What Is Blockchain & How Does It Work
As the name suggests, blockchain is a chain contains different blocks set together. Each block contains 3 pieces of information:
- Previous blocks hash
Data Based on the use, the data that is securely stored in a block depends on the type of blockchain. For example, in the Ethereum blockchain, the data stored in the info relating to the transaction: the amount of money transferred and the data of the two people involved in the transaction.
Remember that a blockchain is an immutable, consecutive chain of records called Blocks. They can contain transaction details, data files or any punch of data you like, really. But the important thing is that theyre chained together using hashes.
Hash You can think of a hash as a digital fingerprint. It is used to identify a block and its data. Whats important about hashes is that its a unique alphanumeric code, usually about 64 characters. When a block is developed, so is its hash. When a block is modified, the hash is also modified. In this way, hashes are fundamental if you want to detect any changes made to the block.
Previous blocks hash By storing the hash of the previous block, you can see how each block is linked to form a blockchain! This is what makes a blockchain so secure.
Blockchain And Internal Audit
|Blockchain Basics & Cryptography, Gary Gensler, Massachusetts Institute of Technology, 0:30|
The need for internal audit to provide effective oversight of organizational efficiency will require a change in the way that information is accessed in new formats. Blockchain adoption requires a framework to identify the risk of exposure associated with transactions using blockchain. The Institute of Internal Auditors has identified the need for internal auditors to address this transformational technology. New methods are required to develop audit plans that identify threats and risks. The Internal Audit Foundation study, Blockchain and Internal Audit, assesses these factors. The American Institute of Certified Public Accountants has outlined new roles for auditors as a result of blockchain.
It’s A New Form Of Payment
The first thing a business can do to adopt blockchain technology is to simply accept cryptocurrency as a method of payment. What signals more of a commitment to blockchain than allowing customers to pay with bitcoin or other cryptocurrencies?
The rollout will require a lot of planning and testing, as traditional merchant services are not set up to accept bitcoin. As such, a small business will need to evaluate and spend money on a digital wallet, a merchant gateway or a combination of services needed to accept the cryptocurrency from customers.
There are a few benefits for organizations when they accept blockchain currencies. As a gesture, customers can see this form of payment as a willingness to expand your services. Cryptocurrencies also allow businesses to directly deal with the customer, which reduces transaction costs. Another big advantage of the blockchain is that payments are permanent and irreversible, leaving the customer with no choice but to contact the business directly if they want a refund. This helps address the issue of chargebacks, in which customers purchase a product but then cancel the payment with the credit card company, leaving the business on the hook.
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Social Blockchain App Development Ideas
Best Social Blockchain App
Efficient Management User Reputation
Recently Airbnb started experiments for using blockchain technology for managing user reputations. They are storing the information in a decentralized blockchain that frees up Airbnbs servers. The company is replying to reviews left by landlords as well as renters. Resultantly, the customers are able to judge how reliable the potential guests or hosts are.
Eager to create a new startup but lack the huge capital? The big task is convincing the venture capitalist of your reliability and resourcefulness. There is a Masachain blockchain app providing a way for collecting points from friends. When friends have a positive experience or feelings with you like gratitude, support, empathy, they award points. This way the venture capitalize is able to trust you better.
Security Token = Investment Contract
At its very essence, a security token is an investment contract which represents legal ownership of a physical or digital asset like real estate, ETFs, etc. This ownership must be verified within the blockchain.
After the ownership is verified, security token holders can:
- Trade away their tokens for other assets
- Use them as collateral for a loan
- Store them in different wallets
Having said that, the true value in security tokens lies in how they can completely redefine the meaning of ownership. They can democratize assets and distribute them among people all over the world. To give a very crude example, instead of owning a gold coin, which may be out of a lot of peoples budget, it is now possible for 100 people to hold fractions of that gold coin.
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Blockchains Effect On Business
Blockchain could have revolutionary implications for the future of business operations. From accounting to operations, the growing consensus among industry leaders is that its likely to impact every major area of work and the shift is already starting. In fact, blockchain has the potential to add $1.76 trillion to the global economy by 2030.1
The technology automatically tracks transactions from start to finish without having to consult a central authority tasked with preserving the transaction or encrypting the data, and without the need for human intervention. Instead, by compartmentalizing them, blockchain provides transparency around whats occurred in the history of the transactions. Moreover, because blockchain is unchangeable, this information is secure.2
This digital ledger allows innovators and disruptors to flip the script on typical organizational processes in various exciting ways. Take a look at some of the business applications:
Improving Financing Contracting And International Transactions
When inventory, information, and financial flows are shared among firms through a blockchain, significant gains in supply chain financing, contracting, and doing business internationally are possible.
