Originally devised as a means for cryptocurrency transactions, such as bitcoin, blockchain technology allows information to be distributed digitally without being copied.
Through the years, blockchain has garnered tons of support and esteem, much in part because it:
- Is decentralized (not owned by a sole entity)
- Uses cryptographically stored data
- Is absolute, so no one can tamper with the data that is inside the blockchain
- Is transparent so one can track the data if they want to
The Visibility of Blockchain Technology
Picture a spreadsheet that duplicated thousands of times across a network of computers. Then imagine a network that’s enlisted specifically to regularly update this spreadsheet. It’s similar to a Google Spreadsheet, in a way. Information held on a blockchain exists as a shared — and continually reconciled — database.
A blockchain network has no central authority and no single-entity owner. Since it is essentially a shared and immutable ledger, the information in a given blockchain is open for anyone and everyone to see. Thus, anything that is built on the blockchain is completely transparent and everyone involved is accountable for their actions.
Blockchain provides a simple, automated, and completely secure mean of passing information from point A to point B.
The Blockchain Path
One party to a transaction initiates the process by creating a block of data. This block is verified by thousands of computers distributed around the net. The verified block is added to a chain, which is stored across the net, creating both a unique record and history.
Falsifying a single record would mean falsifying the entire chain in millions of instances, which is virtually impossible.
As an example, consider an airline. We purchase airline tickets on an app or the web. The credit card company takes a cut for processing the transaction. With blockchain, however, not only can the airline itself save on credit card processing fees, it can move the entire ticketing process to the blockchain.
The parties involved in the transaction, in this case, would be the airline company and us, the passenger(s). The ticket is the block in this equation, which will be added to a ticket blockchain. Just as a monetary transaction on blockchain is a unique, independently verifiable and unfalsifiable record, so will be the ticket.
Incidentally, the final ticket blockchain is also a record of all transactions for, say, a certain flight path, thus comprising every ticket ever sold, every journey ever taken.
The Blockchain Technology Savings
The key in this example is that the transaction is completely free. Not only can the blockchain transfer and store money, but it can also replace all processes and business models which rely on charging a small fee for a transaction (e.g., the aforementioned processing fees for the airline ticket). The same holds true for any other transaction between two parties.
One of the beauties of blockchain is that it carries no transaction cost. An infrastructure cost yes, but no transaction cost.
Maintaining the Blockchain Network
As previously mentioned, blockchain technology does not have an “owner”. Instead, the blockchain is maintained by peer-to-peer networking. The network is a collection of nodes which are interconnected to one another. Nodes are individual computers that take in data blocks, perform a function on the blocks, and produce an output.
The blockchain’s peer-to-peer network partitions its entire workload between participants, all equally privileged, and all working via individual nodes.
The peer-to-peer network structure in blockchain technologies such as cryptocurrencies (like Bitcoin) is structured according to the consensus mechanism that is it utilizing. The individual nodes are not given any special privileges; however, their functions and degree of participation may differ.
The idea 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.
Blockchain Technology and Applications
Blockchain gives internet users the ability to create value. It also authenticates digital information. Through blockchain, businesses have increased opportunities when it comes to applications such as:
- Crowdfunding: Tech like blockchain makes monitoring and securing crowd-sourced venture capital funds more secure and visible across all management levels
- Smart contracts: Blockchain makes remote systems management automation possible
- Supply chain auditing: Increased transparency comes with blockchain-based date and location timestamping
- File storage: Distributing data throughout the blockchain technology network better protects files from getting hacked or lost
- Identity management: Blockchain features enhanced methods for proving authentication, along with the possibility to digitize personal documents
- Internet of Things (IoT): Blockchain increases system efficiency and improves cost monitoring across software, sensors, and the network that facilitates an exchange of data between objects and mechanisms
Want to Know More?
At its core, blockchain is a mechanism to bring all involved parties to the highest degree of accountability. In a perfect state, that would mean no more missed transactions, human or machine errors, or an exchange that was not done with the consent of the parties involved.
Want to learn more about blockchain technology and what it could mean for you? The expert staff at Information Transport Solutions, Inc., A Uniti company, is comprised of a group of highly trained technicians and engineers, customer support representatives and IT professionals. Reach out to us today to learn more