Blockchain has changed the way we perceive, process, and verify the information. The applications of the concept are still being explored in various industrial verticals. The most high-impact blockchain applications have been built on the Bitcoin model.
So how does Bitcoin actually work?
First of all, Bitcoin or any other currency in this domain is not downloaded or uploaded anywhere. All transactions implemented with Bitcoin are recorded in a register or ledger, which is globally shared across the extensive peer-to-peer bitcoin network. Each transaction has to be verified and approved.
This is executed on computers hooked on to the network by a global volunteer group. There is no “main server” or “headquarters” for this network, hence no single point attack can bring the system down.
Post verification and clearance by the volunteers, these transactions are subsequently stored in what is called a “block.” The next set of transactions is linked to this block with another block, and consequently forms a “chain.”
Each subsequent block validates the block before it, ultimately creating a verified and time-stamped “blockchain” of information that cannot be altered without rendering it obsolete. The “register” or blockchain can be accessed by anybody at any point in time on a computer.
Blockchain Working Model
To take just one example, BHP Billiton is a multinational firm involved in mining, petroleum, and metals. It’s a multinational company based in Australia. BHP has already integrated Ethereum blockchain technology into its day-to-day administrative operations.
It makes use of the InterPlanetary File System or IPFS, which is a peer-to-peer file system to streamline communication between the core company and its vendors. The technology helped the company to cut out the need to depend on several vendors for the sampling of fluids, ore testing, shipping, and distribution.
With Ethereum’s technology in place, all of these processes can be tracked by anyone from the lab technician to the mining engineer to the supply chain manager to sales and distribution. The system can even facilitate a window to access and monitor the whole process for a quality control officer or safety engineer.
The end result is that they get a system that enables every individual involved in the process to have a real-time assessment of how the process is developing at each stage and, if required, make modifications without any delay or loss of data at zero cost. This is just one example among several blockchain applications currently in place; changing the world as we speak.