When it comes to public hype and brouhaha, Blockchain managed to gain maximum attention in recent times. It gained an overwhelming amount of response from technically inclined and non-inclined people both. Blockchain has been proposed as a solution to some of the most complex set of problems and industries that it is increasingly difficult to keep up, let alone develop a reasoned and sensible approach to the technology.
If we start to think seriously on this front, one aspect that you may find intriguing is its significantly high number of crusaders– those who people who credit Blockchain that it can solve almost everything from global financial inequality to access to financing for start-ups, the provision of ID for refugees, to solving supply chain problems and also allowing people to sell their houses without needing an estate agent.
Seems as if a majority of people have started to believe that this is what they were waiting for; a technology like Blockchain to arrive to solve every and any problem.
Impact of Blockchain from business perspective
If one should adopt Blockchain or not is not merely a technological decision. This is also a business decision. Any use cases one refers to, must be able to solve real problems for organizations. And, as it goes with any technology deployment, the overall business need itself is the place to start.
The overall revolution in information and communication industry has provided cheap and powerful computational capacity in the hands of a broad number of people around the globe. Consequently, the physical capital for creation and production is now broadly distributed throughout society – and in control of individuals, rather than under the control of large-scale entities. These entities can include but are not limited to corporations, governments and research institutions.
We can take the example of entertainment and media industry. The development of user generated content (UGC) and the increasing popularity of platforms such as YouTube. Blockchain is as close to this concept as it can get. The only difference being that it allows individuals to exchange money and other assets with one another, without requiring an intermediary to do so.
The key purpose behind the application of any new technology is to improve business processes. Even previous generations of technology were primarily about the faster and more secure exchange of information; aimed at delivering the same objectives faster. Take for example the back office services like payroll and accounting. They got digitized with time to achieve efficiency and speed.
Taking Blockchain into account, it is all about the exchange of value. Blockchain is inclined towards enabling individuals to exchange currency and other assets with one another without the need to rely on a third party to manage the transactions. This also states the dramatic redefinition of business processes associated within and between companies.
Types of Blockchain Distributed Ledger Technology
Blockchain operates on three main types of different ledgers. It is called distributed ledger technology (DLT). Those are: permissionless-public systems; private, permissioned systems; and hybrid systems.
Each of these versions is vital in achieving different objectives and meet different requirements. These different versions carry their own unique properties and each has different forms of access control for reading and editing the information on the Blockchain.
When you move from right to left across the types of ledger, the overall level of decentralization goes up, meanwhile decreasing the transaction speed.
- Permissionless, public, shared systems:– These types of systems allow anyone to join the network, to write to the network and to read the transactions from those networks. They are devoid of any single owner. It means that every single individual on the network has an identical copy of the “ledger”.
You can take a prototype example from the media industry; the use of Bitcoin. Pertaining to the . unique design goals of operating in an entirely open environment sans any points of centralized trust, and in which potentially harmful actors are not just allowed to submit transactions but also are allowed to participate in transaction validation, the aforementioned systems add an extra component that prevents such activities.
One of the most common methods is called proof of work, but there are other models, like proof of stake and proof of authority. Proof of work is expensive in terms of computational power, uses a significant amount of electricity, does not scale well and demands large numbers of network participants in order to generate “trust”. But, still this approach does allow large number of participants to work together based on the codes only in a decentralized manner. Two of the most significant examples today are Bitcoin and Ethereum.
- Permissioned, public, shared systems:– They can be called as a form of hybrid system which provides for situations where whitelisted access is required but all the transactions should be publicly viewable. As an example, there are many government applications where only a limited number of people are allowed to write to the network but all transactions can be publicly verified.
- Permissioned, private, shared systems:– These systems have whitelisted access, which means that only the ones who have the permission can read or write to such systems. They may have either one or multiple owners– more often than not consortia are formed in order to manage the ownership.
Understanding the Blockchain framework in action
We know that Blockchain has the ability to provide a shared ledger of transactions to all parties, with full traceability of any assets and associated activity. Hence, organizations can not only cut their auditing costs but also raise levels of confidence in the data that they are generating without having to manually validate the data.
If compliance is mismanaged, there is a great deal of risk and damage that will come next. When you know that Blockchain can’t be tampered with, can provide increased confidence in the data, while aligning administrative processes and downgrading costs. Processes that involve manual checks for compliance currently take weeks. They can eventually be accelerated through a distributed ledger of all relevant information. Experts are tying Blockchain technology to emerging technologies such as AI and the IoT to enable real-time data gathering and processing that improves overall compliance.
One should deeply introspect about the ways in which Blockchain may affect a given industry. Take the time to understand the characteristics and value drivers of Blockchain. This will help organizations assess the opportunities that exist and also know what threats may loom. It is advisable to consult or get in touch with a Blockchain development company who will help in laying down the milestones and roadblocks in front of you; bringing a much clear picture out for you. industries.