Blockchain: A shared, immutable ledger which facilitates the recording and tracking of transactions in a business network. A property can be either tangible (house, car, cash or land) or intangible. Intellectual property, patents and copyrights are all examples of assets. Blockchain networks allow anyone to track and trade almost any type of value. This reduces risk and lowers costs.
Why blockchain is so important: Information is what enables businesses to run. The more information you receive, and the faster it is received, the better. The blockchain technology is perfect for sharing that information. It provides instant, transparent and shared information that is accessible only to authorized network members. The blockchain network can track orders as well payments and accounts. It also allows for production tracking. You can view all details of any transaction from end to end because you have a single view. This increases your confidence as well as allowing you to identify new efficiencies.
A blockchain’s key elements
Distributed ledger technology
Access to the distributed ledger, which contains an immutable record and all transactions, is available to network participants. Transactions are only recorded once with this shared ledger. This eliminates duplication that is common in traditional business networks.
Records that are immutable
Once a transaction is recorded to the shared ledger, it can’t be altered or tampered with by any participant. To correct an error in a transaction record, you must add a new transaction to make it visible.
To speed up transactions, a set rules (called a smart-contract) is stored on blockchain and executed automatically. A smart contract can set conditions for corporate bond transfer, provide terms for the payment of travel insurance, and many other things.
How blockchain works
Each transaction is recorded in a “block”, which can be accessed whenever it occurs.
These transactions can show the movement and ownership of an asset, which could be physical (a product) as well as intangible (intellectual). The data block can store any information you choose: who, what? When, where? How much, and even the condition of the shipment, such as the temperature.
Each block connects to the others before and after it
These blocks are used to create a data chain when an asset moves between places or ownership changes. Blocks are linked together securely to prevent alteration or inserting of blocks between existing blocks.
Transactions are encapsulated in an irreversible chain, a blockchain.
Each block added to the blockchain strengthens the verification of previous blocks and thus the entire chain. This renders the blockchain immutable and tamper-proof. This eliminates the potential for tampering from a malicious actor and creates a ledger that you and other network members trust with transactions.