributed network of known or unknown participants
If a use case meets both of those requirements, blockchain may be exactly what you need.
In cases where transaction modification or deletion are needed, all transactions are housed and controlled by a central authority, or high performance transaction processing is required, alternative approaches may be more flexible and economical.
Blockchain and Smart Contracts
Programs deployed to blockchain as transactions are commonly referred to as Smart Contracts. These contracts can take the place of a physical agreement between two or more parties, automating responses to certain actions.
How Smart Contracts Work
For example, a smart contract deployed to ensure payment when goods are delivered might work like this at a high-level:
Many business processes can be modeled in smart contracts to help expedite business and reduce errors.
Custom Blockchain Development
A token in the blockchain world is a digital representation of an asset. That asset can be currency or another good, physical or digital, that has value. Standards such as ERC-20 and ERC-721 allow businesses to create custom tokens that can represent anything from frequent buyer points to artwork to training certificates. There are also numerous public blockchain networks that can be leveraged to link custom tokens with fiat currency.
Many standard business processes have been modeled in smart contracts and there are numerous open source repositories containing code that can provide a head start.
For those processes that are unique to your business, TechCXO can provide both strategic leadership for your blockchain initiatives as well as the development services to help realize your vision.
Industries Using Blockchain
Many financial institutions are leveraging blockchain to share transactions with trusted and untrusted entities on various networks. In a trusted environment, a multinational firm or group of firms can host several nodes that keep transactions synchronized. In untrusted environments, public blockchains can assist with the transfer of assets and currency exchange.
Blockchain can be used to identify healthcare entities from providers to payers to patients and help them interact on a distributed network. Patients can use their blockchain identity (or digital wallet) to allow their personal health data to be accessed by a new physician or payer, for example.
Logistics and Supply Chain
Moving goods across the world is an activity most of us take for granted and know little about how it works. When goods move from carrier to carrier, blockchain can be used to keep track of the movement of goods, who is currently in possession, and who is next in the chain.
Manufacturing, Retail, Transportation, and Government are continuing to see use cases for blockchain grow.