There have been many headlines, Press releases on cryptocurrencies. Why is everybody talking about it? I will attempt to look at the subject from the standpoint of technology transformation with a view to transition from the known to unknown.
For starters, this is about the potential of the underlying technology, and not specifically the technology that underlies bitcoin, but the general principle for what you can do with it.
When you look at some of the characteristics of where things are going in terms of how business is being done, how customers relate to the companies from whom they’re purchasing, with whom they’re interacting, we’re looking at multi-stakeholder relationships, we’re looking at dynamic ecosystems that are replacing existing ways of doing business.
And, of course, we’re also in an environment where any product, service, and customer lifecycle has to be really efficient, really robust, as well as secure, simply because that’s what customers are expecting.
And, of course, interacting any time, any place, device of my choice, and all of that. And that actually calls for new ways of doing business, new ways of establishing trust, new ways of interacting to support those dynamic ecosystems.
And that’s where blockchain technology comes in because it provides the potential of just developing new business and trust models.
So, in the concept of dynamic ecosystems, blockchain is really a part about trust, meaning I have a clear view of who the entity is; I’m able to transact with them efficiently with trust, and do that, and sort of align my processes so that I can quickly stand up a virtual ecosystem, bring it down, and trade quite easily among partners.
Whether I’m trading in the financial sense or cryptocurrency sense, IP rights, or whatever it might be that is of value among people or companies. Is that a fair statement?
We define a blockchain as a store of records with the following characteristics. It’s write-once, append-only, it’s cryptographically secured using, but it’s not by default encrypted. That’s important to understand because that causes a few issues down the line because transparency is not always a good thing for data.
It’s distributed and either completely or partially replicated, meaning many different companies have a copy of this database. And in it’s pure form, it’s also decentralized, meaning it’s not controlled by any single one party.
Blockchain itself is a data structure, and its data can be stored either in a file or a database. It is an ordered linked list of blocks of transactions, where each subsequent block maintains a link (hash) of the previous (parent) block.
Each block in the chain has a unique hash, which is computed by the node on the basis of contents of the block.
The block consists of a header and data about transactions. For the set of transactions in a block, hash values are generated and stored in a root for the block.
If the contents of a block change even by a bit, the hash value of the block changes. When new transactions are digitally signed, and submitted in the network, there are special nodes called miners, which confirm the validity of the transactions, bundle them in a block, and add it to the blockchain.
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Note: The results are not exact but very close to the actual.
