E very straightforward enterprise would like to be involved in blockchain that is one of the most intriguing technologies currently in the market today.
Introduction to Blockchain. A block is the ‘current’ part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database.
Each time a block gets completed, a new block is generated. There is a countless number of such blocks in the blockchain. So are the blocks randomly placed in a blockchain? No, they are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block.
I would like to draw your attention to an interesting law appeared in 1993, a Metcalfe’s Law. Now I am wondering if it could be a prehistory of blockchain.
Let’s take a look at one of the Metcalfe’s Law expressions to find common features with blockchain system: The number of possible cross-connections in a network grow as the square of the number of computers in the network increases.
Now, transactions and data that use blockchain technology, however, do not allow changes to data once it is written unless all or a majority of participating computers agree to the change. This is a significant departure from the traditional “wall,” and decreases the possibility of backdoor transactions to nearly zero—which makes blockchain invaluable for organizations in any industry trying to safeguard their data.
Benefits of blockchain:
- Disintermediation & trustless exchange
Two parties are able to make an exchange without the oversight or intermediation of a third party, strongly reducing or even eliminating counterparty risk.
- Empowered users
Users are in control of all their information and transactions.
- High quality data
Blockchain data is complete, consistent, timely, accurate, and widely available.
- Durability, reliability, and longevity
Due to the decentralized networks, blockchain does not have a central point of failure and is better able to withstand malicious attacks.
- Process integrity
Users can trust that transactions will be executed exactly as the protocol commands removing the need for a trusted third party.
- Transparency and immutability
Changes to public blockchains are publicly viewable by all parties creating transparency, and all transactions are immutable, meaning they cannot be altered or deleted.
- Ecosystem simplification
With all transactions being added to a single public ledger, it reduces the clutter and complications of multiple ledgers.
- Faster transactions
Interbank transactions can potentially take days for clearing and final settlement, especially outside of working hours. Blockchain transactions can reduce transaction times to minutes and are processed 24/7.
- Lower transaction costs
By eliminating third party intermediaries and overhead costs for exchanging assets, blockchains have the potential to greatly reduce transaction fees.
Some are looking at blockchain as a way of securing intellectual property and digital creative works such as images or music. The blockchain ledger is intended to be a secure and reliable way of proving a work’s attribution and provenance. And the programmable nature of the digital block makes it possible to enforce sophisticated usage rights. (Deloitte)
One thing is obvious – Blockchain is going to disrupt our industry!