Blockchain technology is a peer-to-peer transaction management system without an intermediary. The transactions are verified by a network of nodes and recorded in a public distributed ledger called Blockchain. The shared, distributed ledger records an immutable history of all asset transactions between participants in the network and catalogs the current state of those assets. The business rules that govern Blockchain transactions are agreed upon by all contracted members and encapsulated in chain-code, also known as smart contracts.
Unlike financial services institutions that facilitate transactions with traditional currencies, the Blockchain allows the free transfer of cryptocurreny through a decentralized environment. All the data is then held in an interlinked network of computers, owned and run by none other than the users themselves.
Christian Catalini, MIT Sloan Assistant Professor: Blockchain Quote:
“At a high level, blockchain technology allows a network of computers to agree at regular intervals on the true state of a distributed ledger,” says an expert in blockchain technologies and cryptocurrency. “Such ledgers can contain different types of shared data, such as transaction records, attributes of transactions, credentials, or other pieces of information. The ledger is often secured through a clever mix of cryptography and game theory and does not require trusted nodes like traditional networks. This is what allows bitcoin to transfer value across the globe without resorting to traditional intermediaries such as banks.”
There are many Blockchains currently being used in addition to the powering Bitcoin. In fact, the convergence of Blockchain and the Internet of Things (IoT) is presenting organizations significant new innovative solutions to improve corporate productivity, service quality and profitability.
The Blockchain technology was first revealed by Satoshi Nakamoto in his paper “Bitcoin: A Peer-to-Peer Electronic Cash System” which provided the mathematical foundation and approach for bitcoin crytocurrency. Blockchain is not only the foundational technology for crytocurrency but has found wide acceptance in the more traditional financial services industry and smart contracts.
Blockchain: Business Uses
Blockchain technology is viewed as a more promising than the cryptocurrency it was designed to support. The benefits of Blockchain has the potential to sustain its value for generations to come to support an array of different industries as follows:
- Citizen Voting
- Financial & Investment
- Internet of Things – IoT – (See below)
- Peer-to-Peer Global Transactions
- Quality Assurance
- Smart Contracts
- Supply Chain Management.
Blockchain & IoT
Blockchain – IoT solutions epitomizes the prime technological disruption since integration of computing and transaction processing systems. Due to continual high velocity progress in device innovation and software, it is now possible to offer transaction processing and intelligence to devices everywhere. However, there are critical adaptability challenges connected with distributed systems, as well as security, coordination, intellectual property management, identity, and privacy.
Integrated Blockchain and IoT solutions can be built to maintain cryptographically secured data records protected against alteration and modification. It can set up trust, accountability, and transparency while streamlining business processing.
Internet of Things (IoT) enables devices to send data to private Blockchain ledgers for inclusion in shared transactions with tamper-resistant records. The distributed replication Blockchain enables organizations to access and supply IoT data without need for central control and management. All business stakeholders can verify each individual transaction, preventing disputes and ensuring each Blockchain partner is held accountable for their individual roles in the overall transaction.
Dan Bieler – Analyst at Forrester: Blockchain – IoT Quote:
“it’s only normal that the distributed ledger technology, which blockchain is, will play a role in how devices will communicate directly between each other and keeping a ledger and thus trail of not just devices but also how they interact and, potentially, in which state they are and how they are ‘handled’ in the case of tagged goods.”
Organizations can use Blockchain – IoT solutions to manage data from edge devices—RFID-based assets, barcode, QR code scan events, and device data. These solutions can improve supply chains by tracking items as they navigate the import store network, while authorizing delivery and credit extension. Blockchain innovation empowers secure traceability of confirmations and other notable data in supply chains.