Modern companies are increasingly optimizing their activities thanks to blockchain technology. How can it help IT solutions implemented in supply chains or food security? When thinking about the future of the company, one should consider the possibilities of blockchain – one of the most groundbreaking solutions of our time. With a partner who uses proven, global blockchain platforms like Hyperledger or Ethereum, you can safely revolutionize the processes of any company.
What is blockchain?
Blockchain, or chain of blocks, is a tangible or intangible, unchangeable data register shared by many trusted sites. It enables asset tracking and transaction documentation. The entries follow each other and form subsequent blocks. What is unique about blockchain is the combination of cryptography in the form of unidirectional hash functions, asymmetric cryptography and time stamping.
Each subsequent block contains a reference to the previous block, so-called: hash. This is a unique and unambiguous ‚fingerprint’ of data created with one-way hash functions. More precisely, this means calculating a short signature for the given input data. It is not possible to generate the same hash for two different data sets. It is also impossible to restore the original data set with only its hash. However, we can quickly identify digital data and verify the integrity of this data. Thanks to this, even the smallest change in the source data in the form of a change of one bit will change the hash. This mechanism used in the data chain ensures the integrity of entire data sets. In the blockchain, each transaction is hashed separately, and then the entire data set has one hash identifying it. By using the hash tree (Ralph Merkle) we can identify both the change of data at the level of a single transaction as well as the change of the entire transaction to another.
Asymmetric cryptography is a key element of blockchain. Thanks to it, the exchange of information is secured using encryption. This occurs without having an agreed common security key. The technology is widely used – most often in creating certificates and digital signatures. Without asymmetric cryptography, blockchain technology could not exist – it is used for all possible transactions. To send the transaction, each member of the blockchain uses his private key in combination with the public keys of the recipients. What is unique to blockchain is that each participant generates keys independently without an additional certification body.
Time stamping is also a key cryptographic element in blockchain technology. It means that all network nodes synchronize time with each other, thanks to which blocks and individual transactions have a time stamp. This way all data (transactions) are arranged on a timeline, thanks to which they form a reliable and credible history.
Thanks to the need for a consensus automatically concluded by blockchain network participants, the need for a trusted third party for transaction processing disappears. It’s a mechanism programmed on transaction approval nodes and then attaching new blocks. Examples are proof-of-work (Nakamoto consensus) or consensus based on the algorithm of Byzantine generals. The second type of consensus is more common in private blockchain networks.
Thanks to intelligent contracts, blockchain is more and more widely used outside of its traditional area – the cryptocurrency area. The contracts give the possibility of programming by using scripts that perform calculations. Thanks to blockchain technology they remain unchanged forever and work exactly as they were pre-programmed. Smart contracts allow blockchain network to become a carrier (or storage) of non-financial digital assets or a digital image of material values. It is thanks to this functionality that we can build new, completely innovative solutions based on blockchain technology.
All described blockchain features result in a distributed database that does not have a selected central node (main administrator), which means that there is no single point of failure. The network is perfectly protected against data manipulation. It’s time to learn more. Companies around the world see the potential of blockchain and optimize processes using this technology. Join them now.