A Blockchain is a database with two primary characteristics. Firstly, it is secure from manipulation because it uses a very elaborate encryption procedure (the hash function). Additionally, it distributes many copies throughout the overall data bank. An unauthorized party would need to change 51 % of all instances in order to successfully forge a data bank entry.
“The Blockchain is a digital bank statement for transactions between computers. It records every change and saves it decentralized and transparently on many different computers. This makes it impossible (or possible only with enormous efforts) to manipulate this information, which has already been verified.”
Blockchain is decentralized in nature. If the server in a traditional database fails, users can no longer work with the database. Yet with a Blockchain when one node fails, the remaining nodes stay intact. Consequently, users can keep working with the database.
Blockchain is an unchangeable, highly available, decentralized database. When participants write information in to it, encryption protects it from unauthorized access. As a result, this information becomes tamper-proof. Blockchain writes transactions in chronologically, forms blocks, and then closes them with a checksum. Each block contains the checksum of the previous block and the system creates and distributes many copies of them. Therefore, no central unit controls the chain.
In simple terms
- Decentralized – has a high level of availability
- Immutable – has a very high level of data integrity
- Transparent and traceable
- Highly hack-resistant
Types of Blockchain
Smart contracts are computer programs that facilitate, verify, execute and enforce the negotiation or performance of agreements using Blockchain technology. Once initiated, the smart contract will be executed autonomously when the agreed terms and conditions are met. Therefore, smart contracts can substitute traditional contracts. As smart contracts’ operations are performed on Blockchain, contract partners do not need to provide infrastructure themselves.
How can Blockchain be implemented practically?
Blockchain technology has gained fame as the technology behind cryptocurrencies (Bitcoin, Ethereum) and many companies working with the technology have remained in this realm. faizod, however, recognizes the far-reaching potential of the technology to disrupt and transform business processes in many industries.
We have developed Blockchain implementations for everyday business processes, for product production, and for logistics. We are also constantly working on exploratory research to find further applications for Blockchain.
In principle, anywhere where data is collected, Blockchain can be implemented to optimize databases making them highly available, transparent, traceable, and hack-resistant.