The recent surge in the popularity of blockchain is the cause of the growing demand for the implementation of this technology. Do all organizations utilizing blockchain technology, however, have the same requirements?
Of course, the answer is no! Every organization has unique needs that necessitate specific kinds of blockchain. And in this tutorial, we’ll examine the meaning of blockchain and understand these various blockchain variants.
What Is Blockchain Technology?
A corporate network can share open information thanks to the advanced database system known as blockchain technology. Data is kept in blocks that are connected together in a chain and stored in a blockchain database. As long as there is network consensus, the chain cannot be destroyed or changed, the data is still temporally consistent. To manage orders, payments, accounts, and other transactions, you can use blockchain technology and understand its meaning to establish an immutable or unchangeable record. Thanks to the system’s inherent capabilities, which also prevent unauthorized transaction submissions, a consistent picture of these transactions was possible.
Importance of Blockchain
Traditional database techniques have a number of drawbacks for storing financial transactions. Consider the selling of a piece of real estate. The property belongs to the buyer once the money has been exchanged. Both the buyer and the seller can assert that the money has been paid even though it hasn’t, and both can easily refute this. The transaction is complicated by the presence of this centralized authority, which also creates a vulnerability. If the primary database was hacked, both parties will suffer the loss.
These problems are resolved by blockchain, which develops a decentralized, unchangeable framework for transaction recording. Blockchain develops separate ledgers for both the buyer and the seller in real estate transactions. All transactions are subject to both parties’ permission and are immediately and automatically updated in both ledgers. The entire ledger will be tarnished by any alteration to prior transactions. Due to these features, blockchain technology has proven valuable in a variety of fields, including the creation of digital currencies like Bitcoin.
Different Industry & Blockchain Technology
Blockchain technology is a new technology being used creatively by many industries. In the subsections below, we discuss a few use examples in various industries:
Blockchain technology is used by energy companies to build peer-to-peer energy trading networks and simplify access to renewable energy. Consider the following applications as examples:
- Using blockchain technology, energy companies have developed a trading platform for the private sale of electricity. Solar-panel-equipped homeowners can utilize this platform to sell their extra solar energy to their close neighbors. The process is mostly automated because smart meters generate transactions, which are then recorded on the blockchain.
Blockchain technology is being used by established financial institutions like banks and stock exchanges to regulate online payments, accounts, and market trading. For example, Singapore Exchange Limited uses blockchain technology to build a more efficient interbank payment account. Investment holding company Singapore Exchange Limited provides financial trading services across Asia. They overcame a variety of difficulties, such as batch processing and manually tying up thousands of financial transactions, by utilizing blockchain.
Media & Entertainment
Businesses in the media and entertainment industry managed copyright data using blockchain-based solutions. Copyright authentication is necessary in order for artists to earn fair compensation. The documenting of several transactions is necessary in order to sell or transfer intellectual content. Sony Music Entertainment Japan made use of blockchain technology to improve the effectiveness of DRM. In order to increase efficiency and lower costs associated with handling copyright, they have had success using blockchain technology.
The Blockchain Networks
There are four main types of decentralised or dispersed networks in the blockchain:
Public Blockchain Networks
Access to public blockchains is unrestricted and available to all users. Access to, updating of, and validation of the blockchain are shared by all parties. Bitcoin, Ethereum, and Litecoin are the three most popular cryptocurrencies that are traded and mined on public blockchains.
Private Blockchain Networks
Managed blockchains, usually referred to as private blockchains, are run by a single organization. Who is qualified to join the network? What privileges are determined by the authorities? The exchange network for virtual money served as an example. Ripple is a private blockchain for companies.
Hybrid Blockchain Networks
Businesses can create private, permission-based systems in addition to public ones. While restricting access to some data stored on the blockchain in this way, they maintain public access to the remaining data. They use smart contracts to give public users the ability to confirm whether private transactions have been carried out. Hybrid blockchains, for instance, can permit public access to digital currency while preserving the privacy of money stored by banks.
Consortium Blockchain Networks
A collection of institutions governs blockchain consortium networks. Pre-selected organizations, which also decide on data access privileges jointly maintained the blockchain. Blockchain consortium networks are occasionally preferred by industry sectors that profit from shared responsibility and have numerous organizations working toward the same objectives. One non-profit blockchain collaboration that aims to digitize the shipping industry and promote more operator cooperation in the marine sector is the Global Shipping Business Network Consortium.
Benefits Of Blockchain Technology
One ongoing concern is that someone might change the underlying program to make up fake funds for himself. By combining the three ideas of decentralization, consensus, and encryption, blockchain, on the other hand, creates a very secure underpinning software system that is almost impossible to alter. One user cannot alter the transaction records, and there is no single point of failure.
Company-to-business transactions can be time-consuming and result in operational bottlenecks, particularly when third-party regulatory agencies and compliance are involved. Due to blockchain’s transparency and smart contracts, such business transactions are speedier and more effective.
Electronic transactions must be created, distributed, preserved, and reconstructed securely and auditable. Blockchain records are always in chronological order since they are not subject to revision in the past. The auditing process is expedited by data transparency.
The Bottom Line
Now, you know which statement is true about blockchain? The best blockchain services offer specially designed tools to meet your needs. You learned about blockchain info, its kinds, its features, and the benefits and drawbacks of each type in this tutorial.