Blockchain basics

 Blockchain is a continuously growing list of records which are linked and secured using cryptography.For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.

Why Block chain

Companies/parties today keep track of records of all transactions between all the parties that the business interacts and update as and when needed. this process is inefficient because 

• duplication of information with all the parties to update the ledger
• less transparent 
• less trusted transactions as data owned by one party and cant be guaranteed to be true.
• error-prone

The solution is to use distributed, secure, transparent and shared ledger - Block chain

• A shared ledger technology
• transparent transaction as all parties are involved/informed
• immutable chain - only appended

point to note  - Blockchain is still an emerging technology. Business owners need to start small and then look for more ways to grow and expand the use of blockchain networks.

How block chain applied to business network

Assets are classified into tangible(land, properties), intangible(Cash, loan). 

• The transaction records of assets are kept in the form of distributed ledgers(block chain).
• Flow of assets/transaction is governed by contract.

This assets can be tracked using this distributed ledger for transparency and maintain only single copy which is shared/endorsed by all party involved hence trusted.

You can see the life cycle of an asset

Blockchain in business 

Blockchain for business provide  - secure, shared ledger which one single record which is accessible for all party involved hence transparent. Business networks prioritize identity over anonymity. Assets are more diverse and important in a business network. A business network gets to choose who validates a transaction.

• All the member of business network share the common ledger on block chain. 

• Ledgers are replicated. 

• all member involved can view the transaction but only authorized members can update the transaction. 

The requirements for a blockchain for business are a shared ledger, smart contract, privacy, and trust.

1. shared ledgers

2. privacy services(who can see what and update the information)

3. Trust - transaction are endorsed by relevant participants 

4.    4. Contract - common/shared business process.

        For example, for financial services network, a business network that runs on a blockchain can speed up transaction processes and audits. That in turn reduces costs and can lead to greater customer satisfaction. A business that runs a supply chain network can benefit from blockchain by reducing errors in shipments, have better tracking or materials, and reduce the risk of illicit tampering of records.

Blockchain for business has several advantages:

• Saves time
• Removes cost
• Reduces risk
• Increases trust

Use cases of block chain

1. Reference data

2. Supply Chain

3. Trades(Diamond life cycle)

blockchain and bitcoin

Bitcoin is an unregulated shadow-currency and was the first popular blockchain application. The Bitcoin application works in an anonymous network, so no one knows who the participants are.

Bitcoin blockchain is protected by the massive group mining effort. It's unlikely that any private blockchain will try to protect records using gigawatts of computing power — it's time consuming and expensive