The term “blockchain” is becoming ever more common in discussions about business IT strategies across multiple industries.
Many enterprise businesses are now looking to use the blockchain, the technology most commonly associated with the digital currency Bitcoin. Although well-established as a vital element of cryptocurrencies, the blockchain can be used for many other purposes too.
Recently, massive corporations like the food giant Walmart have announced projects involving the technology. In collaboration with IBM, Walmart has implemented blockchain technology to reduce food waste, improve contamination management, security and transparency.
But what exactly is the blockchain?
Put simply; the blockchain is a peer-to-peer network combined with a time stamping server. This means every digital record transmitted across the blockchain receives a unique timestamp that can’t be edited or deleted.
What’s more, the network is autonomous and requires no administration as each user, and each entry is self-administrating. Although difficult to summarize in just a few lines, the following bullet points should give you a relatively good understanding:
Four steps to understanding the blockchain
In essence, the blockchain is about the decentralization of data – removing the reliance on a single storage unit and replacing it with a network of nodes. Instead of a single source of truth, the blockchain includes a network of multiple, identical sources that only legitimize an action after reaching consensus.
Not all blockchain projects are the same. Some emphasize security but lack transparency, other might focus on efficiency.
Blockchain technology can offer the following benefits, but it’s up to organizations how, or if, they decide to implement them:
1. Transparency – The blockchain is open to scrutiny. Anyone using it can trace the history of a transaction, whenever they want.
2. Integrity – Only when network consensus is achieved can a transaction take place. There is no way for users to operate independently.
3. Efficiency – There is no need for manual verification or third-party input. The blockchain is immutable.
4. Security – Each link in the blockchain is hashed. This means the technology is unamendable as the computing power and effort needed to unencrypt each link outweighs the benefits.
Of course, the blockchain is best known as the mechanism used to facilitate cryptocurrencies, but it has many other uses besides. Numerous areas including supply chains, transport, taxation, energy, wildlife protection and more, use the blockchain.
Shell, Vodaphone, and Toyota have all enlisted the help of tech firm Applied Blockchain to implement blockchain strategies. While in another example of blockchain technology, the US Food and Drug Administration and IBM’s Watson Health have teamed up to create a secure patient data exchange.
But how can this technology work in an enterprise business environment?
The blockchain and cloud storage
Cloud storage for Blockchain is currently in the BETA stages of development.
The concept is simple. Instead of renting space on a single server for storage, data is stored on a peer-to-peer network of storage devices. Users can rent out unused hard drive space as “storage space”. Data is shared across the blockchain in a similar way that peer-to-peer technology works. Subsequently, the savings are vast, with data costing as little as 50 cents a gigabyte.
One advantage of this system is security, as data is shared across hundreds of devices and not stored in a single place.
As a result, this data is almost impossible to access unless a user’s encrypted access keys are compromised. What’s more, the strict security protocols used are very similar to those of Bitcoin.
As the roots of blockchain are in Bitcoin, the technology can be readily applied to a payroll system. An excellent example of this is for international payments. If a business employs a global workforce, the use of a Blockchain system can significantly reduce the costs of payments.
By removing the costs of international bank transfers, businesses can save vast amounts of money. Right now, transfers using Bitcoin are a fraction of the cost of traditional banking.
It’s hardly surprising that the Bank of England is currently investigating ways of utilizing the Blockchain for payments and clearing.
At the speed Blockchain is developing it won’t be long before enterprise businesses embrace the power of this technology. Even in its purest form, collecting and sharing data across a single network, the scope for this technology is vast.
A price comparison website, like Trip Seats, can expand on its offer while reducing overheads and reliance on server space.
The future is in the Blockchain.