Evolution of Blockchain Technology
Discuss about the Contemporary Issues in Digital and Business Technologies.
Digital currencies have evolved into practice with the beginning of 21st century. Blockchain is a similar technology which is a continuously growing record called blocks that are secured and linked with cryptography (Swan, 2015). Each block has a cryptographic hash of the last block, transaction data and a timestamp. Data becomes inherently resistant to modification by designing a block chain. It is a distributed ledger which is open and can record transactions among two different parties efficiently and in a permanent and verifiable manner. For utilising distributed ledger, a blockchain is typically managed by the peer-peer network that as a whole gets adhered to a protocol for internode communication and authenticating new blocks. When a data is recorded once in a provided block then it cannot be changed retroactively without the changes of all the subsequent blocks that need collusion of the network majority. With a high Byzantine fault tolerance, block chain exemplifies a computing network that is distributed.
A consensus has therefore being achieved through a blockchain and this is the reason why it is more suitable for recording of medical records or events or other activities of records management. Some of the common examples are transaction processing, food traceability, identity management, voting or documenting provenance etc. It was invented in 2008 by Japanese scientist Satoshi Nakamoto for utilising it in crypto currency bitcoin as its public transaction ledger (Zyskind and Nathan, 2015). With the invention of Block chain it was the first digital currency that solves the double spacing.
Block chain technology came into existence from the emergence of bitcoin from the year 2009 when a revolutionary paper by Satoshi Nakamoto was produced. Actually the work four year back when Hal Finney produced the concept of “reusable proofs of work” a system that utilised ideas from b-money along with computationally difficult Hashcash puzzles by Adam Back to generate the concept for a crypto currency. It was running on the centralised trusted backend system. Till the year 2017 it has become one of the most widely used cryptocurrency. In 2014 bitcoin block chain file size reached 20GB, which reached to 30 GB in 2015. In 2016-17 it reached to 50GB to 100G. Blockchain 2.0 has many kinds of new applications where the users can exchange values without powerful intermediaries acting as arbiters of information and money (Tapscott and Tapscott, 2016).
The major purpose of the blockchain technology is to create a secure digital identity reference. The major thing behind the development of blockchain was to provide peer to peer electronic cash system that helps in enabling online cyrptocurrency payments (Pilkington, 2016). Since there were many lags in the online electronic systems hence this technology provided a proper framework where the data related to transfer became more secured. Another purpose of this technology development was to eliminate the middle regulatory authority and the transaction is between the two parties. Apart from this there was a very harsh need to have a secured data system as well as transparency in the maintenance of records.
There are several ways in which block chain is utilised in various industries. From industry to industry the use of Block chain varies. Without a central authority Blockchains stores data immutable and decentral. The financial and other associated industries already understand the cited technology’s disruptive potential and its application.
- Finance: In the financial industry, blockchain technology has many use cases that includes restructuring the costly legacy workflows, free up capital and progressing liquidity. Blockchain was utilised for enhancing transparency, decreasing infrastructural cost, reduction in frauds (Vigna and Casey, 2016). It also increases settlement times and execution.
- Retail and manufacturing: Better supply chain management, digital currencies and contract platforms are provided by immense technology can give the retail and manufacturing industries. It also provides cyber security options. Like processors, distributors, customers, growers, regulators, retailers may potentially attain permissioned access regarding the beginning and food product’s state in their transactions and may easily trace out the contaminated foods to their source.
- Healthcare industry: This technology helps the consumers may certainly allow people to have access to their records related to healthcare. It allows people to retract or access a person from their healthcare records and certainly may have all the data anchored, secured and encrypted on blockchain. By utilising this technology can even remove third party verifiers like exchanges of health information directly linking records of patients to financial and medical patrons (Iansiti and Lakhani, 2017). It provides security to the medical records using healthcare administration.
