Assistant Lecturer & PHD Student & 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.