Ultimate guide to Blockchain

Introduction

“Time is money” Benjamin Franklin, and as money is the nerve of war, “the key is in not spending time, but in investing it.” Stephen R. Covey.

For any organization, company, people or entity, time management is what lead to success, and bad time management to failure. Why? Because there are only 24h in one day, and what is going to be done in those 24h will decide of your future.

Since the Fordism, Toyotism, and other optimization processes, human has always been using tangible assets, like people, animals, and machines. Productivity vs time is what makes efficiency.

Overtime, it was discovered that this efficiency can be even more improved. How? By managing the intangible assets. But this solution has not come without any consequences: Data management, privacy, security, reliability, traceability, etc. those have then become the new challenge for companies: Data management.

In this article, you are going to read one of those solutions developed for solving these challenges: Blockchain.

What is Blockchain?

When you speak about blockchain and how you can define it, the easiest way to visualize it is to decompose the name itself: Block and chain:

What is a block: “A group of things bought, dealt with, or considered together” (Block Definition, n.d.)

What is a chain: “A set of connected or related things” (Chain Definition, n.d.)

In this case, the block would be a group of data (transactions, contract, etc.) connected to each other.

Why Blockchain?

Because time is king, data has become its queen, and we can all agree that the queen can be the biggest influence on the king.

As mentioned before, those blocks can be many things, and represent an “action” that has been made, approved, validated and added to the chain. And because each added block is made, approved, and validated before being added, each modification or change would not delete a block but would be added to the chain. This makes the system more reliable and very complicated to change, hack or cheat.

Due to this reliability, many organizations have adopted this system of blockchain in order to solve their issues. The main example was the creation of one of the most famous virtual currency, the Bitcoin.

The purpose of Bitcoin is to track transactions, and those transactions are valued with a non-tangible money, name Bitcoin. Each transaction (action) made represent 1 added block to a chain, and therefore, cannot be falsified. And this is because this level of security is very high, people trust this system and keep investing in it, which creates more blockchains, which makes it more reliable.

Now what is the relation for companies and business? Imagine the flow of data companies can exchange inside and outside its organization. If those kinds of information are easy to access, they can also become easy to modify, and therefore to falsify. This has been the case for many entities, especially during this time of Covid where cyber-attacks have affected many.

If your information, transactions, changes, updates, portfolios, contracts, etc. can become impossible to access unless you are allowed to, this gives more confidence to your partners and stakeholders, and at the end, more time saved because no need to solve those privacy issues.

Is there only 1 Blockchain?

There are 4 different types of Blockchain systems

1)Public Blockchain

It is the one just mentioned below, the virtual currency, or cryptocurrency.

“Public” indicates that anyone with an internet connection can access the blockchain platform and become an “authorized node”. Once an authorized node, you can then access to the blockchain you want, and see the past and current records of them. You can also add or even validate also called mining transactions to this blockchain. “Bitcoin mining is the process of verifying bitcoin transactions and recording them in the public blockchain ledger. In blockchain, the transactions are verified by bitcoin users, so basically the transactions have to be verified by the participants of the network. Those who have the required hardware and computing power are called miners.” (Bitcoin Mining Definition, n.d.)

2)Private Blockchain

Unlike the public one, the private blockchain works in a restrictive network and its access is controlled. On the other hand, the global system is similar to the public blockchain, although because it is restricted, the scale is therefore reduced. Instead of being accessible on the web, the private blockchain is often used inside a company/ organization. The other common name for it is “permissioned blockchain” or “enterprise blockchain”.

“For example, companies may choose to take advantage of blockchain technology while not giving up their competitive advantage to third parties. They can use private blockchains for trade secret management, for auditing,”James Godefroy

3)Hybrid blockchain

The hybrid joins both the private and the public blockchain. By allowing the public to have access to the data, but gives restriction to what can be public, and who can access the sensitive data.

One example is the medical records for hospitals and patients. Only the medical staff can access the patients’ files, although only the related patient can access their own files (using a smart contract for example). “A smart contract is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties.” (What is a smart contract?, n.d.)

4)Consortium Blockchain

The consortium blockchain can be similar to the hybrid one in the sense that is it using both public and private specificities. What makes it different is that consortium blockchain is a private blockchain with limited access to a particular group but does not depend on a single entity.  

This prevention is due to having preset nodes, that are “validator nodes” and can initiate, receive, and validate the transactions. Member nodes can only receive or initiate transactions.

For example, “IBM FOOD Trust creates a digital ledger that tracks food from the farm to processing facilities, to distributors and grocery shelves. One of the rationales for this is to trace bacteria outbreaks quickly before they spread. The current tracing is paper-based and takes weeks. With blockchain, scanning product is easy and can trace back to the source with the precision of seconds instead of weeks, according to Vice President of Food at Walmart. At the farm, the information is captured on a handheld system as well at the packing house. With a permissioned blockchain, different players come together as validators hence increasing transparency and efficiency. No one party can change the information without notifying the others. Traceability is also highly enhanced.” A Case for Consortium Blockchains and What’s Happening in this space, n.d.

Conclusion

I hope you have a better understanding of that is a blockchain, and how can it be useful for companies and organizations.

This article is only an overview of the blockchain, and I invite you to read more articles if you are willing to understand more the specificities, plus and cons of each kind. Related to your business, industry, issues you want to solve, you will find a different blockchain that will answer, or fit you best.

More articles will come, and if you want to be notified when they will be published, please subscribe to our newsletter.

References

A Case for Consortium Blockchains and What’s Happening in this space. (n.d.). Retrieved from https://hackernoon.com: https://hackernoon.com/making-the-case-for-consortium-blockchains-zpbc2371e

Bitcoin Mining Definition. (n.d.). Retrieved from https://www.simplilearn.com/: https://www.simplilearn.com/bitcoin-mining-explained-article

Block Definition. (n.d.). Retrieved from Cambridge Dictionary: https://dictionary.cambridge.org/dictionary/english/block

Chain Definition. (n.d.). Retrieved from Cambridge Dictionary: https://dictionary.cambridge.org/dictionary/english/chain

What are the 4 different types of blockchain technology? (n.d.). Retrieved from https://searchcio.techtarget.com: https://searchcio.techtarget.com/feature/What-are-the-4-different-types-of-blockchain-technology

What is a smart contract? (n.d.). Retrieved from www.blockgeeks.com: https://blockgeeks.com/guides/smart-contracts/

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