The blockchain is a continuously growing ledger that keeps certain records. This ledger is organized as a chain of blocks, each of which contains a certain number of records, hence the name blockchain. The blocks are linked together cryptographically. Each block contains an indicator to the previous block so that the continuity of the ledger is preserved.
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Read Review Visit WebpageFor use as a distributed ledger, the blockchain is not stored at one centralized location but is rather shared by a network of peers. Which means, that everyone has their own version of the blockchain stored on their systems. When the blockchain needs to be altered, there are several processes with which a consensus can be reached to verify the changes. Alterations need an approval of the majority. If one person makes changes to a blockchain the data is still safe because everyone else will continue with the version of the blockchain that the majority shares. This is the main protection mechanism of a distributed ledger technology. There are other consensus algorithms as well, but they all, in general, make the system incorruptible.
Security is one of the biggest advantages of the blockchain technology providers. With the distributed ledger technology there is no one database that stores the whole chain of information, which means that there is no single point of failure. If one copy of the blockchain infrastructure is compromised that is inconsequential for the whole network. For there to be negative consequences more than 50% of the network needs to be hacked and even then, the rest would simply continue as a separate chain and would be unaffected by the rest of the network.
Transparency is another great feature of the technology for blockchain companies. Because there is no single administrative unit, all the members of the network have access to all of the information. Furthermore, the whole chain is always visible to everyone. This leads to another advantage, traceability. With other technologies, it might difficult to clearly see the cause-and-effect relationship among all activities. As blockchains all associated activities, it makes it easier to trace the transactions or activities back to the genesis block i.e. the first block ever added to the chain.
Speed is another advantage of using blockchain technology. If the platform is set up right and is designed to withstand high demand, it will increase the speed of transactions (or adding records to the ledger) compared to other traditional methods. With traditional transactions, there are intermediaries, sometimes even several. Consequently, it could take days for the transaction to go through. With blockchain solution, regardless of the distance between the sender and the recipient, the transactions could be processed momentarily. Transactions do not have to be necessarily monetary, it simply means adding new records to the chain.
Closely related to the previous issue is the cost of the transactions. With intermediaries or third-party companies providing services, there are associated fees that increase the cost significantly. Blockchain service providers are less costly and only take a small fee in the local (to the platform) cryptocurrency to add a new record to the chain. For modern platforms, these fees are a lot cheaper.
The most obvious and widely adopted use-case of the blockchain is for the transactions. The technology cuts out the middlemen for these processes. In the world without the blockchain, people can’t easily exchange digital money, because there is no guarantee that the person on the other end of the exchange will meet their responsibilities. In addition, there is a problem of double-spending. This means that without a third-party guarantor there is no way to make sure that the owner of digital money will not spend it more than once. Consequently, a need for a middleman arises. This function is currently being assumed by banks and other financial institutions. Blockchain is completely trustless, meaning there is no need to trust anyone. The network will make sure that the right transactions go through and that they do so in the right order.
Transactions are only a minor aspect of this new technology. It has a lot more to offer that still needs to be explored. Blockchain 2.0 goes far beyond the scope of cryptocurrencies. With the newer platforms, like Ethereum, it is possible to launch smart contracts. These are more complex products that have pre-set rules and self-execute in due time. There is no single way to classify these instruments. Simply put, whatever terms are written in the smart contract, will execute. Compared to traditional contracts, these instruments are more safe and reliable. Furthermore, smart contracts allow applying the technology to many different business cases.
More specific use-cases for industries that do not necessarily prioritize transactions could be the supply chain management. By tokenizing assets i.e. ascribing a digital record to each physical asset, it is possible to track their status, movement, and other characteristics. For supply chain management, blockchain not only increases transparency and effectiveness, but there is also a greater degree of traceability. This means that it is easier to see what path each product went through with a unified ledger of records than it is with fragmented management systems.
The traceability offered by blockchain makes it a great candidate for another use, namely, accounting. It is obvious that an electronic ledger of records could be used to store accounting data. Doing accounting this way would also make it easier to audit the company as all the data would be stored in an easily-accessible, single ledger.
With smart contracts, the uses of blockchain technology are virtually limitless. There are cases where people are considering it for voting purposes. Others want to use blockchain for energy supply. Using DLT for energy could mean economizing on resources as the usage for each household could be tracked and the energy could be diverted to each according to the need. Some see it as a solution to store user data. Currently, data on users, like their credit score or medical information, are stored on the databases of companies. With blockchain, users can take back the control of this information and only provide it to third-party businesses when they see fit. This significantly increases user privacy. There are countless other ways to use the blockchain technology in practice.
Blockchain solutions providers depend on a business need. There are solutions that could help companies build a blockchain platform from the scratch. With smart contracts, businesses will rarely need to build a whole new blockchain. This process is costly and requires time for development. Of course, there are instances when companies need to build a new blockchain specifically. This could be the case if they want a small private chain distributed to only a handful of members.
In most cases, companies will need to implement solutions on existing blockchain platforms. In this case there is a very wide array of products to choose from. Depending on a business need different platforms can be used. When chosing a platform it is important to clearly set out the priorities. If speed is the most important aspect for the business than a different solution can be used. If privacy or transparency is the priority the provider chosen could be completely different.
There is also the case when the company neither wants to build a new blockchain, nor has the technology or knowledge to use existing platforms. In this case a whole new set of providers come into play. These providers range in the services they provide. Main asset of such solutions is their technology and skill-set. Depending on the provider they could build a product on top of an existing platform.
In conclusion, there are many types of blockchain providers depending on the demands of the customer. Some are able to help companies build a blockchain from scratch, while other help utilize the existing platforms to offer new business solutions. Choosing a provider depends largely on how much resources the company has and what kind of product it is trying to develop. For the use in cases where business needs to have full control and ownership of the blockchain, it would be better to build a whole new network. If a company comes up with a project that it wants to launch on blockchain, and the main advantages it looks for are the speed and transparency, then it would probably be easier to use an existing platform. In fact, this is what most of the ICOs do. They use an existing platform to launch their own projects on. Besides these two options, there are also various solutions that could help companies use blockchain technology in their business process in many different ways. there is no way to classify these solutions just like their is no way to count the use-cases of the blockchain technology.
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