What Is Blockchain Technology? Definition, And How It Will Change Business?
Efficiency, Innovation, And Cybersecurity: These are the three main priorities businesses focus on today, and for all of them, using blockchain can “make a difference”. Below is a brief explanation of what Blockchain Technology is, how it works, and what its main areas of use are.
What Is Blockchain?
The definition of blockchain is now well known: it is a distributed database (a type of transaction log in which data not stored on a single computer, but on several computers that are connected via the Internet, using a particular application which enables this to interface with the “chain”), which consists of data blocks in which transactions stored; To be consolidated within a block, each data element and then each block subjected to a validation process before being added to the “chain”.
How Does The Blockchain Work, And What Are The Validation Processes?
Before continuing, we must familiarize ourselves with two terms: blockchain node and miner. The former are the computers on the network that have downloaded the blockchain to their storage. Anyone can become a node through the appropriate program (Bitcoin Core, for example, for Blockchain Bitcoin). The miners are those who, thanks to powerful computers and a rather complex validation protocol (explained later), carry out this transaction and whose work rewarded with a price (the term now used for this operation is “undermine “, Italianize the English Term for me to extracted).
The validation protocol (which defines the validation algorithms and who can be a miner) is, therefore, the most crucial element of the blockchain, since the speed of the blockchain and its security depend mainly on it (the algorithms that control this process) They not only check if each new entry meets specific criteria but also prevent the data already in the chain from tampered with.
Therefore, the main developments can see in this area, and the various blockchains differ from a technological point of view. However, it is essential to emphasize that one protocol is not necessarily better than another: the use of one or the other also depends on the type of application for which the blockchain used.
Where And How Blockchain Technology Used In Companies?
The implementation of smart contracts within the blockchain has changed the evolutionary landscape of this technology from an application point of view and opened its use for different sectors by bringing the blockchain closer to companies. In the below, you will find some examples in a wide variety of industries where blockchain applications can create to understand better the full range of possibilities offered.
Copyright, Patent Registration, Drug Safety: For a detailed explanation of blockchain technology, see the article Blockchain: How the Economy is Changing with the Chain.
Finance: The application of blockchain beyond the spread of cryptocurrencies. For more info on how to use blockchain technology in this application area, see the article Finance: Making Selling Securities Easier and More.
Supply chain: thanks to the implementation of smart contracts on a blockchain, each step of the by-products within a supply chain can be made visible in real-time. In this context, there are numerous projects, as indicated in the article Supply chain: Tracking products securely and transparently.
Energy: this is one of the sectors, Extra Finance, where blockchain technology can find a wide range of uses. See the article Energy Sharing: selling and buying electricity without intermediaries.
Why Blockchain Technology Is Essential To Businesses
How important is the blockchain for companies? These are the characteristics that make this technology particularly interesting for companies.
Digital currency, contracts, documents: everything goes digital on the blockchain, and transactions embedded in the chain can affect any asset, right or container of value and information.
Safe: thanks to the encryption process that characterizes it, it not possible to modify or modify the blocks already inserted in the chain. Therefore, the data stored in it is safe and cannot tamper with.
Reliable: The chronological organization (blocks added to the chain in a particular and unchangeable chronological order) avoids disputes about the execution of the various contract phases, for example.
Its technical properties prevent data loss or data damage: even if one of the nodes in which the chain stored damaged, the others continue to function and keep the chain stable without data loss.
Fast: A central body doesn’t need to check its appropriateness and validity. It done in the consensus of the network. Since it is an entirely digital solution, execution times, controls, paper, back-office and operational risks eliminated.