What is Blockchain?
A blockchain is a decentralised public electronic ledger that is openly shared among users, unlike traditional banks and systems which are centralised and relies on a single entity to monitor all transactions to ensure they are valid.
Every transaction is recorded and each one is time-stamped and linked to the previous block. Each digital record or transaction is called a block. Each block is openly checked by a set of users that participate in the electronic ledger. Each block is linked to a specific participant. A blockchain can only be updated once a consensus between participants deems the record/transaction as valid. When data is entered it can never be erased. Simply blockchain is written once and amended many electronic ledgers this ensures that everyone has an up-to-date database of the ledger.
What Does Blockchain Do?
The blockchain is a peer-to-peer network combined with distributed time stamping server and an electronic ledger which doesn’t require an administrator as blockchain users themselves are the administrator which requires many users to verify a record or transaction. Blockchain networks can be used for ‘smart contracts’ that automatically execute once certain conditions are met. For example, in a real estate transaction to occur certain things need to be ticked off, once all those things are ticked off the transaction can occur.
How Secure is Blockchain?
In order to move anything within a blockchain, it first must be agreed that the record/transaction is valid by a number of users rather than a single entity. In order to hack the system, you must hack every single system on the network, unlike a bank which only requires a hacker to hack one system.
Current Application of Blockchain
Shipping
In shipping, cargo shipments traditionally are paper-based and require multiple sign-offs by inspectors and receivers before goods can be delivered. Even electronically it still requires multiple parties to sign off which creates a lengthy administrative process. They have implemented blockchain technology to digitize the supply chain. Each participant in the supply chain can monitor the progress of the cargo, understand where the container is in transit, the status of customs documents or view bills and other data in real time. Due to the blockchain, no one individual can amend, modify or delete any blocks without the consensus from others on the network.
Financial Transaction
Mastercard is launching its own blockchain network to enable partner banks and merchants to make cross-border payments faster and more securely. At the moment it takes a couple of days for transactions to be cleared which requires multiple layers of communication between participants to verify the transaction, as each organisation in the process maintains its own data and must communicate with others through electronic messaging about where the transaction is in the process. Blockchain creates a public database and allows everyone in the network to monitor the progress of the transaction where it is and with the inclusion of smart contracts, once certain criteria are met then the transaction can go through. This will eliminate administration and time.
Healthcare
Blockchain can also be used as a collaboration network, allowing varying parties to exchange and add to the information, such as a patient’s electronic healthcare record in real time. The blockchain acts as a verification tool ensuring only authorised users such as a physician, insurance providers or patients can make changes to the ledger. Blockchain will enable real-time movement of clinical and behavioural data between existing physician and patient data silos, along with machine learning on the growing patient database can help identify predictors of diseases and poor health.
The Future of Blockchain
Blockchain totally inverts our logic of how information is stored, who has access to that information and what you can do with that information. Many organisations are unsure about blockchain technology due to the fact that it totally goes against how we organise our information and our records keeping infrastructure. However hopefully blockchain technology can be improved and as organisations slowly adopt blockchain technology to streamline administrative processes and show results, eventually individual mindsets may change.
Blockchains Are:
Cryptographically secure
Write once and append only
Distributed and completely or partially replicated
Decentralised