Using Blockchain Technology to Transform Supply Chain Transparency
Blockchain Explained
Blockchain is a distributed database of records or blocks that are linked together electronically in a digital format amongst the nodes of a computer network.
Blockchain and cryptocurrencies stem from similar origins, and is most commonly associated with Bitcoin as it the system served as a means to maintain a secure and decentralized record of transactions enabling decentralized peer to peer financial service through digital channels.
The technology is transparency and security has led to a growing adoption over time. Notably, in 2013, developer published a white paper that proposed a platform combining traditional blockchain functionality through the execution of computer code. This sparked the Ethereum Project, an open source system with smart contract functionality a collection of code, or functions, and data that resides at a specific address on the Ethereum blockchain. This enables users to develop new programs that communicate with each other across the blockchain.
Also known as distributed ledger technology, each block contains a cryptographic record of the previous block, a timestamp, and transaction data. These blocks form a chain because they each contain information from the prior block, with each additional block fortifying the ones before it in chronological order. Consequently, blockchains are resistant to the modification of their data because, once recorded, the data in any given block cannot be altered without amending all subsequent blocks.
In process, when a transaction is entered the data is transmitted to a network of decentralized peer to peer computers across the world. This network then uses equations that validate transactions which are then blocked together and added to the chain, creating a permanent history of prior transactions.
Consequently, blockchain serves the foundation for immutable electronic ledgers, or records of transactions that cannot be altered, deleted or destroyed. This alleviates the concerns of a siloed database that can be subject to destruction or corruption.
Different Types of Blockchain:
Public blockchain networks can be joined by anyone. Public blockchains help to eliminate challenges like as security flaws and centralization. A consensus algorithm is used to verify information authenticity. Yet, Public blockchains are not without shortcomings as the system requires substantial computing power, little or no privacy for transactions, and weak security beyond was is already offered through the blockchain system.
Private blockchain networks are similar to a public blockchain and still operate using a decentralized peer to peer network. However, one organization governs the network, controlling who is allowed to participate and executing consensus protocols and maintaining the shared ledger. Private blockchains often work well for private businesses or organizations since they can be run behind a corporate firewall and even be hosted on premises.
Permissioned blockchain networks, alternatively known as hybrid blockchain, offer a private network that allows for access permissions to be extend to authorize individuals. Offering some of the best features of public and private networks, this system enables better structure when assigning who can participate in the network and what transactions they can access.
Consortium Blockchain similar to permissioned blockchains, this allows multiple organizations to share network maintenance responsibilities. This network offers the components of both public and private components, with the exception that multiple organizations will manage a single consortium blockchain network. Organizations are selected in advance, determining who may submit transactions or access data. This option is ideal for businesses where participants require permissions and shared responsibility.