Leonie MirmikidisMarch 3, 2020
Ethically Sourced MarkMarch 19, 2020
There are five basic principles underpinning Blockchain technology.
- Distributed Database: Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary.
- Peer-to-Peer Transmission: Communication occurs directly between peers instead of through a central node. Each node stores and forwards information to all other nodes.
- Transparency: Every transaction and its associated value are visible to anyone with access to the system. Each node, or user, on a blockchain has a unique 30-plus-character alphanumeric address that identifies it. Transactions occur between blockchain addresses.
- Irreversibility of Records: Once a transaction is entered in the database and the accounts are updated, the records cannot be altered, because they’re linked to every transaction record that came before them (hence the term “chain”). Various computational algorithms and approaches are deployed to ensure that the recording on the database is permanent, chronologically ordered, and available to all on the network.
- Computational Logic; The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. So users can set up algorithms and rules that automatically trigger transactions between nodes. A Blockchain, amongst other things, is a decentralized network that links up partners who add value and provides access to online marketplaces. It’s like a smart intranet. It’s a globally distributed, highly secure platform.
In a nutshell, the Blockchain is a global system for mediating trust and selective transparency. The Blockchain is perfect for managing supply chain relationships, whose complexity and diversity of interests pose exactly the kinds of challenges the Blockchain addresses.