The Blockchain Technology Rush is Coming
How Blockchain Works
Blockchain is a distributed data storage that contains the chronologically chained data blocks, meaning each block has a connection with the previous one via the hash. All blocks contain certain timestamped batches of recent valid transactions. All transactions are recorded in the ledger that allows tracking and trading anything of value in the network, thus removing the need for a central point of control.
Before the information is saved in the block, it has to be proven by this network’s nodes, which check the validity of the transaction. Furthermore, you may be absolutely sure about the accuracy of the block’s data as it is also timestamped in the Blockchain system. Once the information was validated, it can’t be changed but can only be added with the new block.
Blockchain Technology Benefits
The aforementioned basic Blockchain principles bring us to the main benefits of this technology:
- Privacy and confidentiality. To protect the information, Blockchain uses private and public keys, unique members’ IDs, invoice and reference numbers. Moreover, access might be restricted by the protocol’s conditions.
- Decentralization. Usage of the shared ledger makes the information replicate for each node that eliminates the need for the central point creation.
- Information regularity. Because of the decentralization principle, the information flow is continuous regardless of the members’ activity. User will receive refreshed information about provided valid operations promptly after authorization.
- Clarity of information. Decentralization helps to keep the data clear and stable, as there is no opportunity to influence it from a central point.
- Information accuracy. As all information needs the nodes validation and all of them have equal rights and interests in proper data, transactions can’t be managed without serious revisions.
- Publicity. All network members have access to the information. Therefore, all transactions and contracts may be checked.
- Cooperation. The Blockchain technology implies cooperation of all nodes that becomes another verification step for the sake of information clarity.
- Protocol’s flexibility (Smart Contracts). All actions that members want to provide inside the network have to comply with certain rules that are written in protocols (contracts). The list of these rules can vary with goals and may be changed accordingly.
Actual and Potential Blockchain Application Areas
We see the following main areas where the Blockchain technology might be used:
- Areas requiring regulations between non-trusted counterparties without a trusted central authority
- Areas with huge processes replication, duplication and friction between values or information
- Areas with the need for the quick data exchange
- Areas which depend on accurate and fixed data
- Areas with public access
- Areas with strong cooperation between members.
Examples of certain industries and areas where Blockchain solutions were already implemented or are about to be accepted:
- Financial Services. Banks and regulators all over the world are already working with the Blockchain searching solutions to reduce operations time, prices, and financial risks, as it removes the need for intermediaries and unnecessary cost overhead.
- Healthcare. The importance of the Blockchain technology usage for electronic medical records is of the same particular importance as for the government and financial fields.
- Government. One of the main and primary fields for the Blockchain solutions implementation is government facilities, as they have to be clear, public, and safe.
- Internet of Things. Blockchain has already started to blend with IoT solutions and now helps to regulate related systems.
- Likewise, Blockchain might be used in many other areas, such as manufacturing, retail, game, music industries as well as for cross industry projects, and others.
Interested in this or related areas? We’ll return to the Blockchain technology and latest industry trends discussion soon with our next blog articles. Stay tuned!