Blockchain technology refers to an expanding group of records (a basic data structure in computer science). These records are called blocks, and each block has a cryptographic hash function of the block that comes before it, transaction data that is usually represented by a hash tree or Merkle tree root hash, and a timestamp.
Blockchain databases are used as open, distributed ledgers that are usually managed by peer-to-peer (P2P) networks and can record data of transactions between two parties using a trusted intermediary so that these untrusted parties can reach a consensus on a common digital history. Blockchain security is marked by the fact that once the data in a block is recorded, it cannot be retroactively changed unless there is of the network majority and all subsequent blocks are also changed.
Satoshi Nakamoto (the name used by the unknown person or people who developed the cryptocurrency bitcoin) created blockchain in 2008 to be the public transaction ledger for bitcoin. Today, blockchains are primarily used by banks used to record cryptocurrency transactions, or used as the basis for smart contracts.
There are three different types of blockchain database: public blockchain networks, which have no access restrictions; private blockchain networks, where one must be invited by the network administrator to join; and semi-decentralized consortium blockchains which are controlled by multiple companies each operating a node on the blockchain network. You can go about blockchain implementation through the programming languages of Python, Java, and C++. The cost of blockchain implementation usually ranges around a few thousand dollars.
This article explains the steps needed to implement blockchain and will serve as a blockchain tutorial for businesses who are planning on implementing it. Here are four steps that businesses need to take when implementing a blockchain solution.
1. Discovery and development of a use case
Companies need to identify a use case where blockchain implementation is a solution. Then they need to develop the blockchain technology that is needed for that use case. Smaller companies will usually look to a vendor partner to supply a product to see how they could provide the technology for their firm. Bigger companies will usually work to develop the necessary technology internally if possible. Regardless of the way your business goes about doing blockchain implementation, you must gain in-house knowledge with blockchain.
2. Proof of concept
This stage is where businesses create a system with real customer data (without affecting customers) so it can be seen how the blockchain system works in action. The cloud is probably the best system for this exercise.
This stage is where the blockchain system is tested with a handful of customers. This is where data is put into production. The company uses this stage to become more comfortable with the software.
4. Full implementation
Once the company is comfortable with the software and satisfied with the trial, it is time to fully commit to the application. This full-scale rollout of the blockchain system puts production out into the wild, where it must scale and run largely on its own—with customers being happy with the results.
Even though the post office is still running strong alongside the vast use of email, some business executives fear that software will limit or completely replace their role within a company. Technology such as blockchain does promise to change the trajectory of the current market, but companies can avoid the tendency to become irrelevant by jumping on new opportunities and learning the ropes for effective implementation.