Blockchain technology is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network¹. Here are some key points about blockchain:
- Assets: An asset can be tangible (like a house, car, cash, land) or intangible (like intellectual property, patents, copyrights, branding)¹.
- Importance: Blockchain provides immediate, shared and completely transparent information stored on an immutable ledger that can be accessed only by permissioned network members¹. This technology can track orders, payments, accounts, production and much more¹.
- Security: No participant can change or tamper with a transaction after it's been recorded to the shared ledger¹. If a transaction record includes an error, a new transaction must be added to reverse the error, and both transactions are then visible¹.
- Smart Contracts: To speed transactions, a set of rules — called a smart contract — is stored on the blockchain and executed automatically¹.
- Blocks: These blocks form a chain of data as an asset moves from place to place or ownership changes hands¹. The blocks confirm the exact time and sequence of transactions, and the blocks link securely together to prevent any block from being altered or a block being inserted between two existing blocks¹.
Blockchain technology is best known for its crucial role in cryptocurrency systems for maintaining a secure and decentralized record of transactions². However, its applications are not limited to cryptocurrencies. It can be used to make data in any industry immutable—the term used to describe the inability to be altered². This aspect reduces the need for trusted third parties, which are usually auditors or other humans that add costs and make mistakes.
