What is blockchain?

What is blockchain and how does it work? 

What is a blockchain? 

A Blockchain is a decentralized, digital ledger that is shared by so many following such rules that it’s virtually immutable. It enables secure and efficient recording of transactions and tracking of assets within a business network.

The security of Blockchain is ensured by its unique structure, which creates a chain of blocks. Whenever a user performs an action, it generates a block of information that is linked to the previous one and carries relevant data to the next. Each chain is designed specifically for its intended purpose, with Bitcoin being one the most popular examples, although there’s many more, both public and private, with specific applications that go well beyond crypto currency -which derive from just one functionality of blockchains.

Are blockchains secure? 

When programmed professionally, blockchains are secure thanks to three elements which we can see represented in each block: 

1. Information: It carries details of the sender, receiver, date, amount, etc.
2. Hash: This is the unique identification number of the block. Each block has its own, and any modification results in a change in the hash. 
3. Hash of the previous block: This allows the block to connect to its predecessor and, in turn, to the next one, creating a puzzle-like process with unique pieces (blocks) that ultimately complete a chain and keep it bonded together to generate certainty about ledgered data.

Blockchain: Ideal for Businesses Large and Small - Time and Resource Optimization 

This innovative technology is highly advantageous for businesses of all sizes as it eliminates intermediaries and reduces transaction times by enabling programming of actions or events which are then executed by the network. It has various practical applications, such as contract signing, which becomes securely registered in the same way as voting or medical records. In banking, initial features might include records management, but blockchain features are allowing banks to ramp up from fiat to convertible token representations and move money 24/7 between jurisdictions to then ramp down to fiat again.  According to Accenture, blockchain technology can decrease infrastructure costs for the top 10 investment banks by 30%, resulting in annual savings between $8 and $12 billion. Additionally, blockchain allows for the development of smart contracts, which are programs stored on the blockchain that execute automatically when specific conditions are met. Smart contracts are often used to automate protocols so that all participants can instantly determine the outcome, resulting in more efficient response times and reduced external intervention. 

In summary, blockchain is a secure and versatile technology that offers significant business advantages, such as cost reduction and process automation through smart contracts. Its adoption is becoming increasingly straightforward with the availability of online tools and services, making it a compelling choice for businesses today.