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Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.
An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.
Business runs on information. The faster information is received and the more accurate it is, the better. Blockchain is ideal for delivering that information because it provides immediate, shared, and observable information that is stored on an immutable ledger that only permissioned network members can access. A blockchain network can track orders, payments, accounts, production and much more. And because members share a single view of the truth, you can see all details of a transaction end to end, giving you greater confidence, and new efficiencies and opportunities.
What needs to change: Operations often waste effort on duplicate record keeping and third-party validations. Record-keeping systems can be vulnerable to fraud and cyberattacks. Limited transparency can slow data verification. And with the arrival of IoT, transaction volumes have exploded. All of this slows business, drains the bottom line, and means that we need a better way. Enter blockchain.
With blockchain, as a member of a members-only network, you can rest assured that you are receiving accurate and timely data. And that your confidential blockchain records are shared only with network members to whom you granted access.
Consensus on data accuracy is required from all network members, and all validated transactions are immutable because they are recorded permanently. No one, not even a system administrator, can delete a transaction.
With a distributed ledger that is shared among members of a network, time-wasting record reconciliations are eliminated. And to speed transactions, a set of rules that are called a smart contract can be stored on the blockchain and run automatically.
A public blockchain is one that anyone can join and participate in, such as Bitcoin. Drawbacks might include the substantial computational power that is required, little or no privacy for transactions, and weak security. These are important considerations for enterprise use cases of blockchain.
A private blockchain network, similar to a public blockchain network, is a decentralized peer-to-peer network. However, one organization governs the network, controlling who is allowed to participate, run a consensus protocol and maintain the shared ledger. Depending on the use case, this can significantly boost trust and confidence between participants. A private blockchain can be run behind a corporate firewall and even be hosted on premises.
Businesses who set up a private blockchain will generally set up a permissioned blockchain network. It is important to note that public blockchain networks can also be permissioned. This places restrictions on who is allowed to participate in the network and in what transactions. Participants need to obtain an invitation or permission to join.
Multiple organizations can share the responsibilities of maintaining a blockchain. These preselected organizations determine who submit transactions or access the data. A consortium blockchain is ideal for business when all participants need to be permissioned and have a shared responsibility for the blockchain.
Blockchain has been crucial for improving efficiency, transparency, and security across industries. They enhance supply chain traceability, streamline financial transactions, protect intellectual property, and secure digital identities, creating more reliable and transparent systems.
Blockchain enhances supply chain management by providing transparent, tamper-proof records of goods from production to delivery. It helps eliminate bottlenecks, reduce paperwork, prevent unethical sourcing, and track materials efficiently. Companies like Maersk and Fr8 use blockchain for end-to-end tracking, increasing real-time visibility and improving logistics.
In banking, blockchain automates transaction processing, reduces labor, and protects sensitive data. Financial institutions can leverage decentralized ledgers to enhance transaction transparency, streamline operations, and support cryptocurrencies as digital assets, helping institutions evolve in the digital age.
Blockchain’s immutable records are ideal for safeguarding intellectual property (IP). Non-fungible tokens (NFTs) ensure digital ownership of unique assets like artwork, offering creators long-term protection and proof of ownership, while also fostering a secure environment for digital IP transactions.
Blockchain technology offers robust solutions for personal data protection, minimizing data breaches and ensuring privacy. Through encrypted digital identities and decentralized systems, blockchain allows individuals, including displaced persons, to securely manage their credentials, enhancing privacy and providing greater control over personal information.
