Blockchain is a type of distributed ledger just like Google spreadsheet or MS Excel (Windows) that features collection of data, spread across the network among all peers in the network. Each peer carries the copy of the complete ledger. As a distributed ledger for maintaining a permanent and tamper-proof record of transactional data, Blockchain is, in fact, a decentralized database where block represents the collection of data which is managed by computers belonging to a peer-to-peer (P2P) network. Each of the computers in the distributed network maintains a copy of the ledger to prevent a single point of failure (SPOF) and all copies are updated and validated simultaneously. A blockchain is resistant to modification of the data. As large network of computers carries the entire blockchain in order to restrict any individual to have control over it. This means that no one person can go back and change things.
Let’s take an example of buying train ticket. When you buy a train ticket through app or web you need to pay for processing the transaction (transaction processing fee). With blockchain, the entire ticket booking system can be moved into the block and the transaction facilitates between the railways and the passenger. So, you don’t have to pay for the credit card processing fee. The ticket for a certain train, or railway route acts as an individual block. The block which is ticket in this example transfers from the railways to the passenger and money is stored in its exchange. Thus, no transaction processing fee.
Benefits of Blockchain
Supply chain management: – With the Blockchain, movement of goods, their origin, quantity, etc. can be tracked, bringing a new level of transparency to B2B ecosystems.
Accounting: – Blockchain eliminates human error and protects the data from possible tampering. Records will be verified every single time whenever they passed from one blockchain node to the next.
Increased traceability: – The transactions stored in the blocks are contained in millions of computers participating in the chain. Hence it is decentralized. There is no possibility that the data if lost cannot be recovered.
Smart Contact: – With the smart contracts, the businesses can pre-set conditions on the blockchain. The automatic transactions are triggered only when the conditions are met.
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