Reading assignment: Benefits of the Blockchain technology

Blockchain and Bitcoin 101
#1548

The benefits of using blockchain:

  1. Transparency - Blockchain offers transparency through the use of consensus whenever information needs to be altered in the network as well as all network participants using the same documentation instead of individual copies.

  2. Security - It is very difficult for security to be compromise on the blockchain as it is a network of computers in different locations and all transactions must be agreed upon by network participants as well as this information being linked and encrypt to the previous transaction.

  3. Improved Traceability - Blockchain is very useful for companies with complex supply chain that wants to know origin of products, what is in the product, where it has been and where it is going as everything in the supply chain can accurately be tracked on the blockchain.

  4. Increased Efficiency and Speed - Using a single digital ledger like blockchain across all network for record keeping transactions makes it more efficient, time consuming and reduces human error. It also stops the need for reconciling multiple ledgers as well as eliminating the need to trust one another as everyone has access to the same information

  5. Reduce Cost - With the use of blockchain, third party or middle man services becomes less needed. Both parties can just trust the information on the blockchain as they have access to the same information due to blockchain being immutable digital ledger.

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#1549

Transparency : All transactions on the blockchain are immutable and stay in the database forever, and everyone can view transactions on the network to see what is going on, Also in order for transactions to be verified all nodes have to verify the transaction to make sure it is real.

Security: Transactions cannot be duplicated, because everyone in the network will not verify a false transaction. The more people in the network the greater the security this is maintained by financial incentives (I.e block rewards for mining)

Improved Traceability: Blockchain allows for people to follow transactions on the network. This benefits/simplifies things such as accounting. Also give the ability to track materials and goods form suppliers and manufactures so the consumer may verify the products that they are buying are made to the standards that are claimed.

Increased efficiency and speed: Blockchain removes central authorities, and operates peer to peer, by verifying transactions with math and code, no need to wait around for third or fourth parties for confirmation. The systems operates 24/7.

Reduced Cost: Very efficiency, therefore leading to less cost, for example computers on the network are doing the work so the main cost is only electricity to maintaining the network and reward miners. Unlike central authorities you have to factor in all overhead expenses such as man power, leaseholds, etc. Blockchain does not need all this therefore making it very competitive when it comes to transaction cost.

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#1550
  1. Transparency:

Because the blockchain is a public ledger that is identical on multiple computers, there is complete transparency on all transactions. Nothing can be hidden or altered and it would be impossible that collusion of the entire network would be achieved.

  1. Security:

All transactions in the blockchain must be agreed upon through consensus on a network which makes it the most secure for of record-keeping system.

  1. Improved traceability:

With the blockchain all transactions, or steps in a supply chain, for example, are recorded and encrypted. This allows for easily being able to trace the steps in a process because everything is documented and recorded in the blockchain.

  1. Increased efficiency and speed:

In the blockchain, recording-keeping is recorded from a single digital ledger that is shared among participants. There is no need for auditing or reconciling transactions which creates efficiency and speed in any process.

  1. Reduced cost:

With blockchain, cost is reduced by not needing third parties or middlemen to confirm if transactions in a process are correct and accurate. All parties in a process will have the same access to one single immutable version.

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#1551

  1. In blockchain all nodes have a copy of the blockchain making it transparent.

  2. All nodes must approve new information being added to the blockchain. In bitcoin all transactions are digitally signed and the blocks are connected via block-hashes. In order to change a block all subsequent blocks need to changed and all nodes need to agree. Also, this will be expensive with proof of work. (the IBM article mentions “encrypting” transactions, which is incorrect for BTC anyway)

  3. Since all transactions are linked in bitcoin you can always trace back where bitcoin came from. In other blockchains you could trace products going through processes (example: luxury watches) or in auditing you could trace financial transactions to their source.

  4. If everyone uses the same blockchain, then linking different ledgers are done automatically - no need for manual cross referencing. Also everyone can see the entire blockchain updated in real time.

  5. The blockchain process will be more automated and will need less human manual interference and therefore cheaper.

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#1552

1) Transparency:
Storing information openly in a distrbuted ledger that is publicly accessible opens up for greater transparency, since everyone can verify the information. This gives possibilities to do real-time auditing and combining accounting with transactions. Another strong use case is for governments. If governments stored their transactions on the blockchain, it would create transparency so that the tax payers can verify what the government spend the tax money on in real time, thus removing incentives for government officials to overspend, while also increasing the difficulty of corruption.

2) Security:
Storing data in a centralized database poses risks because you have to put your trust into a central party. On the other hand, storing data in a distributed database such as in the blockchain removes the need for trust. In a central database, you rely on a central point of failure, while in a decentralized database, you rely on houndreds, thousands or even tens of thousands point of failures instead.

3) Improved traceability
Storing information in a blockchain leaves an audit trail that allows for real-time auditing. In a normal supply-chain, it is easy to cheat because you can in practice just write on your products how they are produced and blah blah blah. This is especially important these days, when all companies are using the climate as a marketing scheme, while not doing enough to prove that they actually follow the principles that they claim. Storing supply-chain data in a blockchain network makes it nearly impossible to cheat, since you always can verify the truth by checking the rest of the network.

