Thanks to Prerit Shah for contributing this article!

In an ordinary business network, tangible or intangible assets change ownership through markets. Transactions are usually recorded in each party’s ledger. It is generally not possible to check that two people’s ledgers match, because no one wants to show everyone a full list of their assets and transactions.

Blockchain aims to solve this by giving everyone in the network a copy of a ledger showing every transaction. This is designed to remove ambiguity and prevent fraud: everyone can verify that a transaction took place, under encryption to protect privacy.

Why Blockchain?

If you’re wondering why people use blockchain, you need to understand  its application in the business context. Businesses never work in isolation and connectivity benefits business networks of customers, suppliers, etc. In fact, these networks tend to cross geographical and regulatory boundaries. 

The complicated system of business networks, however, has two key problems. First, let’s say two people – Peter and Kevin – are doing business together. If Peter wants to tally the transaction that he has logged in his ledger with the transaction that Kevin has logged in his ledger, he won’t be able to because Kevin would not be comfortable showing all the asset logs to Peter. Second, in much the same way, verifying any contracts can be an issue, leading to exhausting legal disputes.

Blockchain serves as a solution to these problems by allowing transactions to be shared with the participants in a business network. Blockchain is a shared, replicated ledger with smart contracts. It is a ledger that logs each transaction, but it is shared with each participant so that the logs of transactions are always identical. It is replicated; every participant retains a copy to avoid any single points of failure. Smart contracts through blockchain provide a shared set of rules associated with each transaction while offering the ability to remove ambiguity and friction from trade.

Three Pillars of Blockchain Technology

1. Decentralization

Traditionally, centralized systems stored all the user information in one place. This is easier to keep track of the information you need. But it makes the information an easy target for potential hacks. It also requires downtime if the system needs maintenance or a software update. And if the system ever shuts down or gets corrupted, all the data can be lost.

Blockchain provides a decentralized system where everyone in the network owns the information. This also takes out any costs related to third-party interference.

2. Transparency

Transparency means that the flow of assets would be visible to everyone in the network. But it maintains privacy. It does not share identity of the participants. If Peter sent 1 Bitcoin to Kevin, the transaction appearing in the ledger would be something like:

“1MF1bhsFLkBzzz9vpFYEmvwT2TbyCt7NZ sent 1 BTC to
9vpFYEmvwT2TbyCt7NZJ1MF1bhsFLkBzzz”

That long string of gibberish cannot be traced back to Kevin or Peter. If you write someone a check, their bank has to confirm with your bank that you have enough money. The blockchain can do it anonymously.

But cryptocurrencies are just one aspect of Blockchain technology. This kind of transparency can preserve a secure record of transactions in any field. It could be a supply chain saying that one company filled an order placed by another. Or it could be in real estate, tracking ownership of some plot of land. Without blockchain, there are whole government offices devoted to this.

3. Immutability

Immutablilty means that once something has been logged in the ledger, it cannot be changed.

Blockchain uses complex hashing algorithms to store information. These algorithms create strings with the same size, no matter how minor or major changes in the data. Bitcoin, for example, uses SHA-256 which creates strings 256 bits long. 

Even if a minimal change in the data would change the hash drastically. The change would appear in all the chain blocks and completely change the chain. This property is known as the “Avalanche Effect.” This is how Blockchain attains immutability.

If someone wanted to add a fake transaction, they would have to find some other data that creates the same 256-bit string. This is not literally impossible, but there is no known way to do it even with the world’s best supercomputers. You can assume that any transaction recorded in the blockchain did really happen.

Uses of Blockchain and Future Scope

The blockchain can cut out the middleman in almost any service model. Currently, finance offers the most use cases. Blockchain GUI devised applications called “wallets” are used to buy things with Bitcoins and to store cryptocurrencies.

Online transactions and identity management technologies are closely related to each other. The blockchain is already used in transactions, so it is safe to assume that it will be used in applications of identity management. The Blockchain is also developing in industries like real estate, education, and health.

