Blockchain Technology and Decentralized Applications.
Oftentimes, whenever the word blockchain is mentioned, Bitcoin or similar cryptocurrency comes to mind. Blockchain technology has long been mistaken as a pseudo for cryptocurrency or other Decentralized Finance (DeFi). However, at the base of this technology is a decentralized ledger. This ledger is like the old-aged ledger systems that humans have used for hundreds of centuries. What differentiates blockchain from other centralized and distributed ledger is the decentralization, transparency, auditability, and immutability of records and or transactions embedded into its fabrics.
Let's explain the core benefits of this technology albeit briefly. Decentralization ensures that every participant has a complete copy of the data in a blockchain network. Transparency gives full visibility to members of the blockchain network of every information stored in the blockchain. The inability to alter a record or transaction after it has been written to the network ensures the immutability. The combination of the above ensures auditability within a blockchain network.
How does blockchain works? Again, a concise explanation will suffice. Each record or transaction data in a blockchain network forms a single block. This block is appended to the previous block to form a chain of blocks (hence Blockchain). This new block has cryptographic hash of the preceding block details embedded on it. The whole chain is built out in this way that any attempt to overwrite an existing record would require huge computational capability to accomplish. In addition to the above, before any new block is appended, members of the network would validate it through a peer-to-peer consensus mechanism.
At the heart of the blockchain benefits, its building composition and various validation mechanisms is a “trustless technology”. On the surface, trustless technology sounds like a drawback or security lapse. However, it highlights how trust is embedded in the system rather than on the participating members of the network. Blockchain can be permission-less or public in which participants can equally read and append records. It could be permissioned or private in which members of the network have restricted access. Finally, a hybrid or consortium blockchain strikes a balance between the public and private types.
Some common use cases abound in Supply Chain Monitoring, Financial Services, Digital Identity, Cyber Security, Digital Voting System, Healthcare Industries, Asset Management, Insurance, Process Improvement etc. Concluding, these use cases are not absolutes. Blockchain technology could be utilized in isolation but can be augmented with other emerging technologies to realize its full benefits. When in doubt of which approach to adopt, always consult with Subject Matter Experts.