Consider the matter of financing. Banks that provide working capital and trade credit to firms face a well-known problem of information asymmetry regarding a borrower firms business, the quality of its assets, and its liabilities. For example, a company might borrow money from several banks against the same asset, or request a loan for one purpose and then use it for another. Banks design their processes to control such risks, which increases transaction costs, slows down access to capital, and reduces the capital available to small firms. Such frictions are detrimental not only to banks but also to firms that need cheap working capital.
Another activity ripe for improvement is accounts payable management, an elaborate process that involves invoicing, reconciling invoices against purchase orders, keeping track of terms and payments, and conducting reviews and approvals at each step. Even though ERP systems have automated many of these steps, considerable manual intervention is still needed. And since neither of the transacting firms has complete information, conflicts often arise.
A counterfeit can be traced to its source using the blockchain trail.
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What Is Blockchain Technology Used For
What sets blockchain apart from a typical database is the way the data is structured. With blockchain, the information is collected together in groups, referred to as blocks holding sets of information. These blocks have storage capacity and once filled, they are closed and then linked to the previously filled blocks, creating a chain of data, which is known as blockchain. The new information following the freshly added block gets compiled into a newly formed block which is then added to the chain when it is filled.
In a database, the data is structured into tables, while a blockchain structures its data into blocks which are then put together. This kind of data structure creates an irreversible data timeline when it is implemented in a decentralized manner. As the block is filled, it is then set in stone, from where it becomes an essential part of this timeline. Each and every block of this chain has been given an exact timestamp as added to the chain.
Blockchain And Bitcoin Are Not The Same
Many people assume that blockchain and bitcoin are the same. Blockchain is the underlying technology of Bitcoin. They are closely related, but they are not the same thing.
In 2008, Bitcoin was introduced as a type of unregulated digital currency created by the pseudonymous Satoshi Nakamoto. Blockchain was the ledger solution used to securely record facilitating the use of this new currency since there was no bank or government involved to monitor or police the transactions. As such Bitcoin can actually be considered as the first use case leveraging blockchain technology. The confusion between blockchain and bitcoin often arises because these two concepts were introduced at the same time.
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Level Up Your Supply Chain Management
One of the greatest challenges facing manufacturers today is the increasingly complex and opaque global supply chain. A single iPhone has dozens of components manufactured around the world. It could have a Bosch accelerometer made in Taiwan, an audio chip made in Singapore, and a battery manufactured in China.
This makes it very difficult for brands to know exactly where their products originate, opening the door to illegal and unethical practices. It also means that companies have a hard time maintaining a record of products and locating those that get lost along the way. Blockchain is already solving these issues, with companies like Walmart, Nestlé, and Tyson getting on board.
Creating new supplier categories and finding qualified vendors within each category is an onerous process, explains Chainyard, a blockchain consulting company. With blockchain, however, you can easily access supplier records, information from government agencies and insurers, and prior verifications completed by trusted parties, all in one place. Because blockchain is essentially a decentralized digital ledger, it can be used for tracking, agreements, and secure payment. Blockchain works to eliminate supply chain disputes because every supplier and producer can view the chain of ownership on the exact same ledger.
Analyze The Options Available
There are a few ways to create a blockchain app from a technical standpoint, they are:
- Using an open blockchain for the app, for instance, consider integrating Ethereum/Bitcoin into the mobile solution.
- Build A Private Network Using Blockchain Software.
- Pick a Blockchain-as-a-Service provider and use that cloud service in your blockchain app. BaaS products are commonly offered by Microsoft, Azure, and Amazon.
- Create A Blockchain Network On A Suitable Platform.
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Examples Of Industries That Benefit From Using Blockchain
Blockchain’s benefits span industry sectors, but some sectors and enterprises are better suited to this technology than others. Businesses that are decentralized by definition, have multiple parties that need access to the same data and need a better way to ensure that data has not been tampered with are piloting programs or brought test cases to full production. The following are a few examples of industries benefiting from blockchain.
- Financial institutions — and their customers — are seeing faster and less-costly clearing and settlement.
- Healthcare entities are finding that blockchain can ensure the security of patient records and to maintain patient privacy while also enabling the ability to share a patient’s data only as the patient allows.
- Nonprofits and government agencies have adopted smart contracts and other blockchain-based applications to create immutable records that enforce stipulated terms.
Transport Blockchain App Development Ideas
Best Transport Blockchain App
Pay Driver-less Car Parking Fees
The trend of drive-less cars is soon going to pick up, however that is not to say that the car without a driver will enjoy free parking. Parking fees would need to be paid here as well. These driver-less cars lack the traditional bank account, however, with blockchain they can have one. The Car Wallet app notifies the car when the money is deposited into the app wallet. Then the user can open the car door, authorize the start of the engine, and pay parking fees.
