Blockchain is a virtual ledger that keeps shared, chronological record of Bitcoin and other cryptocurrency transactions, and businesses are exploring its potential for a variety of business needs.
When Blockchain was created, it was intended to be used for keeping records of transactions carried out using Bitcoin and similar cryptocurrency. However, as it developed, businesses started recognizing in it a potential for other business uses as well so many industries are utilizing this digital ledger technology. Here’s all that you need to know about Blockchain and what it can offer to your business.
What Blockchain Really Is
Used for digital record keeping, Blockchain acts like a ledger with each entry being that of a transaction that is virtually signed ensuring authenticity and security. Because of this simple yet secure system, all the entries present in a Blockchain are considered to be authentic. However, that’s not all there is to Blockchain. Blockchain technology can distribute digital entries to an infrastructure, which then acts as recorded data that can provide information about any transaction at any given moment.
How It Works
For secure record keeping, Blockchain uses a unique and complex algorithm. Every time there is an input of a new transaction or a previous one is edited, Blockchain uses a variety of algorithms to verify the block being entered. Only when most of the nodes verify that the signature is authentic, the new block is then added into the ledger and forms another block in the series of transactional blocks. However, if most of the nodes cannot verify authenticity, the new block is not added to the ledger.
Benefits of Blockchain
One of the major benefits of Blockchain is that it does not require only one authority that can edit or add transactions. Instead, multiple participants can add to it, such as Bitcoin’s public ledger. This way, for private companies who are affiliated with partners or have joint ventures can easily make use of a single ledger with equally distributed authority without needing one central authority figure. There is no need for a manager either because Blockchain is capable of verifying transactions. This greatly reduces the cost of keeping records for any organization.
Another benefit of Blockchain is that it is extremely secure and each entry is authenticated with a signature. There is very little chance of error or fraud entries. Since the technology verifies the history of the block before accepting an entry, there is very little space for manipulation of the technology for malevolent purposes. However, this is primarily a theoretical analysis and businesses are still recommended to use the technology with caution and first analyze how it holds up in today’s digital economy.
Blockchain is also very useful for keeping track of assets in a supply chain as they move from vendors to manufacturing facilities and further on towards logistics and then their final delivery points. The use of technological tracking allows businesses to streamline their processes and reduces risk of error.