Introduction of Blockchain
Most of us have come across all the buzz surrounding Bitcoin! Some of the predictions claim that fiat currencies and gold may be replaced altogether in order to store value or pay for transactions and that the value of the bitcoin may reach to astronomical heights due to its limited supply! In this article, we will aim to demystify Blockchain, the technology that powers Bitcoin, so you can make your own opinions on how revolutionary this technology may be!
So we may wonder, what is so special about Blockchain? Why do some of the smartest people, including many CEO’s of large companies believe that Blockchain holds a tremendous amount of promise in changing our world and investments to develop this technology continues to increase.
One of the simple ways to understand Blockchain is to visualize it as a database which is shared publicly among many of its participants (albeit Blockchain technology can also be deployed privately so access is restricted). Each of these participants is connected to this network via their computers and all of them maintain an identical copy of this database. Hence one of the core fundamental principles of Blockchain is that information is transparent and available to all the participants in the network at the same time.
Bitcoin is arguably one of the most famous public Blockchain. It essentially uses the Blockchain technology to provide its users a digital currency that can be used to pay for products and services, just like a regular currency, or act as a store of value. Anyone can join the Bitcoin network as it is available to the public.
Key Features of Blockchain
If Blockchain is just a database, then what is so special about it?! There are hundreds of different database technologies available to us. In order to answer this question, let us explore some of the special features which are unique to the Blockchain technology:
- Information Security
Blockchain is a cryptographically secure database. In order to read or write information to the database, the user must have the correct cryptographic keys. Keys are in pairs: a public key that identifies the database and a private key that ensures only the appropriate participant can update the information in the database. This ensures information is available to the people who are meant to read it and / or update it. Additionally, a Blockchain can also be deployed privately to select participants, further restricting access to who can view and/or update the information on the Blockchain.
- Distributed and Decentralization
Another core feature of Blockchain is that it does not have a single point of failure. In the event of a failure on one or more nodes on the Blockchain network, other nodes still retain the data and the network continues to operate. By extension, this means Blockchain is decentralized; no one entity “owns” the network. Blockchain is often referred to as a distributed ledger, as the information resides on several devices on a peer-to-peer network, where each replicates and saves an identical copy of the ledger and updates itself independently.
- Tamper proof
Blockchain derives its name from the fact that data is stored as blocks of information and these blocks are linked together in a manner which resemble a “chain”. New information is essentially updated together as a block and attached to the previous version, creating an immutable, tamper proof record. This property of Blockchain makes it very useful in cases where information must be preserved without any alterations.
- Consensus Driven
Information cannot be updated on the Blockchain unless a majority of the participants check and verify the credentials that are used. This consensus driven model essentially ensures that no one entity can take control of the data and create fraudulent transactions.
While Blockchain technology may not fare well against traditional databases in certain aspects, it does have unique features that make it ideal. Let us explore some of the use cases where Blockchain technology can drive innovative solutions and solve key problems facing our society.
Key Use Cases of Blockchain
Blockchain can be thought of as a digital log of transactions which can be used in a variety of use cases where the value of digital has not yet been realized completely. There are hundreds of granular use cases that are currently in development across the world. Below, we will try to point out some of the key use cases.
- Real Time Traceability
In the real world, it is quite difficult to build traceability of objects or actions. For instance, in retail industry, it is sometimes a huge challenge to have full visibility into the supply chain processes. When product quality or safety issues occurs, it is difficult to trace and recall the affected products, or locate the accountable entity. Additionally. information is often at risk of counterfeiting and tampering. Blockchain technology can solve all these issues by providing a transparent and immutable record of information via a distributed ledger.
- Digital Record Keeping / Digital Identities
Many situations warrant a capability to have permanent digital records. For instance, a city may want to keep the title registrations of the residents. Blockchain technology can really help record such information and ensure that the information remains immutable and accessible to the authorized people. Similarly, Blockchain technology can also be applied to create immutable digital identities of people or companies on a distributed ledger.
- Smart Contracts
One of the most promising use case for Blockchain technology is the implementation of smart contracts. Smart contracts can execute automatically once certain conditions are met, thus, facilitating certain transactions in a contract without any external input from third parties. The application of smart contracts is very wide ranging, including financial transactions, asset and securities management, legal affairs and so on.
Application of Blockchain technology is really game changing and can solve real problems in the world. However, for organizations looking to build products and services using Blockchain technology remains daunting, due to the lack of resources to build them from group up and hire the right talent.
Alibaba Cloud Blockchain as a Service (BaaS)
Alibaba Cloud offers Blockchain as a Service
, an enterprise-level Platform as a Service
(PaaS) based on leading blockchain technologies. This service can help customers build a stable, secure blockchain environment, and manage the deployment, operation, maintenance, and development of blockchain solutions effortlessly. Organizations can focus on the business innovation instead of managing the infrastructure.
In order to find out more about some of the Blockchain solutions offered by Alibaba Cloud, head over to the following link: Alibaba Cloud Blockchain Solution