Since the emergence of the digital age, there has been a great increase in the exchange of currency, goods, and valuables called 'Transactions'. For validating the Transactions, many depend upon various intermediaries or third-parties in the form of Banks, Dealers, Retailers, and so on. This dependency on the third parties for securing transactions results in frequent delays too and frauds and misinterpretations as well.
The need for intermediaries is critical when making a digital transaction, because of digital assets such as money, stocks & intellectual property, are essentially files, they are incredibly easy to reproduce. This creates what’s known as the double spending problem in which the same unit of value is spent more than once which until now has restricted to the peer to peer transfer of digital assets.
Also, since the hype in transactions, it has become much difficult to maintain a record for the same since each transaction has to be registered and stored separately thus, making the system more complex and prone to errors. Thus, a transparent system is needed where the control of the transactions lies with the sender and receiver instead of a third-party.
The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. A record of every transaction is stored across many different machines, and the ledger is maintained through a process of “mining”. Blockchain technology is like the internet. Block-Chain technology has become the boom for today as it provides complete transparency, quality and security for the transactions with the help of a network of nodes.
How Blockchain works?
Blockchain is a type of distributed ledger or a database that keeps records of digital transactions in a business. Rather than having a central administrator like a traditional database admin, (like those in the banks, governments & accountants), a distributed ledger has a network of replicated databases, synchronized via the internet and visible to anyone within the network. Blockchain networks can be made private with restricted membership for access similar to an intranet, or public, like the Internet, accessible to any person in the world.
In this system, each transaction, having a unique transaction id, is recorded in a block and then added to a public, distributed ledger called the 'Block-Chain'. The block is then connected to the previous and the next in the chain in an irreversible manner thus making it impossible to alter it.
The Transaction is verified by a network a nodes or computers and is validated only if all the nodes reach a common consensus, thus making it secure. Also, after the transactions has taken place, the updated copy of the ledger in the form of a Spreadsheet is sent to each and every node in the network thus removing the central dependency on a system administrator and making it transparent. Thus, each transaction is made public.
What is a BLOCK CHAIN for business?
The rising of partnerships between industries on a worldwide level:
- Overall businesses are flattering additional and extra consistent. As an outcome, they depend on each other for the built- up and in terms of products. This requires confidence flanked by them, thus creating a must for a system ensuring safety measures and
Greater than before rising in cybercrime and online frauds:
- Till now, the standard outlay of consolidated data commit a breach grew in the region of 4 Million USD and the typical protection incidents have risen up by a significant amount.
Application of a BLOCK CHAIN :
To take the edge off threat businesses are indisposed to place blockchain at the central part of the business construction.
- Blockchains technology can be incorporated into compound This means unambiguous blockchain applications may be a disruptive modernization, for the reason that to a large extent smooths the progress of businesses to make use of new methods of handing out digital transactions. Examples take account of a imbursement organization and digital currency, facilitating crowd sales, or implementing prophecy markets.
- Blockchains are anticipated to dislocate the cloud computing manufacturing even though matter-of-fact technical issues does linger as obstacles. Blockchains can be thought of as an automatically notarized They lighten the need for a trust service provider or an intermediate party and are predicted to upshot in with a reduction of capital being fixed up in disputes.
- Blockchains have impending to reduce universal risk and financial fraud cases. They make routine processes that were beforehand time-consuming and prepared by hand. In theory, it would be promising to bring the money together, conduct conveyancing and make available risk management with block
Using blockchain in business
If you aren’t using digital currencies in your business right now, you certainly will be in the days to come for your businesses to growth
One of the simplest and most effective ways to adopt blockchain method in your business is to accept payments from your customers. Accepting blockchain payments, using blockchain method, can offer your company several advantages except the huge customer base. Additionally, using blockchain can help you effectively eliminate the middleman on many transactions, especially on real property items, and help save both you as well as your clients substantially on brokerage or legal fees.
Blockchain operates significantly differently than other financial transactions do.
Also, if you are looking to raise significant capital -either to start your business or expand it, then blockchain can help facilitate this. More like accepting customer payments, accepting blockchain for fundraising provides investors yet another way to securely fund your business. It allows your fundraising to go from local to global.
Blockchain can help the companies build nearly perfect and easily enforceable contracts with the customers. These sort of smart blockchain contracts can be extremely useful and essential as well for automated and Internet-based businesses nowadays, which rely heavily on AI and other tools.
Why blockchain is future technology?
- New technologies such as blockchain has the capability to reduce cyber risks by offering identity authentication.
- Small businesses could use blockchain technology to create trusted trading platforms among themselves for their overall business growth.
- Blockchain could possibly and will help bring robustness and transparency to the post-trade environment.
