Blockchain is a ledger of records that stores data in batches called blocks that use the cryptographic technology to authenticate and connect to each other. The database is secured from any kind of tampering or revision as they are connected in an unbreakable chain that is timestamped (Vigna and Casey 4). The technology was introduced to the contemporary world by a person or people using the pseudonym Satoshi Nakamoto in 2008 giving rise to the strongest digital currency (Staff). Additionally, the blocks are incorruptible because they reference and identify the previous block by a hashing function that ensures that they form a chain that is unbroken as suggested by the name.
The database uses a peer-to-peer network with a server that timestamps entries instead of the usual way where data is tor4d in one computer controlled by one individual. Hence, the databases create an open and distributed ledger that can record transactions between parties in a permanent and verifiable way that can be accessed by people with interest or with permissions to access the data recorded (Bahga and Madisetti 23). The irreversibility of the ledger guarantees that old transactions are recorded as they happened and in the event alterations need to be made they are registered as a new entry in the ledger and not on the old record. The feature ensures that a person can be able to track the process of any given transaction by accessing its blockchain. Moreover, it makes sure that anyone on the network can check and see the identical transaction history from anywhere as everybody else.
While it has been becoming popular in the financial world, blockchains can be used for medical records, recording events, proving and validating documents, identity management, and document management. Blockchain is a very important and revolutionary technology that all businesses will require in the coming years as it allows for records to be distributed, accessed, and verified by all that wish to have access to the said information. The primary value of the technology to business is the fact that it cannot be altered or tampered without recording the changes. Businesses require a ledger or database that gives a concise history of all the transactions or record of events. The technology ensures that the transactions are recorded and timestamped which reduces the chances of double spending and accountability. It increases accountability in an organization since any new entry is recorded as a new block that is linked to other blocks (Iansiti and Lakhani 119). Furthermore, all the transactions are authorized by miners, which make them immutable and secure from the threat of hackers. Businesses can leverage the unique attributes of the technology for their back-office data log file as it has traceability that can be difficult for evil and corrupt actors within the business to manipulate. It can be a very effective way of ensuring that all recorded transactions are real, valid and that practices like money laundering have been averted. Thus, the technology makes administration and management of business easier by promoting transparency as the records are publicly available, accessible, and distributed, which makes tracking the history and predicting future projects of the organization easier.
Vetting consumers or contract bidders is a rigorous process that takes up much time from business organizations before entering into business. The blockchain technology introduces the use of smart contracts where the network and distributed ledgers are programmed to execute certain contracts when some conditions are met. For example, Ethereum is a blockchain project that is used to automate specific contracts by having features that allow automating purchases or sales when a certain set benchmark is attained by the client (Popper B1). Such a feature would ensure that a client is vetted and validated by the network before a business conducts either an automated or any other transaction reducing the risk of falling into fraudulent customers. Therefore, the technology makes business transactions easier by reducing the third party or intermediaries by fostering the peer-to-peer transactions that are unique and faster.
Furthermore, a company can use the technology in consumer research. The blockchain technology is used by consumers who want to know that the ethical claims made by companies about their products are real. Therefore, a business can use the data on their product as well as those of its competitors to establish the expectations of consumers and as such improve its goods or create a product that fills a gap in the market. Moreover, the technology can be used to predict markets by offering a high degree of accuracy that cancels out the unexamined biases that can distort judgment. It predicts the market by analyzing the characteristics of the market as well as the effect certain actions or events have on the consumer and plays a major role in risk management and future directions of business organizations.
The blockchain technology has been very fundamental in the protection of intellectual property of businesses. It can be used to protect the creations and inventions of people by eliminating the risk of file copying and redistribution and thus protecting the creators financially. Additionally, blockchains protect vendors from being duped through the identity management option of validating the clients. Businesses that operate online suffer the consequences of being unable to identify and verify who they are conducting business with, which can be resolved by using the technology. Blockchain creates an inerasable history that, in turn, creates a verifiable good reputation which is an essential condition for conducting transactions or deals online.
Blockchain is a public ledger which validates and records every transaction made and provides more security and reliability as compared to the present ways of storing private data. The database is not stored on one computer in the blockchain technology like in other digital records, and as such it cannot be manipulated by the person that has access (Iansiti and Lakhani 125). Blockchain allows all changes to be stored in the history blocks, which means if one author wishes to change something on a document he or she does not have to wait for the document to be sent back but can edit it and send the edited copy in real time to all parties interested in the record. Unlike other digital record storage, blockchain cannot be doctored or manipulated, which makes it the most reliable and transparent way of storing, validating, and verifying information.
Nevertheless, the blockchain technology has a number of challenges associated with its implementation, and the primary one is lack of awareness and understanding. Most people do not understand how it works, which leads in exploitation of the uninformed by the informed (Vigna and Casey 350). Therefore, it becomes difficult to create a distributed ledger that allows businesses to share the pain or opportunity because of the heightened levels of mistrust. Secondly, people are very cautious of abandoning a culture they have depended on for ages to embrace digital commerce and a centralized network as the implementation of blockchain technology requires an almost complete business transformation. The blockchain technology has been deemed as operating above regulation, which makes it difficult for organizations that view oversight as an integral part of their transactions; which is not the case as networks like Bitcoin operate outside the regulatory parameters.
Therefore, blockchain is a revolutionary technology that creates ledgers or databases that are secured from any tampering or manipulation as the records are linked in a permanent timestamped chain. The technology is very crucial to businesses as it provides transparency, reduces fraudulent transactions, double paying, and declutters the vetting process by eliminating the third party; it also has other benefits associated with reliable and futuristic technology. However, the technology has challenges that include lack of awareness and understating, the fear of abandoning an old culture as well regulation of the technology in its implementation process.
Bahga, Arshdeep, and Vijay Madisetti. Blockchain Applications: A Hands-On Approach. VPT, 2017.
Iansiti, Marco, and Karim Lakhani. “The Truth About Blockchain.” Harvard Business Review January-February 2017: 118-127.
Popper, Nathan. “New Kid on the Blockchain.” New York Times 28 March 2016: B1.
Staff, Economist. “Blockchains: The Great Chain of Being Sure about Things.” The Economist, 31 October 2015,
www.economist.com/news/briefing/21677228-technology-behind-bitcoin-lets-people-who-do-not-know-or-trust-each-other-build-dependable. Accessed 4 May 2017.
Vigna, Paul, and Michael Casey. The Age of Cryptocurrency: How Bitcoin and the Blockchain Are Challenging the Global Economic Order. Picador, 2016.
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