Blockchain technology is an exciting new way to share data and it is revolutionising the world of commerce and society in general.
The system uses immutable Distributed Ledger Technology (DLT) which securely records transactions and assets within a network; assets can be tangible, such as real estate and money or non-physical such as copyright ownership.
Bitcoin
Blockchain technology was created as a framework for Bitcoin, the world’s number one cryptocurrency; the person who is credited with the invention of blockchain is Satoshi Nakamoto. A Japanese developer who saw blockchain as the perfect ledger system on which to manage Bitcoin.
Digital cryptography has long been plagued with the double-spending issue that digital currencies present and by linking blocks of data in a chain, while blockchain technology is now used in other ways aside from managing digital currencies.
How does blockchain work?
An open ledger system whereby all participants are digitally connected on a secure network; take Australia’s leading DeFi development company as an example, they have clients in many sectors, such as:
- Supply chain management
- Banking & finance
- Music industry (copyright)
- Real estate
Once a secure blockchain has been built, all stakeholders must agree before a new transaction is added to the chain.
This is done quietly in the background and only when there is agreement across the board, can a new data block be added to the chain.
Immutable
The great thing about a blockchain is its immutability – data cannot be changed unless another block of data is added.
This is a vital security feature that makes blockchain so attractive; simply put, data is immutable and can only be changed by adding new blocks, which is agreed by all stakeholders.
Types of blockchain
There are several types of blockchain:
- Public blockchain – Bitcoin is a good example of a public blockchain network, with no restrictions, anyone can join the system. The system uses proof-of-work consensus to confirm transactions.
- Consortium blockchain – This is a private network managed by a group of companies, which is often referred to as a federated blockchain; a semi-centralised network that is managed by a group of businesses. Here are a few good ways to manage your personal finances.
- Hybrid blockchain – A system that comprises of elements of a public and consortium blockchain; such a network is 100% programmable and is therefore extremely diverse. Certain stakeholders may have access to data that others do not and access can be controlled using permissions.
If you think that blockchain technology might be right for your business, start with a Google search to find a leading Australian blockchain developer and let the experts show you the many ways that this technology can be used.
Network management
Of course, blockchains are managed by teams of technicians and there are protocols to ensure security; yet when compared to traditional digital networks, blockchain requires minimal supervision.
Blockchain is most definitely here to stay and we can expect to see a diverse range of industries using this technology in the coming years.
