Assistant Lecturer & Software Architect.

What is Blockchain ?

In this article, we will show an introduction to the Blockchain technology, and summarize the Blockchain for business requirements.

What is Blockchain ?

Blockchain is a shared immutable ledger for recording the history of transactions.

Blockchain is an immutable transaction ledger, maintained within a distributed network of peer nodes. These nodes each maintain a copy of the ledger by applying transactions that have been validated by a consensus protocol, grouped into blocks that include a hash that bind each block to the preceding block.

Permissioned vs Permissionless Blockchains:

In a permissionless blockchain, virtually anyone can participate, and every participant is anonymous. In such a context, there can be no trust other than that the state of the blockchain, prior to a certain depth, is immutable. The first and most widely recognized application of permissionless blockchain is the Bitcoin cryptocurrency.

Permissioned blockchains, on the other hand, operate a blockchain amongst a set of known, identified and often vetted participants operating under a governance model that yields a certain degree of trust. A permissioned blockchain provides a way to secure the interactions among a group of entities that have a common goal but which may not fully trust each other.

Blockchains for business are generally permissioned and private.

Blockchain for Business Requirements:

Shared Ledger

  • Records all transactions across the business network.
  • Shared between participants.
  • Participants have own copy through replication.
  • Permissioned, so participants see only appropriate transactions.
  • THE shared system of record.
  • Immutable due to an append-only data structure.

Smart Contract

  • It provides controlled access to the ledger.
  • It represents the business rules associated with the transaction.
  • It is written in programming languages, supported by the blockchain technology.
  • Example: Defines rules on which a vehicle can be transferred to a new owner.

Privacy

  • Participants in a business network:
    • might be extremely sensitive about how much information they share.
    • require appropriate privacy and confidentiality between subsets of participants.
  • Transactions need to be authenticated.

Accountability/Consensus

  • Participants agree that a transaction is valid.
  • Assets have a verifiable audit trail.
  • Consensus: The process of keeping the ledger transactions synchronized across the network.
  • Ensure that ledgers update only when transactions are approved by the appropriate participants, and that when ledgers do update, they update with the same transactions in the same order.

 

Share it!