Upon ordering a product online, you can track the details of product status. All these details are high-level information on the main locations such as collection centers and airport transport. Hence, the exact location details cant be known. And in case the centralized system somehow fails then it will cause quite chaos. To deal with this issue, there is XYO Network introducing the location data that comes from several interconnected devices, which are proficient at delivering data that then needs to be executed by smart contracts. The industries that require location data for them the use cases are quite useful. Like, e-commerce might need to deliver some packages via drones, the car rental firm needs to find lost keys or the airlines require locating lost bags. These tasks are only possible when the trust in location data is solved.
Rent the parking space
Rent your Car
Lesser Paperwork in Shipping
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How Our Blockchain Specialists Can Help You
Is blockchain the solution to your business challenge? Could it be the key to the big idea that moves your business to the next level?
We follow a four-step process. We assess your needs and determine whether blockchain technology can add value. Then we collaborate with you on a plan to meet those goals. Well be with you on the implementation journey to turn your plan into reality. And finally, well be there after project delivery to support business change.
Do the situations below apply to your organisation? If your answer is yes for four or more, blockchain could be an effective solution for you.
1. Multiple parties share data
Multiple participants need views of common information.
2. Multiple parties update data
Multiple participants take actions that change the data and need to be recorded.
3. Requirement for verification
How Much Does It Cost To Build A Blockchain Platform/ Application
The cost of blockchain projects differs depending on what you want to need. Usually, there can be two kinds of blockchain projects, as follows:
- Creating a Distributed App using a public blockchain network
- Developing an enterprise blockchain for your company.
If you are creating a decentralized business model where you will enable Peer to peer transactions using cryptocurrencies, you will most likely build a DApp.
The cost of blockchain app development also based on the following factors:
- Type of Blockchain App you require for your business
- The complexity of a Blockchain Project
- People involved in developing an app
- Project Management Tools
- Third-Party Tool Subscription Costs
The cost of a blockchain platform or application varies from industry to industry. For example, you may require an app for Education, supply chain management, healthcare, real estate, education, and many other business domains. The cost of an app will depend on the complexity of the project.
The complexity of a Blockchain Project
The complexity of a blockchain project depends on the issues that an application wants to solve.
Here are some examples of blockchain projects based on the complexity level:
Low Complexity Blockchain Apps: Multi gateway Payment apps, Smart Contracts Development App and more
Medium Complexity Blockchain Apps: Decentralized Apps built on various blockchain platforms, Semi-decentralized apps, Hybrid blockchain applications, Blockchain dApps
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Healthcare Blockchain App Development Ideas
Best Healthcare Blockchain App
- Nebula Genomics
No worry about Fake Medicine
The concept of fake medicine is quite rampant at the moment and often people wonder how to exactly find whether the medicine is genuine or not. However, blockchain technology might have a solution to this issue There is an app named Blockverify that allows to track the pharmaceuticals throughout the supply chain. It ensures that the consumers are receiving an authentic product.
Medical Records Security
There are certain limitations that nurses, doctors, and healthcare professionals face in the level of care that can be provided. And the reason for the same is the being unable to view accurate and complete health records of the patients. With the blockchain apps in healthcare, it is now possible to publish medical records safely on the blockchain. That way the authorized person can have access to the records from anywhere across the world. The Government of Estonia has collaborated with a company Guardtime, which is a blockchain technology company, for building a blockchain of citizens health records. This allows the citizens to carry the ID credentials for unlocking access to the records in real-time.
What Does It Mean For Entrepreneurs
Several major corporations are investing in blockchain, including Microsoft, IBM , Unilever and Toyota. But blockchains wont impact just large corporations your company may be affected in the not-too-distant future.
If youre in the business of verifying transactions of any kind, investigate how blockchain could impact your company. Just consider the threat to the business of clearing and settling stock trades to see that the disruption to many back-office functions and other services could be substantial.
Assuming you belong to some sort of supply chain, your partners may ask you to start digitally tracking your processes. Especially if youre a supplier to large companies, start thinking about where you fit into your customers supply chains and how you might be asked to participate in a blockchain.
If youre a supplier to either consumers or other businesses, could you benefit from tracing your products back to their source? Think of the premium prices that a fishmonger selling guaranteed sustainable tuna might be able to charge.
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Pros And Cons Of Blockchain
For all of its complexity, blockchains potential as a decentralized form of record keeping is almost without limit. From greater user privacy and heightened security to lower processing fees and fewer errors, blockchain technology may very well see applications beyond those outlined above. But there are also some disadvantages.
Improved accuracy by removing human involvement in verification
Cost reductions by eliminating third-party verification
Transactions are secure, private, and efficient
Provides a banking alternative and a way to secure personal information for citizens of countries with unstable or underdeveloped governments
Significant technology cost associated with mining bitcoin
Low transactions per second
History of use in illicit activities, such as on the dark web
Regulation varies by jurisdiction and remains uncertain
Data storage limitations