9 important points to understand BlockChain

Blockchain is one of the terms most used these days by IT experts. So, what is blockchain? What are its advantages and disadvantages?

In simple terms blockchain is nothing but a database. A database that can be shared across a number of participants. The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta. Blockchain was invented by a person using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrencybitcoin.

If you are new to blockchain, you would be wondering why does one need blockchain when we have cloud to store data and access from anywhere, well blockchain has main two merits:

1.     Unique Security System

Unique cryptographic security system is one of the reasons organizations want to implement block chain. Blockchain is also called distributed ledger, which means that for data to be read or written from database, one needs 2 keys a public key, which is basically the address and database where the information is stored, and a private key which is one’s personal key. Therefore unless one has both the keys it is not possible for a participant to either read or write database.

2.     Decentralization of Database

Second one being blockchain being a digital log of transaction and a decentralized database which means that you have a robust system.

And when I say unique security system even though participant has both the public and the private key, to update the database one needs approval of majority of the database network participants. Essentially you are securing the database against the idea of single point of failure and somebody trying to corrupt the database and democratizing the database. One can only append the data structure not remove it.

In short, Blockchain is a decentralized ledger of all transactions across peer-to-peer network.

Now coming to the demerits of block chain.

1.  100% Tamper Proof is a Myth

It is a myth that blockchain is 100% tamper-proof. Blockchain could be tampered with if majority of the approval is gained and all previous transactions are rewritten. But again, this is largely impractical as we have already seen just having credentials one cannot tamper the database.

2.   Truth Machine?

Blockchain cannot assess whether an external input is accurate, which means that you have entered the wrong Aadhaar details of a person, the data isn’t checked by itself. It ensures that the participant updating the database has the credentials and approval of the network.

According to Brant Carson, McKinsey partner Blockchain use cases can be categorized into 5 distinct buckets which addresses two major needs that is record keeping and transaction.

1. Static Registry

A distributed registry for storing reference data that gives you a view of the of the historical data. Organic foods are now a fad, but if you want to know its origin or if its has been processed. But if this data is stored and accessed through blockchain the customer can be assured about the whereabouts of the food. In other words the food would have fingerprint identification.

2. Identity

A simple distributed database for identity related information for governments

example: Aadhaar, voter id.

3. Smart Contracts

This is where smart contracts are a set of conditions triggering automated, self-executing actions.

4. Dynamic Registry

Blockchain is popular in trade finance, where the data is changing consistently.

5. Payments Infrastructure

We all knew very famous example of blockchain usage in cryptocurrency like Bitcoin.

To sum it up Blockchain is uniquely secured distributed public ledger with no single point failure.

We are sharing this article series in Blockchain area, to spread awareness about it.

For any specific requirement about block chain or its security assessment, do contact us at contactus@grassdew.com or visit to www.GrassDew.com to know more about our different services and products. 

We, GrassDew IT Solutions Pvt Ltd, provides consulting services, software solution services, security services, digital marketing and knowledge services.

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