4) Increased efficiency and speed:
Firsly, blockchain removes the silos, since everyone is using the same underlying protocol. This greatly improves efficiency and speed alone. Secondly, using a blockchain such as bitcoin removes a lot of intermediaries from the system and this also increases efficiency (lower costs) and speed. In addition, relying on trusted systems comes with big costs, since disputes takes time and also when consumers and suppliers have to trust each other, their cost of doing business increases. An example, when I buy a new apartment, theoretically, there should be a “trust premium”. This means that the price of the apartment is a little higher in a trusted system than it would be in a trustless system, since the sellers of the house has to price in disputes and the probability of scams.

5) Reduced costs
I wrote about this in point 4. The costs are reduced because you do not have to rely on trust, because of higher efficiencies (less paper work and fewer intermediaries) and greater informational security.

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#1553

transparency: global trust in system >>> “perceived trust” between two entities
security: global perspective, recognition and consensus >>> “agreement” between two entities
improved traceability: transparent open data layer leaves signed trail >>> single use contracts between two entities
increased efficiency and speed: single type digital ledger open to global consensus >>> different distinct contracts of varying degrees of transparency, standards use…
reduced cost: automation and trust in system >>> reliance on mediators/middlemen

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#1554

T The consensus method requires a complete and true sequence of actions taken in order to go from “alpha to omega”
S The immutability and global standard ensures beta must follow alpha and precede gamma.
I The traceability is built in and information will accumulate along the path.
I Efficiency is increased by automation. No need to read any report regarding the already performed processes. If something would be wrong, the chain must be interrupted. Thus it is self validating along the way.
R The price can be reduced as there are less middle men. You will never need any external entity to validate, as this is already included.

However considering @ivan s example with yogurt and supply chain, in order to keep everything in the same ledger it will be immense. How does the supply chain determine where to start? (In order to produce the hay for the cows, you will need a tractor and this tractor is made of/by… :infinity: (I do not intend to claim it was made by the Swedish brand “Coop”, rather an infinite number of sub producers)

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#1555

Transparency: Everyone can verify the transactions. All the nodes share a full copy of the ledger and they all have to agree when a transaction comes through (consensus).

Security: Blockchain is a trustless network. There are no intermediaries, it can not be broken, bribed or hacked.

Improved traceability: Provenance. The companies can track everything, no need for a third party. They can also do a real time auditing.

Increased efficiency and speed: No need of paper work, every transaction is stored in the ledger and everyone has access to the information. You don’t have to put your trust intro anyone, you just trust the data.

Reduced costs: No need for a third party.

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#1556

Transparency: everybody shared the same data
Security: data can be added only thru consensus, use of encryption
Improved tracebility: the history of how data has been added is available to everybody
Increased efficiency and speed: hashing make checks rapid
Reduced cost: by removing intermediaries and paperwork

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#1557

Transparency is a benefit because it allows all users to check data.

Security is a benefit because it allows all users to experience a trustless system of data transfer.

Improved traceability is a benefit because all entries of data can be easily verified.

Increased efficiency and speed is a benefit because current methods of information transfer is often very slow and expensive.

Reduced cost is a benefit as it affects all parties in the transfer of data. From business suppliers to customers.

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#1558
  1. Transparency of transactions is ensured through the fact that records can’t be changed without the consensus of all participants of the network. This is very different to a traditional way the transactions are made - theres more potential for errors and oversight to appear.
  2. Security - transactions have to be approved before they can be recorded in blockchain system. You can also track the links to previous transactions made. Decentralisation of the system also improves secutity, because it is more difficult to hack.
  3. Improved traceability - it provides a clear and easy to track audit trail for products- from the origin of their components to the consumer.
  4. Increased efficiency and speed - traditional, paper based process always takes time. With blockchain, it can be faster in a few different aspects: reduces potential for human error, through increased automatisation and less time spent reconciling records relating to transactions.
  5. Reduced cost - reduced number of middlemen that the business needs to track; there’s less documentation to review, therefore the audit is quicker and less costly.
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#1559

1 Transparency. In Blockchain since you have to add all the phases of a transaction has or a product development before become a finish product. many people involved in this steps has to add the information is something is not cleared does not get confirmed.
2 the block chain is based in math ad protocols that can not be change you can only add information to the block chain not change or eliminate
3when using the block chain you will have the whole information of how the transaction was made and you can also audit it in real time this also apply to products in any business with long chain of suppliers
4 due to that when using block chain you eliminate many third parties in the way and that make it a lot faster plus the was of putting information on the blockchain
5 Because with block chain you do not need this party checking for you everything is in the block chain in real time

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#1560

Transparency: This benefit to the blockchain is achieved by distributing the ledger to multiple computers (known as nodes) on the network. Every transaction is recorded and that information is distributed among many different nodes.

Security: Security is a critical part of blockchain technology. This is completed by encrypting the data and then linking it to the previous transaction. There are multiple nodes that record the data so it’s more difficult for hackers to control transactions.

Improved traceability: Blockchain makes traceability easier than traditional means because the asset is recorded along each step of the way. This means that a company can trace where the asset was created from the source (or its supplier in this example).

