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:
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:
The major enterprise platforms available today are:
Where enterprise blockchain can be implemented?
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.