What exactly is blockchain?

What is blockchain? During an interesting Vlerick session, i.deeds was immersed in the world of blockchain. We briefly summarize what we learned during the interesting course, and why it can be of great value for forward-looking companies.

Jamsheed Shorish is CEO and founder of Shorish Research in Belgium, providing computational business services to start-ups, SMEs and enterprises. He’s an honorary associate professor at the Australian National University and an affiliated researcher with the Research Institute for Crypto economics at the Vienna University of Economics and Business. His current focus is on the digital economy and platforms, and on the foundations and analysis of distributed ledger technologies such as blockchain. He explained in detail what it entails.

Blockchain vs DLT

Blockchain and distributed ledger technology (DLT) are receiving a lot of attention for their potential to transform how we do business and manage transactions. At its core, a blockchain is a decentralized, distributed database that maintains a growing list of records called blocks. Each block includes a timestamp and a link to the previous block, creating a chain of blocks that cannot be altered retroactively without modifying all subsequent blocks. This makes it very difficult for any individual or group to manipulate the data within the blockchain.

DLT, on the other hand, refers to the broader concept of using distributed networks to record transactions securely and transparently. While the term is often used interchangeably with blockchain, it can also refer to other technologies that use distributed networks to achieve the same goal.

The advantages 

One of the main advantages of using DLT is its ability to provide a secure and transparent record of transactions. Because the database is decentralized and distributed across a network of computers, it is not controlled by any single entity. This makes it very difficult for anyone to alter the records within the database without the consensus of the network.

Furthermore, the use of cryptographic techniques ensures that the data within the database cannot be easily modified or tampered with. This makes DLT an attractive option for conducting transactions that require a high level of security and trust, such as those involving sensitive financial or personal information.

In addition to its security and transparency, DLT also offers the potential for increased efficiency and cost savings. Because it is decentralized, it can potentially reduce the need for intermediaries in transactions, which can save time and money. Additionally, the use of smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller written into code, can automate complex processes and reduce the need for manual intervention.

While there are many potential benefits to using DLT, it is important to note that the technology is still in its infancy and there are challenges that need to be addressed. For example, the scalability of current blockchain technologies is limited, and there is still a lack of standardization and regulation in the industry. Additionally, there are concerns about the potential for illegal activities, such as money laundering and the financing of terrorism, to be conducted on blockchain platforms.

Limitless potential

Despite these challenges, the potential of DLT to transform how we conduct business and manage transactions is clear. As the technology continues to evolve and mature, we may see an increasing adoption of DLT in various industries, including finance, supply chain management, and healthcare.

One of the most compelling uses of blockchain and DLT is in supply chain management. These technologies can help companies to track the movement of goods and materials through the supply chain in real time, providing greater transparency and accountability. This can help to reduce the risk of fraud and errors and can also make it easier for companies to ensure that their products are being sourced sustainably and ethically.

Another important use is in data security and privacy. These technologies can help to protect sensitive data by encrypting it and distributing it across a network of computers. This makes it much harder for hackers to access and steal the data and can also make it easier for companies to comply with data privacy regulations.

Additionally, it can also be used to create new financial products and services. For example, companies can use these technologies to create digital currencies and other forms of digital assets, which can be traded and used for a variety of purposes. This can open new opportunities for companies to generate revenue and offer innovative services to their customers.

Revolution 

Overall, there are many exciting ways that companies can use blockchain and DLT to improve their operations and offer new services to their customers. These technologies have the potential to revolutionize the way that businesses operate and will likely play a major role in shaping the future of the global economy.

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