Career Opportunities in Blockchain

New technology often brings new jobs. Blockchain is no exception. Common job positions include:

  • Developer
  • Project manager
  • User interface designers
  • Quality engineers
  • Legal consultants

Resources

Mentors

Aaquish Sidhik
Aaquish Sidhik
Data Analyst | Mechanical Engineer
AdeWale Omoniyi
AdeWale Omoniyi
High-Tech Business Development
Ajinkya Bawaskar
Ajinkya Bawaskar
Computer Science
Akash Sharma
Akash Sharma
Computer Science | Cyber Security
Amit Sur
Amit Sur
Performance Engineer
Amitabh Yadav
Amitabh Yadav
Electronics & Computer Engineer | Physicist
Chaitra Pai
Chaitra Pai
Software Developer
Charlie Ciancolo
Charlie Ciancolo
Project Strategist | UX/UI Designer
Chiranjit Paul
Chiranjit Paul
Strategic Leader | Business | Computer Science
Cydel Giraudel
Cydel Giraudel
Business Development Associate
Darlington Simeon
Darlington Simeon
Software Engineer | UI-UX Designer
Hamza Khalid
Hamza Khalid
AI Research Assistant | Entrepreneur
Harkiran Sodhi
Harkiran Sodhi
Forte Fellow | Emerging Markets Fellow | Business | Analyst
Hussain Sadikot
Hussain Sadikot
Computer Engineer | Student
Jim Schettler
Jim Schettler
Photographer | Videographer | Video Editor | Graphics and Animation
Jose Manuel Santiago Echevarria
Jose Manuel Santiago Echevarria
Business Analyst
Julien Schléret
Julien Schléret
Marketing Manager
Keval Pipalia
Keval Pipalia
Machine Learning Enthusiast | Computer Engineering Student
Kifah Alzoubi
Kifah Alzoubi
Telecommunications & Computer Science
Kingsley Ocansey
Kingsley Ocansey
Data Entry Specialist | Football
Koen Van Den Berge
Koen Van Den Berge
IT Manager
Mansi Sawant
Mansi Sawant
Android Developer
Maritina Tsouvala
Maritina Tsouvala
Live Sites Specialist | Archaeology
Massimo Pannunzio
Massimo Pannunzio
Outside Plant Project Manager
Mohammad Khan
Mohammad Khan
Electronics Engineer
Mohit Singh
Mohit Singh
Application Developer | Writer
Muhammad Asadullah
Muhammad Asadullah
Full Stack Web Developer | Artificial Intelligence Engineer
Nick Knapp
Nick Knapp
Software Engineer
Nikhil Goyal
Nikhil Goyal
Electrical Engineer | Stack Developer
Nwadiaro Miracle
Nwadiaro Miracle
Electrical and Electronics Engineering
Pradeep Venkatachalam
Pradeep Venkatachalam
Hardware Engineer
Precious-Gift Ekome
Precious-Gift Ekome
Data Scientist | Technical Fellow
Prerit Shah
Prerit Shah
Network Security Operations
Prince Kansagra
Prince Kansagra
Civil Engineering Student
Randy Velasquez
Randy Velasquez
Stage Technician
Rishabh Choudhary
Rishabh Choudhary
Robotics Engineering | Software Development
Rishabh Gupta
Rishabh Gupta
Analyst | Engineer
Ruthvik L. Bhat
Ruthvik L. Bhat
Information Science Engineer
Saeed Ahmad
Saeed Ahmad
Software Engineer
Sanchi Bansal
Sanchi Bansal
Fullstack Web Developer
Shahbaaz Khan
Shahbaaz Khan
Mechanical Engineer | Design Engineer
Shesha Shankar
Shesha Shankar
Mobile and Web Application Developer
Shilpa Sadhumalani
Shilpa Sadhumalani
Marketing Professional
Siddharth Ojha
Siddharth Ojha
Aerospace Engineer
Sridevi Sadhineni
Sridevi Sadhineni
Auditor | Business
Thomas John
Thomas John
Analog Design Engineer
Thomas Shaw
Thomas Shaw
Project Manager | Biotech
Vinita Tiwari
Vinita Tiwari
Assistant Professor | Communications Engineer | Philosophy
Vitthal Shukla
Vitthal Shukla
Video Content Creator | Data Analytics | Mechanical Engineering Student
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Talent Acquisition Executive
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Data Scientist | Analytics

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