Increased efficiency and speed: Since our current methods of record-keeping are currently paper-based, this bogs down the speed as to which trading/bargaining occurs. It is also riddled with human error which in turn creates more slowdowns. Blockchain eliminates these slowdowns by accurately annotating every step of the transaction.

Reduced cost: Cost is reduced because there is no need for third-parties to get involved with validating transactions. Because of the previous benefits mentioned, all a company would need to do is to trust the data as it is immutable. There is less data for an employee to have to review which in turn saves countless human hours and therefore cost for hiring the employee.

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#1561

Transparancy: Blockchain technologie represents a public ledger in a network were consensus is reached through incentives, data on a blockchain is more accurate, consistent and transparent.

Security: Enhanced security is reached by consensus in the network achieved through incentives.

Improved tracebility: By adding a complex supply chain to a public ledger based on blockchain technologie.

Increased efficiency and speed: By streamlining and automating processes with blockchain, transactions can be completed faster and more efficiently.

Reduced cost: With blockchain, dont trust verify. less third parties or middle men.

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#1562

  1. Transparency: Transaction records are retained on all network participants and the blockchain keeps a history of all transactions. These transactions are available to all participants with access to them.

  2. Security: Transactions must be verified and approved before they are recorded. Then they are encrypted and stored on all computers on the network. This is critical to help prevent hackers from stealing sensitive data.

  3. Improved traceability: Transactions performed through a traditional supply chain are difficult to track. But when they are made on the blockchain, it creates a trail showing the entire path of the transaction from beginning to end. This allows for verification of the authenticity of the transaction.

  4. Increased efficiency and speed: Paper processes are time consuming, prone to errors and usually require third party handling and mediation. The blockchain automates this entire process and records transactions on a single ledger.

  5. Reduced cost: Because third parties and transaction reviews are no longer required manually, costs are reduced using the far more efficient, TRUSTED, streamlined automated processes of the blockchain.

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#1563

Well supply chains are a hole other beast. Bitcoin is not used to store supply chain data, just transactions, but there are projects tackling this issue like OriginTrail. They achieve this by moving the data to a secondary network of nodes that store the supply chain data and anchor them on a public blockchain Ethereum. How exactly they do that is a bit out of the scope of this thread. I encourage you to check them out :slight_smile:

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#1564

  1. Transparency because all ledgers on the blockchain contains the same unchangable copy of the blockchain transactions.

  2. Security because the deal is only put to the blockchain upon agreement and one part can not regret and pull back. A hacker can not take out values, because they are stored on many computers. Its math and trustless.

  3. Improved traceability because the blockchain contains all transaction that the product have gone through.

  4. Increased efficiency and speed because transactions dont have to go through a third party or mediator.

  5. Reduced cost because you dont have to pay middlemen or find the right one to trust. Everything is verified in the chain.

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#1565

Explain with your own words, why these are the benefits of using a blockchain.

Transparency:No more independent and hidden silos controlled by the few with their own agendas

Security: Highly secured and verified transactions allow for data to be secure due to the incentive mechanism which allows miners to be incentivized for consensus on the truth

Improved traceability: Origins of any item can be traced in an objective and verifiable way.
Increased efficiency and speed: Having a consolidated version of the truth without having disparate silos can increase efficiency and speed.

Reduced cost: Disparate and large volume of redundant data that goes to different silos can be consolidated.

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#1566

Transparency: Transactions are more transparent backed by Blockchain technology using a distributed ledger which is used by Network participants and they share the same documents. Transactions must be updated by consensus which means the computers must agree on the transaction. Changing a signal transaction would require the alteration of all subsequent records and the collusion of entire Network.

Security: Transactions must be agreed upon before recorded. After approval, the transaction is encrypted and linked to precious transaction. Information stored across network of computers and not a lone server. This process makes hacking very difficult.

Improved traceability: If a company is working with a complex supply chain, it can be difficult to trace an item back to it’s origin. Exchanges of goods recorded in a blockchain end up with an audit trail showing where the asset came from and every stop it has made in it’s travels. This historical transaction date helps to verify the authenticity of assets and prevent fraud.

Increased efficiency and speed: A traditional transaction can be a paper heavy process like the closing on a house. This a time consuming and human error can happen. Often 3rd party mediation is required. Blockchain streamlines and automates the process making the process more efficient and quicker. Using blockchain, the ledger is a single ledger which can be shared with all the participants of the transaction. When NOT using blockchain, multiple ledgers have to be reconciled and are laden heavy with paper. With everyone having access to the transaction, it’s easier to trust each other without using several intermediaries. Clearing settlement becomes quicker.

Reduced cost: With blockchain, less 3rd parties are needed and you do not have to trust the party you are doing business with. You have to trust the date on the blockchain. Everyone will have permission to view documentation in order to complete the trade.

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#1567
  1. All parties can access the ledger of transactions
    2.Consensus is required
  2. Real time auditing is possible. You can trace data or products from origin to completion
  3. Can get rid of wasted time and redundancy with middle men. Get rid of complicated and slow processes.
  4. The answer to #4 equals saving money
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