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Blockchain Technology Fundamentals for Business People

April 05, 2021

One of problems today’s businesses are facing is cybercrime. To combat this, administrators and executives have invested a lot of resources into cyber security so as to strengthen their business’ engineering systems and operations. And if you know about cyber security, then you at least have heard of a concept called ‘blockchain technology‘. But hearing of it isn’t enough, when it contains within itself huge implications. It has the potential to change the world as we know it.  

As businesses, it’s of utmost importance that you keep up with the times, and thus understanding what blockchain technology is might prove to be extremely advantageous. 

What is blockchain technology and how does it work?

“How do you ensure something is the original copy of something on the Internet? Prior to blockchain technology, you couldn’t.” This was what Angus Champion de Crespigny, a strategy leader at Ernst & Young said. Similar to developments before it, such as mobile and cloud, blockchain is presumed to thoroughly and downright change the way businesses work in the near future.

You can check out the following article to grasp a thorough definition of blockchain: What is Blockchain Technology? History and Evolution of Blockchain

Blockchain technology first came into widespread recognition circa 2008 and 2009 with the help of a mysterious Japanese person or collective working under the pseudonym of Satoshi Nakamoto. In Nakamoto’s original paper that first introduced the cryptocurrency Bitcoin in 2009, “Bitcoin: A Peer-to-Peer Electronic Cash System”, he called blockchain a “timestamp server”. 

But the concept itself surfaced much earlier, 1991 in fact, initially introduced by Stuart Haber and W. Scott Stornetta as the idea of a “cryptographically secured chain of blocks”. These blocks are linked and secured and shared, and by its very nature, incredibly difficult to modify by taking advantage of an amalgamation of the following conditions in each block: the previous block’s hash and a timestamped batch of verifiable individual transactions, forming a tight-knit chain. 

What all this in short means is that the data encryption and decryption via blockchain technology is designed to be much superior than any of its counterparts, because new information/transaction will have to be verified and authenticated before it can form the next block and continue the chain. You can be assured that once data is added to the blockchain, it won’t be removed or altered.

Going back to Bitcoin, how is a cryptocurrency such as it related to the blockchain technology? Well, essentially speaking, the blockchain as mentioned acts as the public ledger for all Bitcoin transactions, a cryptographically secure system for digital transactions. Using the technology, Bitcoin has been able to gain a strong foothold over the years as the pioneer, premier digital currency, with its unique ability to counteract double-spending without requiring substantial capital or properties. 

blockchain technology 2

Another reason for the blockchain’s mainstream success is thought to be advancements in data computing allowing the technology to proceed, and you won’t be incorrect for believing it to be so. Blockchain technology is incredibly straining to work with, and requires a level of data computing that far exceeds what’s normal. It needs to be so in order to perform as expected. Today’s world of computers is much different from the world of 1991, and even 2008 seems like a distant past now. Blockchain technology’s path to success has been and continues to be drawn for it, with data processors constantly evolving.

Although blockchain technology might not replace the classic system of centralized database networks, it likely will usher in a new era of decentralized ecosystems. And we’re here for it. 

How blockchain technology has disrupted the way we do business

Although blockchain technology has only been put into use in recent times, it’s already causing profound changes and impacts on pretty much all fields, and continues to provide its users an alternative, refreshing way to conduct businesses. We will delve into a few leading examples. 

In Marketing

Advertising is one of the major fields that can really benefit from blockchain technology’s emergence. The technology can help reduce fraudulent activities significantly and assist advertisers in reaching their audience and target markets organically and securely. 

More specifically, the systems that principles of blockchain have induced can help executives better monitor and track budget spendings, as well as investments and other public relations operations in order to tighten up the way they work and prevent risks of underachievement or undercutting. 

Music industry

This is an underrated and less known influence of the technology, but no less important than any other. The blockchain can help ensure that musicians won’t suffer from underpayment and delays of sales and/or streams. In short, blockchain technology will make it so that royalties are fairly and transparently distributed, and that there won’t be any deceptive proceedings. 

blockchain music streaming PeerTracks

One specific example is PeerTracks, a music streaming service that employs SounDAC Blockchain to pay for all of its copyright holders. With PeerTracks, you can basically listen to music for free without any ads while also supporting the artists you are listening to. Using the blockchain, anyone can track that rightsholders are receiving their rightful shares. 

Finance

This is an obvious example. Financial industry is indeed the first thing that one must talk about when one talks of the blockchain technology. There have been many applications of blockchain within the industry, namely the aforementioned Bitcoin and other cryptocurrencies.

The blockchain provides the safest, most secure system that permits verifiable ledger transactions, allowing users to genuinely and thoroughly inspect and control their assets. We will see how mainstream, global enterprises are changing their business models to react to this new sensation, but already there have been a lot of initiatives taken into research and development to have blockchain technology enabled and working at various big companies. 

Business management

Blockchain has also helped and can help better coordinate management for the world’s biggest corporations by providing the most optimal and secure way to verify interactions and consequently transactions. Tasks have become more formulated and simplified while increasing in effectiveness. 

If you are an executive or a HR personnel, blockchain technology will surely help in cutting down doing redundant work and allowing for a smoother operational framework. Employees, no matter where they are and what their job is, can also be paid in a preferred currency and almost instantaneously. And rights ownerships, for contractors for example, will no longer be such a hassle to work with such as seen in the recent past. This is such a leap when compared to old models. 

When it comes to blockchain technology, we are only seeing its very first transfigurations. But do you want to be at the forefront?  

Does your company really need blockchain technology?

This is tough to say, but asking this sort of question ‘do I really need [a new technology]’ is everybody’s first step toward progress.

As with any new technology, there are several things you must first note about the blockchain to ensure that it’s indeed what you need. Although blockchains solve one of the biggest problems in database storage, which is centralization – as it removes the need for an authority and works almost autonomously – it comes with other limitations, such as being less private than traditional models because it’s all about coordinating multiple resources. 

See also: Top Blockchain Companies in 2021

There’s also the problem of uncertainties, as no one can be sure that the status of the software will remain as it is. The technology also lacks consensus governance and relies on communities of developers which can be said to be inconsistent. Although this is tolerable for the time being, as have been mentioned, we’re only seeing its early transfigurations, and thus consistency lacking is quite expected. Regardless, blockchain technology’s unpredictability still is considerable.

types of blockchain

Another thing you must consider is the type of blockchain network that you want for your business: Public, private or permissioned? Public blockchains will allow anyone to join and participate, but there’s weaker security; private ones are smaller and capable of being more closely controlled by an organization behind its own firewall system or on its premises; permissioned networks are similar to private ones but more geared towards businesses, which places restrictions on roles people have in the network and need invitation or permissions to join.

The costs of hosting a blockchain network system should not be dismissed, either, as they generally require substantial computational power to run, at least for now. So it should be wise to tread lightly and figure out if your company has the needed resources for the application of the technology.  

All of this seems to point to the fact that the question of needing the technology can’t really be answered straightforwardly in a vacuum. This is not dissimilar to how blockchains operate; everything is linked, connected and prior circumstances are critical to the development of the future. Time and environment will tell. 

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