This article explores the new technology known as Blockchain, what Blockchain is, how Blockchain works, its benefits and importance and if it is a new technological tool for building digital trust.
What is Blockchain?
Blockchain is an emerging technology which has taken the tech world by storm. Originally invented for Bitcoin, it is the technology which has enabled cryptocurrencies to exist and since has been applied to many other assets and data forms.
Blockchain is defined by IMB
as: Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.
In simple terms a Blockchain is a decentralised ledger and database which stores encrypted blocks of data, chains them together to form a single source of transparent data in a chronological order to its participants.
How Blockchain Works
A ‘transaction’ of data/assets is initiated.
The data/assets of the ‘transaction’ is packaged into a block.
Nodes then approve the ‘transaction’.
The block is then added to the chain (an irreversible chain).
The data/assets are then distributed to the participants of the data, creating a permanent record of the data/assets.
The data/assets are decentralised allowing real time transparency and access to the participants.
The update is then distributed.
The transaction is complete.
Real Example – Shared Online Document
A shared document is required.
Create a document within Google Docs.
Share the document with a specific group of participants.
Participants are granted access to the shared document.
The document is distributed to those participants rather than transferred or copied.
Creation of a ‘decentralised distribution chain’ – Everyone has access to the same document all at once.
All modifications made by all participants are recorded within real time, making the changes transparent.
The Importance of Blockchain
Data and information have become the modern-world form of currency. Data and information are what the world, businesses and industries now run on. The demand for this information is now needed more accurately and as fast as possible.
Blockchain is the ideal solution for providing data due to it being immediate, transparent, fully tracked on a permanent ledger, shared but only accessible to those with granted access.
As per the IMB definition, A blockchain network can be used for anything with a value, it can track payments, documents, accounts, orders and more, and due to the members who have access to the blockchain being able to see one transparent permanent view of the data, all transactions start to finish it provides much more confidence on the data sharing process and well as creating a more opportunities and effectively generating more efficiencies.
Blockchain and Digital Trust
In our previous blog Lets talk about Trust – Digital Trust
, we concluded that trust at its core is about people themselves, and as with everything, some organisations, individuals and sources do it better than others. However, does Blockchain provide a digital security solution which provides Digital Trust?
By Blockchain allowing data to be held in a database which is spread across several network nodes, if any of the participants of the blockchain edits or tampers with the data all the nodes and participants can see exactly what has occurred, the actions are recorded permanently.
Blockchain eradicates the need for transfers, copies and revisions and provides trust of the data and the data storage, data updates, any changes or alterations are visible, irreversible, and permanently stored on the digital ledger within the blockchain.
The system establishes a chronological, permanent, and transparent order of actions and events, creating a database in which no single participant or node can make any alterations without the other participants being aware, therefore creating a form of digital trust to the participants.
Since the success of Blockchain technologies within cryptocurrencies, other major organisations such as IMB, Microsoft, Intel and Goldman Sachs are now utilising blockchain technologies. Blockchain technology has proved that it can provide improvement to cybersecurity, improvement to processes and provide streamlined strategy/organisation.
Blockchain is an exciting and meticulous technology which has caught the attention of tech giants and is providing a service which other technologies haven’t before. Is Blockchain the solution to the debate of Digital Trust, this is an idea which we are excited and interested to explore and follow.