Blockchain

The evolution called Blockchain!

Technology, that may appear to be a breakthrough, most probably like the Internet dissemination in the 80’s.

Blockchain allows any digital information to be distributed in a secure way to the other business parties. It can not be copied or changed. Its value and origin can be easily confirmed in real-time by the other network elements (devices). So in case one of the network elements is hacked (speaking about frauds), the other element will give a signal : “hey, we have another value for this particular event”. This gives grounds for the new security of the transactions and information distribution. This is based on network elements with no need for any third party organization to watch the security of transaction or information flow. Like with the banks today, who secure the e.g. money transfer transactions between payer and receiver. This can be watched with network elements in Blockchain, and traditional bank activity is not required any more.

Not only speaking about financial transactions, but digital information distribution in general, this makes in fact the grounds for the new type of internet. What is more, like with the traditional internet we have today, iPhones, cars… we do not need to know how they are built and how they work. We just use them. The same will happen with Blockchain.

Blockchain in questions and answers

1. What is blockchain?

A blockchain is a kind of data store which doesn’t need a central authority to operate securely and could be distributed among all users and each of them can be sure that stored data are valid and were not tampered with by any malicious user. Technically it is a linked list of data records, called blocks, which have particular fixed order. Data can be stored in various types, from integers, through texts and images, to the code of a computer program. Important feature of a blockchain is that all historical data are kept so it’s easy to perform audit over them and ensure that current state of data is correct or easily find who and when made particular change. It’s worth pointing out that there is no single blockchain solution. A blockchain should be seen as a set of concepts describing how data are stored, processed and shared. Then you need to find particular implementation which fits your needs.

2. What is blockchain good for?

Blockchain based solutions are good for the use cases where it’s important to keep track of all data changes, easily audit them, be able to view historical data or share data with many participants with no worries that someone change them without permission. Moreover there are blockchain technologies which support smart contracts – computer programs which stores its logic and state on a blochchain. A smart contract could implement specific business logic and since everything is stored on a blockchain it’s a perfect solution to handle complex business processes involving many parties without a need to establish additional trusted third party which controls the process.

3. Are blockchain and bitcoin the same thing?

Definitely not. Bitcoin is a peer-to-peer cryptocurrency system and blockchain is only a part of it but very important one. All data about balances of Bitcoin accounts and transfers between them is stored on the Bitcoin blockchain. It is the first widely recognized blockchain implementation which built a foundation for other blockchain technologies which appeared later.

4. Which industries use blockchain?

There are no limitations. Industries in which it’s important to keep track of data changes or/and share/exchange information with other parties could consider using blockchain technology instead of traditional approaches. Good examples are: health care industry, supply chain industry, financial and insurance industries.

5. Is blockchain the technology of the future?

Blockchain is a very promising technology which could simplify interactions between companies and help to implement complex business processes in more effective and transparent way. With each production deployment, the blockchain technology becomes more and more mature and trusted so within next few years we should observe increasing demand on the market for the blockchain based solutions.

6. How do I develop blockchain applications?

You need to become familiar with different blockchain technologies and choose one which best fits your needs. For example Ethereum is good for storing business logic on public blockchain and Hyperledger Fabric is good when you want to establish private blockchain and limit access to only chosen participants. For Ethereum you need to learn a new object oriented language called Solidity and in case of Fabric you can develop your applications in traditional languages: Java, Go, Node.js. Documentation is publicly available so you should start with provided tutorials and in case of any questions you could always rely on a very helpful open source community.

7. Is it possible to install blockchain on a computer?

Definately it is possible to develop blockchain applications on your own personal computer without a need to access the Internet or huge computing resources. To be more precise, you will not install blockchain but specific blockchain solution like Ethereum or Hyperledger Fabric. You need to choose one and follow installation guide in the documentation.

8. Is BC safe?

Yes, it is designed to be safe but always there are things you need to know to stay safe, e.g. you have to keep your private keys secured, if you loose them you will loose access to your account or your identity will be compromised. However you can be sure that data which are stored on the blockchain will never change and you can always see what happened in the past.

ASK EN EXPERT

Bartosz Rybski

Over 10 years of experience in building dedicated nearshore IT solutions for well-known corporate clients from DACH and the USA. I support Digital Transformation with proven services and accelerate with innovative technologies. Always looking for a long-term relationship with a “Think Globally, Act Locally” approach. I graduated from MBA studies.

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