It all started with Bitcoin in 2009. The underlying technology used by Bitcoin was the first version of blockchain. Since then, blockchain has come a long way. Blockchain not only powers the myriad cryptocurrencies but, now, is becoming the foundation for many applications. From the public implementation of blockchains, primarily for cryptocurrencies, the evolution is towards the private implementation of blockchain within enterprises, embedded into applications.

We are at a juncture where there are innumerable possibilities that can be foreseen for the use of blockchain. Blockchain is disruptive!

The use of blockchain technology will disrupt the way interactions happen in society, how records are kept, and how business and trade happens. In the longer term, there will be a potential shift from a trust-based economy based on central authorities to a proof-based economy based on collaboration and consensus. The technology is still at a very nascent stage but in all likelihood will have an impact on the economy as well as several societies and cultures around the world. This potentially will change how fraud happens, all based on immutable records and distributed database not controlled by a single authority and that are hard to tamper.

The combination of IoT (Internet of Things), big data, easily accessible and on-demand computing power in the cloud, coupled with blockchain and “smart apps” will lead to many technological advancements in the next few years. It will be a very, very interesting journey from a technology and societal perspective. There will be different approaches to creating business processes and how multiple parties will work together in a supply chain, enabled by smart contracts.

But what is this technology that can have such a significant impact on our business and interactions? Let us look at it at a high level.

What Is Blockchain?

Blockchain is a secure, shared, distributed ledger. The distributed ledger can be public, private, or part of a consortium.

The key aspects of the blockchain database are:

• Secure - Each transaction is secured with cryptography. Cryptography is the fundamental building block based on which blockchain has been developed.
• Shared - The database is shared between parties (peer-to-peer) without the need for any intermediary to verify the authenticity of the records of the database, thereby not needing a central authority to be trusted.
• Distributed - The blockchain database is distributed with multiple replicas of the same database. This also means that the trust in the data is also distributed. How is this achieved? Through a mechanism of consensus.
• Ledger - A ledger where you can only write and cannot alter records once written. The blockchain database can only be appended with immutable records of each transaction and time-stamped. The transactions are recorded in the shared ledger in a secure and verifiable way, reducing the chances of someone tampering with the records.

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