Blockchain Technology brings to modern businesses several advantages not previously attainable in traditional business environments. First and foremost,it’s implied nature of provenance brings to the table for the first time a traceability which was previously reliant upon trust between multiple parties. Since the transactions on the blockchain are recorded in real time only after a consensus of many parties agree that the entry is valid, we have an implied trust factor present that previously was verifiable by only one or two separate entries in the traditional ledger format.
Think of blockchain as the worlds first three entry ledger system. The supplier or sender maintains its record of the transaction, as does the receiver. Now with this new technology, the transactionis also recorded in a worldwide database structure of shared computers all comparing, agreeing, verifying and entering these transactions in a virtual third ledger.
This “third ledger”, known as the blockchain, can be public or private, can house all of the transactions in a database type structure,and can be accessed in real time anytime as long as the user has permission to access the chain. Because the ledger is shared by many machines in a virtual environment, it relies on encryption to protect the data from being altered.The details of the transaction in the form of the “secret” are protected, while the circumstances around the transaction remain public for verification and tracing purposes.The publicly verifiable nature of the transactions provide the transparency of the transfer of an asset throughout its history,assist with traceability, and also provide a never before seen level of security.
The first improvement on the subject of security is seen in the nature of the blockchain’s construction. also, since a collection of parties must agree upon the transaction prior to it being recorded on the chain, we can be vastly more secure that the information surrounding the transaction is trustworthy, accurate, and reliable. The encryption that protects the details that make up each block provides the final layer of security, as we know that that the data recorded will be intact throughout the life of the chain, and cannot be altered or corrupted.
For most businesses, the rubber meets the road when it comes to the bottom line. This is perhaps where many industries will forge ahead into this new technology, despite doubts about the concept of cryptocurrency in the future.
Because all the information necessary to transact is stored on this ledger in a virtual network,it can be accessed extremely quickly and efficiently. Furthermore, the verification of the information, assets, conditions of a contract, or other details have either already been achieved, or can be achieved seamlessly with oracles that operate in machine time and can retrieve results in milliseconds. The old guard of paper pushing and tortoise speed verification, confirmations,transfers of assets and the like is immediately eliminated. This drives down the costs of doing business from the former business models as it requires no employees, a fraction of the time, and little or no human coordination or communication to elicit. The new guard of Blockchain eliminates middlemen and handlers, removes obstacles like ACH clearing houses and cross border financial conversions and other roadblocks that slow down business transactions. Furthermore, through the construction and use of smart contracts, entire transactions that used to take days or weeks and mountains of paperwork being exchanged in and through different jurisdictions can now happen instantaneously in real time, with time stamped, verified records to prove their validity and execution.
