Blockchain for First timers
Embrace the technology which can disrupt any industry that relies on a central authority to confirm authenticity
Now a days, there is a real buzz around the word ‘blockchain’. This article tries to throw some light on this. Lets get started!
What is blockchain?
In simple sense, blockchain is a distributed ledger.
What is a Ledger?
A ledger is a record of all the transactions and a transaction is the transfer of cash, goods or service between two or more parties.
Necessity of Distributed Ledger (Blockchain) Technology
Contemporary transaction systems are suffering from one major problem that is dependency on central authority. Whether they are Centralized computation models or Client-server models, they have the following issues.
- Single point of failure: When central server fails, whole system fails,
- Single point of security: If the central server’s security compromised, whole network is in danger.
- Trust issue: All the clients in the network have to trust the central server.
Distributed Ledger (Blockchain) can give explicit control to end-users, without requiring to trust any third-party servers or infra-structures. It allows us to shift towards completely decentralized computing.
How Distributed Ledger (Blockchain) works?
Distributed ledgers are called blockchains because they are implemented as a series of connected blocks.
Blockchain is a append only data structure which means new transactions and data can be added on to a blockchain, but past data cannot be erased. This results in a verifiable and permanent record of data and transactions between two or more parties.
A transaction to be added to the blockchain must be verified and accepted (based on a particular consensus scheme) by all the nodes of the network. In this way whole network will be aware of all the transactions going on by ensuring transparency.
Any update in the ledger will be verified by all the concerned parties and all the parties will be updated with the latest copy of the ledger.
Each block in the chain holds multiple transactions, once the block limit reaches, new block will be created and linked to the current block , which allows the tracking of transaction history from current block to the way first block.
Blocks are linked in such a way that, Hash of first block will be present in the 2nd block, hash of 2nd block will be present in the 3rd block and so on. Which makes it almost impossible to mutate the block content.
Applications of Blockchain
Blockchain can disrupt any industry that relies on a central authority to confirm authenticity. It has many potential applications, through its abilities to disintermediate, reconcile and scale.
- Supply Chain Management:
Supply-chain management and trade financing can be very complex, involving multiple entities from different jurisdictions exchanging goods and relevant documents. While dealing with cross border transactions and relationships, the role of central authority is more crucial.
Blockchain technology can allow more efficient and less burdensome for trade finance and supply chain management for buyers, sellers, transporters and financiers.
- Insurance Claims Management:
Currently, Insurance claim process is a slow and complicated, involving different parties who exchange lots of paper based information in handling a claim. This is mostly handled by the Insurance agency in a centralized way.
Blockchain could enable the insurer and various third parties involved in the
process to easily and instantly access and update relevant information regarding a claim (e.g., claim forms, evidence, police reports, third-party expertise reports).
- Healthcare:
With the advent of AI, the innovation in digital healthcare is gaining momentum and its set to accelerate further with Blockchain technology. Blockchain technology can be used to remodel the collaborative exchange of vital research and useful healthcare data, thereby enabling key stakeholders such as clinical researchers, doctors, pharmacists, and other healthcare providers to gain secure, faster, simplified and reliable access to electronic medical information.
Literally there is no limit to the applications of Blockchain, extensive research is going around wide range of domains like Accounting, Automobile sales, Banking, Cloud storage, Cyber security, Education, Energy, Finance, Internet of Things, Money transfers, Music Industry, Real estate, Social media.
Blockchain implementations on production today!
Below is the small sampling of blockchain-based solutions successfully being used in production.
Final Thoughts
Though blockchain has the potential to be the next big thing, its still in premature stage, this field needs contributions from strong minds.
We have to look at it from two dimensions,
- How to apply this technology for finding solutions to real world problems ?
- How to contribute to this technology to make it more robust ?
I hope this article will inspire the readers to find the answers to above questions.
