Understanding what blockchain is and how it works.
What is Blockchain?
It is a shared journal for recording the history of transactions – that is impossible to modify or alter.
Why do we need Blockchain?
Transactions happening every second — orders, payments, account tracking. Often, each transector has his own ledger — and, thus, his own version of the truth.
Having more than one ledgers is often causes error and more the chances of fraud and disorganized. The goal of blockchain is to see end-to-end transactions minimising mentioned vulnerableness.
How does Blockchain work?
1. Every participant has his own, separate ledger — making the chances of human error and fraud more.
2. Inefficiencies are generated by intermediaries for validation.
3. More complicated process with piled up paperwork, causing more delays and loose to stakeholders.
Blockchain making complex transactions better.
1. Single shared ledger that is tampered evident. Cannot be modified if once recorded.
2. To add a new transaction to the network, a consensus is required or transaction will not be executed.
3. Increase in efficiency and speedy transactions, less or no paper processes.
Building a Blockchain
- Whenever a transaction occurs, it puts into a block.
- Every block is connected to a one before and after block
- Each block is added to the next in an irreversible chain.
- Transactions are blocked together.
A recorded system been shared among the participants of the network. Removing the need to reconcilele disparate ledger.
Every member has the permission or access rights cos to share the confidential information on the need to know basis.
Every network member needs to give consensus and eventually all the validated transactions are recorded. And no one has the authority to delete it not even system admin.
Working of Blockchain with an example:
Tracking diamonds from mine to final customer is complex. Diamond smuggling, fraud, counterfeit diamonds and unethically mined stones pose real challenges. With blockchain, it’s possible to: