A Blockchain, as the name suggests, is a chain of blocks (i.e., collection of information). The information is contained in blocks, which are linked with each other to form a Blockchain. It is essentially a digital ledger of transactions that is duplicated and distributed across an intended network of computer systems, also known as nodes on the blockchain. Each block has information about the block added to the chain immediately before it. This information includes a hash of the previously added block, a timestamp and transaction data.
Blockchain is often thought of as a technology that has a future in banking and monetary transactions but Blockchain is used in a variety of industries today such as:
- Food Industry: IBM has created a food trust blockchain to trace the journey of food products. This way, there is a track of all the locations and people the food product had to pass through to get to stores.
- Real Estate: Blockchain also has great scope of usage in the real estate business to reduce property crime by having legitimate and easily accessible records that cannot be tampered with.
- Healthcare: Blockchain can be used to secure Personal Health Records (PHR) preventing third parties from getting access to these records
- Decentralization: One of the major attributes and advantages of using a Blockchain is decentralization. There is no central authority governing the Blockchain and neither does the blockchain store any information centrally (e.g., on specific servers). Every node of the network has an updated copy on the Blockchain which makes it extremely difficult to tamper with, because it would require an attacker to tamper with not just one central Blockchain but with copies of the Blockchain on multiple nodes on the network.
- Cost Reduction: Since the system is decentralized, an organization could save on 3rd party vendor costs while keeping their data secure.
- Transparency: The use of blockchain allows for the tracking of the lifecycle of a product making the supply chain more efficient while saving up time on finding the source point of a problem and improving traceability.
- Scalability: Decentralization brings with it the disadvantage of scalability. The current Blockchain systems are not nearly as scalable as a centralized system. Transactions depend on network congestion i.e., if there are more nodes on the network, there might be a delay in processing times.
- Inefficiency in storage: It would not be ideal to have a ledger with blocks of data that could be in the range of various hundred gigabytes. By ignoring additional protocols to use with Blockchain, data storage and transfer becomes an issue which comes with additional costs and inefficiency.
- Users: Users who are not unfamiliar with this technology and its use can be a potential vulnerability. In this system, each user has their private key that is their only authentication method. If this key is compromised or lost, it would lock the user out.
Blockchain is a revolutionary technology that has the potential to be used in numerous industries. The concept and theory of Blockchain indicates that it is a highly secure system. Once adoption and implementation challenges are overcome, there is a huge potential of changing the way we operate on the Internet and tackle security compromises and mismanagement within industries.
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