Blockchain definition: Blockchain is a shared and immutable ledger that allows for the recording of transactions and tracking assets within a business network. A tangible asset could be a house, car or cash. Or it could be intangible such as intellectual property, patents, copyrights and branding. A blockchain network allows anyone to track and trade virtually any value, which reduces risk and cuts costs.
Why blockchain is important: Information is the lifeblood of any business. It’s important to receive information quickly and accurately. Because it allows for immediate, shared and transparent information storage on an immutable ledger that is only accessible by authorized network members, blockchain is ideal for providing that information. Blockchain networks can track orders and payments, as well as production. Because members share one view of the truth you can see every detail of each transaction from beginning to end. This gives you more confidence and opens up new opportunities.
The key elements of a Blockchain
Distributed ledger technology
The distributed ledger is available to all network members and contains an immutable record that records transactions. This shared ledger eliminates the need to record transactions multiple times, which is typical for traditional business networks.
Permanent records
After a transaction has been recorded to the shared leadger, no participant can alter or tamper. A transaction record that contains an error must be rewritten to correct it. Both transactions will then be visible.
Smart contracts
A set of rules, known as a smart contract, is stored on the blockchain to speed up transactions and can be executed automatically. Smart contracts can be used to define terms and conditions for corporate bond transfers as well as travel insurance terms.
Blockchain: How it works
Each transaction is recorded as a “block of data”
These transactions are used to show movement of assets that could be tangible (a product), or intangible(intellectual). You can choose to record information in the data block: who, what and when.
Each block is connected with the one before it and the ones after it
As an asset moves from one place to another or the ownership changes, these blocks create a chain of data. These blocks verify the time and sequence of transactions and link securely together to ensure that no block is altered or added between blocks.
Transactions are locked together in an irreversible chain called a blockchain.
Each block adds to the verifiability of the block before it, and the whole blockchain. This makes the blockchain impervious to tampering and gives it the crucial strength of immutability. This eliminates the possibility that a malicious actor could tamper with the blockchain and creates a trusted ledger of transactions.
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