- Blockchain could possibly replace central banks in future.
- Blockchain has the potential to create new industry opportunities and completely disrupt existing technologies and processes.
However, what most of the people don’t know, is the fact that the blockchain is an “infrastructure” and Bitcoin is one of many applications. IBM is extremely investing in the blockchain technology to disrupt some large industries.
What is IBM blockchain for business?
IBM and Linux, has brought together some of the brightest and greatest minds of the industry and technology to work on this blockchain technology through the Hyperledger Project. IBM recently declared the first commercial application of IBM Blockchain, a suite of cloud services to help clients create and manage blockchain networks.
IBM Blockchain enables users to do the following:
- Build a blockchain network in hours instead of taking weeks, super efficient.
- Runs highly secure blockchain networks for regulated industries.
- Can easily manage decentralised network across members.
Hyperledger's codebases are governed by a steering committee, of which IBM is a member. The committee could decide to make changes in the Fabric, but not without IBM’s consent and contribution.
According to John Wolpart- IBM’s Global Blockchain Offering Director “It’s about evolving the Internet.” Bitcoin is important for moving money around without a single authority.
IBM’s initial vision of blockchain technology is — a privately distributed ledger used by known and trusted partners on an invitation-only basis.
How it is useful
- Creates an application user interface to expedite application development.
- A managed blockchain service for the businesses to simplify the heavy lifting of operating a blockchain network altogether.
IBM has built its own blockchain with data privacy, confidentiality, and audit ability in it. It has donated this code and some related patents to the Linux Foundation Hyperledger Project and continues to contribute to it, along with others. IBM has also provided the cryptography and a hardware security module that protects the cryptokeys used by each blockchain administrator to sign transactions to make them tamper resistant and accessible by the administrator only.
- Provision resources
Members of the network can provision their own peers and resources.
- Create Channels
Private communication channels to conduct confidential transactions with selected members of the network and can be accessed by them only.
- Embed Logic on the Network
Business logic, written in code, contains embedded business logic that allows you to define assets and write transaction instructions.
IBM recently announced to make a whopping $200M investment in the new global headquarters for its Watson Internet of Things (IoT) business in Munich. IBM is developing a new capability that connects IoT data to Blockchain technology through the IBM Watson IoT Platform. In addition to that, IBM has also opened a Blockchain Innovation Centre in Singapore to accelerate blockchain adoption for finance and trade in the first collaboration one of its kind with the Singapore Economic Development Board (EDB) and the Monetary Authority of Singapore (MAS) and IBM Research.
IBM has come up with its "Blockchain as a Service technology", which is based on the open source Hyperledger Fabric. IBM Blockchain is a public cloud service that customers can use to build secure blockchain networks of their own or for their businesses.
This would allow private companies and businesses to set up a trusted network, which would allow its employees to share the information freely among them without any kind of alteration.
Difference Between Bitcoin Blockchain and blockchain for Business
The Blockchain supporting Bitcoin was specifically built for the cryptocurrency. But block chain technology can be used for a vast number of resources of one's choice.
Bitcoin blockchains are in increasing demand as they maintain anonymity. Bitcoin Blockchain reveal the transaction but does not expose the username of the party. On the other hand, businesses have some facilities that require them to know exactly who the client actually is. Clients or Participants in business block chains require privacy rather than anonymity. Thus, one client does not necessarily need to see everybody's transactions.
In case of bitcoin blockchain, the common consensus regarding any transaction is achieved through mining, but for business blockchain, it is achieved through the process of 'Selective Endorsement'. It is about being able to control exactly who verifies the transaction who gets to see the details, which is different from bitcoins where the whole network verifies the transaction.
But there are also serious efforts among big financial and technology companies to build blockchain systems for all sorts of uses, including tracking digital medical records and tracing provenance of gems in the diamond trade.
The potential problems with the way blockchains are currently being designed nowadays is including the fact that all the clients in most networks run the same code, so one vulnerability can take down the entire system.
The technology will struggle to process transactions in real time and have trouble scaling up. And because of the fact that most blockchain networks are global, the main problem is that the national governments and central banks won’t be able to regulate them easily.
Many compare the world of blockchain to the early days of the Internet. During the 1990s, in fact, there were also warnings about the stability of this fast-growing network. But in the end, financial incentives encouraged those involved to maintain the stability and security of the underlying systems.
For any technology to be completely accepted in the market, businesses must be aware before adopting it. The same goes for Blockchain. The technology is in its emerging phase.
I believe, there should be a standardization for this concept as well. And I even believe in giving this concept a proper terminology and an industry someday.
As for now, IBM with Hyperledger is contributing in a positive direction.
Let us know in the comment section what you guys think about this!