Blockchain Technology explained with CryptoPreneur UK
As we explore the technology behind Blockchain it is important to understand what role Bitcoin plays.
Bitcoin is a digital currency launched in 2009 with the intention of simplifying online transactions by bypassing government control of currency. It does this by storing and transacting the currency over a ‘peer-to-peer network’ a Blockchain – rather than using a central monetary repository is important to make the distinction that Bitcoin is not a Blockchain itself.
Bitcoin it’s transacted over an open public anonymous Blockchain network, in many ways you can think of Blockchain as the operating system and Bitcoin is one of the many applications that run on that system.
The Blockchain that underlies Bitcoin has some fundamental similarities, but also key differences to a Blockchain built for business such as the Linux foundations hyper ledger fabric.
Both are cost effective as they increase the speed of transactions and reduce overhead costs – both are highly efficient as the transaction is recorded once and is then visible to all parties through the distributed network.
Both the tamper-evident – the transaction cannot be changed it can only be reversed with another transaction in which case both transactions are visible. However a Bitcoin Blockchain is limited in a few ways – it is primarily designed to transact cryptocurrency and is also open and public, meaning anyone can join and view every transaction that’s ever happened on the network.
It is anonymous, meaning it is nearly impossible to know the identity of who’s involved in a transaction. Because of this, it requires heavyweight cryptography to deter fraudulent activity which requires significant computing power.
These characteristics leads are many issues around efficiency – confidentiality – security and trust when conducting business, especially around regulated industries.
On the other hand, a Blockchain built for business enables you to exchange anything of value whether tangible like a car or house, intangible like a patent or copyright or digital like videos or photos.
It is private – so the invited members know exactly who they are doing business with – it is permissioned, so participants are only given access to data relevant to them. And it runs on smart contracts business logic embedded into the network, reducing disputes and increasing trust.
A Blockchain for business also utilizes selective endorsement – which allows participants to control exactly who verifies transactions. All of these qualities make a Blockchain for business more efficient more secure and more effective across your business networks.