Blockchain is a technology created as a modern XXI century alternative to the transactional market reality. The increased risk of fraud and extortion has pushed the IT community to develop a secure transaction system. It turned out to be a business disruption from different points of view.
The beginning of blockchain popularity was directly related to Bitcoin – the virtual currency. However, it soon became apparent that blockchain has many more applications and can serve as an effective security shield for any business transactions, including transactions related to online freight.
How does the Blockchain work (in very simple words)
Let’s take a look at a very simple example:
Imagine that you have a shared drive with your colleagues in the office. You just saved an Excel spreadsheet with the list of your company’s transactions there and shared access with your colleagues.
Your colleagues now can open & review the file you’ve shared. They are also free to add new information, but they can’t make any changes to the data which is already there. The result is that the information is open and shared with the group of authorized peers, but at the same time, it is also protected from any manipulation. This is how the blockchain works, in short.
Why is it called Blockchain?
The technology is called ‘Blockchain’ because it consists of a chain of blocks. Each block represents a piece of data. Blocks are connected in chronological order and are linked to each other.
How does the Blockchain really work?
There are a few things you should know about the Blockchain:
No data manipulation is possible
There is no central authority to control or manipulate the data. This allows for data exchange to be made directly with third parties.
The data is crypto-safe
Cryptography is used for the security services
Deleting the data is not possible
Once the block is added, it’s there forever – again, no manipulation possible.
All the parties involved have to validate the data in the block. No one is in control means that everyone is in control.