A new technology? Blockchain defined in our words
A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a merkle tree root hash). By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”. For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority.
The essential difference between blockchain and traditional technology
Blockchain databases consist of several decentralized nodes. Each node participates in administration: all nodes verify new additions to the blockchain, and are capable of entering new data into the database. For an addition to be made to the blockchain the majority of nodes must reach consensus. This consensus mechanism guarantees the security of the network, making it difficult to tamper with. And offer:
Decentralized control – Distributing administrative powers or functions of (a central authority) over a less concentrated area
Confidentiality – Being a write-uncontrolled, read-uncontrolled database. That means anyone can write a new block into the chain, and anyone can read a block in the chain.
Traditional technology databases use client-server network architecture. Here, a user (known as a client) can modify data, which is stored on a centralized server. Control of the database remains with a designated authorityd which authenticates a client’s credentials before providing access to the database. Since this authority is responsible for administration of the database, if the security of the authority is compromised, the data can be altered, or even deleted. Tradition technology has the advantage that it could be “easily” manipulated. If you compare it to the blockchain that need a certain amount of block that have to be verified.
Going to a less technological perspective we could mention that:
- It is less expensive to maintain the network
- It can be accessed globally where the only requirement is access to internet
- The maintenance of the single source of truth is easier
- The blockchain can be faster than traditional technology
- Less country specific laws that hinder the flow of data
- More transparent than traditional technology
- If implemented correctly the end user should not notice many changes
- No server outages which means a service level agreement of almost 100%