Block Chain is the foundational technology for the peer-to-peer shared public ledger systems in which all the transactions are open and verified by the users themselves. When a user shares a fact, all users give consensus to confirm the fact. The new fact is then updated in the shared ledger system. Users can be anonymous and the sender and receiver details are encrypted.
Block Chain technology has provided a means for record keeping as all transactions are permanent and cannot be edited. Even if there are some wrong confirmations, overall end-to-end transactions can be verified to confirm a process. Block Chain works on one or more of the following verifications.
The public ledger system eliminates the intermediaries such as agents, brokers, lawyers, banks, and so on. Thereby, reducing the overall cost and delays. Companies and individuals across borders are able to perform transactions with the help of Block Chain technology. Transparency and trust are the two main reasons why the Block Chain is revolutionizing the way of conducting business.
Every company can have their own Block Chain software. Linux Foundation has developed Hyperledger software for users to build on top of it. Block Chain distributed ledger systems can be customized according to the industry and domain. Security, Scalability, and Compatibility with the other systems is possible with the Block Chain technology.
IBM Blockchain has helped many industries leverage the Block Chain technology to increase the efficiency and reduce costs.
Block Chain is able to produce and execute smart contracts which can also leverage the Internet-of-Things (IOT) technology by using the real-time data from the sensors and scanners.
Transactions in the ledger systems are the basis for the Block Chain. A block is generated for every verification or a group of verifications. The code from the block is attached to the next block to form a chain which is maintained until the process is completed. Users or nodes verify the transactions using the software and confirm them.
Every block consists of a hash (identity) of the previous block, data, and the new hash. In order to confirm the transactions, the hash has to be solved by special hardware and software. The rate at which the hash is solved is known as the hash rate. All users in the Block Chain have the same ledger and when a new block is created, all users are updated with the new block.
Transactions are confirmed faster and efficiently in a Block Chain. The transactions in a Block Chain are open but they can be made private to a group of people. All transactions are final and cannot be edited. The encryption of the transactions make them secure and safe way of maintaining records.
Block Chain technology is emerging and the number of industries applying Block Chain is increasing every day. The implementation depends on the company using the Block Chain and it can be customized to be compatible with other ledger systems as well. The inbuilt signing, security, and compliance systems can be used for multinational operations and faster transaction processing.
Here are some applications of Block Chain.
One of the largest application of Block Chain technology is the Crypto Currency. Hundreds of digital currencies and Initial-Coin-Offerings are made possible by the Block Chain. Popular Block Chain Currency include the Bitcoin, Ether, Litecoin, Monero, Ripple, IOTA, and so on.
Block Chain Currency act as an alternate to fiat currency and can be used for international trading of goods and services. Individuals can buy and sell from anywhere to anyone using the Block Chain Currency and eliminate the intermediate fees by the banks. The security and the distributed ledger systems by the Block Chain is thus leveraged by many.
Block Chain Currency is bought through the exchanges which match the orders. Alternately, miners choose to mine the digital currency on their own using relevant software and harware. Block Chain Currency can also be traded on the Over-the-Counter markets and Buyers have recently started Bitcoin on futures trading.
Different national banks and trading exchanges have recognized the Block Chain Currency. Banks and financial instituitions are modifying their systems to accommodate the latest digital currencies. Some may see the Block Chain as disrupting but the real benefits of the technology are yet to be fully utilized.