Ahead of time is a key aspect to sustain and grow an existing business. Most of the time persistence to change or adapt as per the changing market leads to potential gaps that give opportunities for the startups to come up with solutions. Be it a startup or an existing business you always have to foresee any potential problem in the business and try to solve it before it starts becoming a real problem. Blockchain is one such promising technology that solves many existing business problems. Transparency is the key to a successful business but data being centralized or being authoritative it becomes impossible to become 100% transparent. Let's explore some key concepts and explore the benefits of Blockchain.
What is Blockchain?
Blockchain is a decentralized distributed ledger that allows peer-to-peer (p2p) transactions secured by cryptographic algorithms and consensus mechanisms. The peer-to-peer network is powered using consensus methods that validate the transactions. You can imagine it as blocks that are chained together where each block contains transactions.
What does it mean to a layman?
Imagine a spreadsheet shared by you with your peers to make modifications on platforms like Google Docs, Dropbox, or any other cloud provider. You can track down the changes done by individuals looking into the history of. If the permissions are not available nobody can delete it and all the peers have the same data in real-time. This kind of transparency to a business is the key concept of Blockchain. It's important to note that Dropbox and Google docs are not blockchain-based, I have used the reference to understand the transparency and change tracking system. Blockchain maintains similar transparency with better control over data.
The data is once written to the block and is immutable which makes it very hard for malicious actors to change or modify. If someone sends a transaction to another peer, then the transaction is broadcasted to every other peer so that it can be validated and stored. This essentially means no one can change the data and is available to all the peers simultaneously.
The key elements of Blockchain:
Blocks: Blockchain consists of numerous blocks chained together where each block is unique and consists of three things: the data, nonce, and hash. When a block of a chain is created, nonce a 32-bit random number is generated along with the hash a 256-bit encrypted number. The data in the block is considered signed and forever tied to the nonce and hash unless it is mined.
Minors: Minors or validators are network participants dedicated to validating transactions and avoiding double-spending.
Node: Every participant has its copy of data and is connected to the chain and referred to as a node and no one owns the chain. So the complete chain is open and distributed across the network to make it decentralized.
Immutability Immutability, in the context of the blockchain, means that once something has been entered into the blockchain, it cannot be tampered with. Each block of the chain has a unique set of cryptographic hash and is created when the block is generated. If someone tries to temper the data, a new hash will be generated and hence will be rejected which makes the system highly secure.
Transparency Another crucial aspect that makes blockchain so important is transparency. Whenever a new transaction is recorded the transaction is broadcasted to every other peer so that it can be validated and stored. Every peer has the same data available before it is saved making the system completely transparent.
Decentralised Blockchain is completely decentralized technology which mean now one owns a complete chain. In a centralized network the chances of data manipulation and hiding the information is possible since the data is owned & governed by a central agency. Decentralization reduces it by sharing the blocks of data between more than one unit.
Cryptocurrency & Bitcoin
The word crypto is often used in Blockchain because of the crypto algorithm used to encrypt the privacy of the data. Cryptocurrency is a digital token exchanged on a blockchain using cryptographic algorithms to secure the p2p transaction. If a monitory value is there in exchange it is called cryptocurrency and if it is only a physical or digital asset it is called a crypto asset. Bitcoin is a cryptocurrency used on the blockchain. The idea of cryptocurrency is to have a currency system, where everyone is treated as an equal and there is no governing body, which can determine the value of the currency based on a whim. Bitcoin and Ethereum have successfully implemented it.
Smart contracts are automated contracts. They are self-executing with specific instructions written on its code which gets executed when certain conditions are made. A simple example could be of A seller and buyer where a buyer agrees to pay a sum of amount on the completion of the supply of the goods. This condition could be programmed in a smart contract and as soon as the conditions are met the contract triggers the events associated. Ethereum and Hyperledger Fabric are the two prominent platforms to run smart contracts.
What is Enterprise Blockchain then?
There are two kinds of Blockchain implementations available in the market: Public and Private. Both have the same foundations but the latter works in a closed ecosystem. The public blockchain allows anyone to join on the other hand private needs the introduction of the node to the chain, once joined they can act as part of the chain and within the boundaries, it is moreover like a public blockchain. Enterprise blockchain is basically private chains which are designed for enterprises considering the factors that the public blockchain is not all acceptable to businesses. There are challenges with the public blockchain raised as a concern for enterprise implementation. Imagine a supply chain system where the exchange is between two parties in a closed environment and only they can have the access to or maybe the manufacturer, distributors & dealers are dealing in a closed state which is not open to the customers. This has led to the need of enterprise blockchain. Many organizations are providing blockchain as service (BaaS) as a part of the enterprise blockchain solution. The prominent ones are:
- Azure Blockchain Workbench
- Amazon Managed Blockchain
- SAP Cloud Platform Blockchain
- Oracle Blockchain Applications Cloud
- IBM Cloud Blockchain
The major enterprise platforms available today are:
Where enterprise blockchain can be implemented?
The pandemic (COVID-19) has exposed the gaps we were talking about the gaps in the healthcare sector. We have witnessed the failure of our health infrastructure but on top of that one of the reasons it becomes too worse is the flow of information. The information available to China wasn't available to the other part of the world and even today the clinical procedures used in a different part of the world remain a mystery for the other nations. If the information flow was totally transparent this may not have turned into a pandemic. Apart from the clinical procedures and other medical information there have been long-standing issues like the authenticity of laboratory tests, accessibility of the data across hospitals in case of the patient is treated by another hospital, patients clinical history records in case the physical files are lost, hospital treatment & expenses, health insurance claims that all have practical problems which blockchain can solve up to some extent. The transparency in the treatment procedures and helps the system to improve the quality of the system, decentralizing the clinical reports to the blockchain can give access to any hospital, data security of the patient all are good use cases of blockchain.
- Supply Chain:
Supply Chain lacks transparency, accurate asset tracking, and enhanced licensing. With blockchain, these three things can be drastically improved, impacting almost every sector that relies on the supply chain. Right now, products can be hard to track due to the unavailability of real-time tracing.
The way the insurance sectors work in conjunction with various other sectors could be improved in many ways with blockchain. The hospital's bills, motor insurances all have a pathetic approach of collecting and sending information through their own centralized system. With decentralization, it could be automated and could work in real-time how bank payments work.
- Real Estate
The real estate sector is another excellent example to showcase the blockchain capacity to solve problems. The validity of property legal ownership rights, the age of the property, brokerage, and the whole buying & renting process can be made transparent. There could be fraud and wrong information provided to the buyer while buying, with blockchain the validity of data will improve the transparency and trust of the whole system.
There are many use cases across industries like IP protection, international payments, Banking & Finance to name a few more but the use of blockchain is unlimited as the primary goal of blockchain is transparency and decentralization which is good for any business....