What is blockchain?
Blockchain is a distributed ledger technology that allows digital assets to be transacted and traded in real time, keeping a permanent and an irreversible record.
It is more secure than other tools as its permanent and irreversible nature reduces the possibility of fraud or errors.
The definition comes from the use of data elements encrypted in blocks of computer code, chained together across a shared ledger through complex coding, or cryptology. So, if someone tries to hack the ledger, it is immediately identified by the involved parties and the chain falls apart.
How did it develop?
It originally emerged as the accounting method for the virtual currency Bitcoin and it is already appearing in a variety of commercial applications today, for payments or compliance, for example, almost in real time.
Whats the difference between business and public blockchain?
Business blockchain harnessed by several companies uses shared, secure ledger technology so everyone can see each transaction in real time. This information and data is restricted to participating users.
Public blockchains support cryptocurrencies, or digitally mined currencies like Bitcoin, Ethereum and Ripple and the rising and falling value of these is publicly-listed information.
How can blockchain be applied to business?
Invoicing and payments could be fully-automated and self-validating, alongside much of the company accounting process. Blockchain could also help with fraud and risk detection, alongside a host of other functions.
How is it useful?
Blockchain could be harnessed for long-term record keeping, when many parties need to access, create or maintain records over an extended time frame.
Also, for many regulatory considerations, the software is a reliable way to manage, document and report on compliance.
Blockchain can also eliminate the lag in payment cycles and asset transfer which reduces cost, improves accuracy and provides compliance efficiency.
Blockchain can be an effective way to streamline transaction processing when multiple separate companies need to write or add to the ledger.
However, when the business purpose is focused on a single process or transaction, blockchain may not be practical.
With thanks to Deloitte’s White Paper on Blockchain