- Government sector: In the governmental sector, blockchain technology must increase the traceability and transparency of how currency is spent in governmental sector. It must even track asset registration such as lessen fraud, vehicle and cost of operations. With the increasing case of corruption in the government blockchain technology can help in reducing such chances.
As it can be seen from the above that for different industries the use of blockchain technology differs so it can be said that it is highly beneficial. Since data is converting into gold these days hence this technology needs to be upgrades so as to enhance the scope of its usability.
There is larger number of benefits that is added by the technology. There are many kinds of value or contribution that is added by this technology. The long range contribution of this technology helps every stakeholder in some or the other way. They add value in following ways:
- Immutability: Making records and data unavailable at any central location can make it difficult for the hackers to tamper with the data in any way. Since there is no location on which data is stored hence making changes in them is not possible (Underwood, 2016).
- Security: There is no centralised data hence it is not possible that any kind of security breach can be possible. Since there is no centralised system like the traditional servers hence it is difficult to influence the system with malicious content. There is no single server that is storing a data rather a series of servers at different locations have blockchains. With the increasing number of nodes, more copies of a single data gets created hence if anybody wants to tamper with data they will have to contaminate all the servers or attack all the nodes. It adds value in the way that a more secured data network is created where a certain amount of data gets stored and when it gets filled then it is encrypted and sealed forever. Hacking all the nodes is not only impossible but it is also very costly. The most interesting fact is that all the nodes have different algorithms and security measures to provide more security (Crosby, et al., 2016).
- Redundancy: There are large numbers of copies generated in various parts of the world hence if data at one place gets lost then also there is one copy available at other places which are a relief for the shareholders (Walport, 2016).
- Overhead/cost reduction: Having such a large number of nodes to maintain this ledger allows companies to offset and offload hosting, security and maintenance costs. It eliminates a lot of costing of staffs of IT firms, infrastructural overhead and Dev Ops.
- Accountability/ Transparency: It brings transparency in the business as it helps in making sure that whatever is logged or deployed on the blockchain is true and accurate (Hackernoon, 2018).
All these points illustrate the value that is added by the cited technology to the business of the firm.
Conclusion
From the above report it can be concluded that Blockchain is a technology that helps in making the data highly secured. This actually came into use with bitcoin. Since the data is stored at multiple nodes hence it is highly secured and the chances of data loss are less. There are many industries that are taking use of this technology as per their requirements. This technology adds value to then comoany in many ways due to higher security of the network.
References
Crosby, M., Pattanayak, P., Verma, S. and Kalyanaraman, V., (2016). Blockchain technology: Beyond bitcoin. Applied Innovation, 2, pp.6-10.
Hackernoon, (2018). Why use the blockchain instead of a database? What gives token value? [Online]. Available at: https://hackernoon.com/why-use-the-blockchain-instead-of-a-database-what-gives-tokens-value-263449681153. [Accessed On: 15 April 2018].
Iansiti, M. and Lakhani, K.R., (2017). The truth about blockchain. Harvard Business Review, 95(1), pp.118-127.
Pilkington, M., (2016). 11 Blockchain technology: principles and applications. Research handbook on digital transformations, p.225.
Swan, M., (2015). Blockchain: Blueprint for a new economy. ” O’Reilly Media, Inc.”.
Tapscott, D. and Tapscott, A., (2016). Blockchain revolution: how the technology behind bitcoin is changing money, business, and the world. Penguin.
Underwood, S., (2016). Blockchain beyond bitcoin. Communications of the ACM, 59(11), pp.15-17.
Vigna, P. and Casey, M.J., (2016). The age of cryptocurrency: how bitcoin and the blockchain are challenging the global economic order. Macmillan.
Walport, M.G.C.S.A., (2016). Distributed ledger technology: Beyond blockchain. UK Government Office for Science.
Zyskind, G. and Nathan, O., (2015), May. Decentralizing privacy: Using blockchain to protect personal data. In Security and Privacy Workshops (SPW), 2015 IEEE (pp. 180-184). IEEE.
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