Blockchain technology is an advanced database mechanism that allows transparent information sharing within a business network. As a result, you can use blockchain technology to create an unalterable or immutable ledger for tracking orders, payments, accounts, and other transactions. Individually, both the buyer and the seller can record monetary transactions but neither source can be trusted. To avoid potential legal issues, a trusted third party has to supervise and validate transactions. Blockchain mitigates such issues by creating a decentralized tamper-proof system to record transactions.
Blockchain Features
In the property transaction scenario, blockchain creates one ledger each for the buyer and the seller. These properties of blockchain technology have led to its use in various sectors including the creation of digital currency like Bitcoin.
Decentralization
Decentralization in blockchain refers to the absence of a central authority controlling the entire system. It ensures that users trust the system rather than relying on intermediaries and reducing the risk of fraud and tampering.
Transparency
The transparency provided by blockchain networks gives users the ability to view all transactions made on the platform. This openness helps ensure that no malicious activities are conducted under wraps.
Security
Blockchain technology uses advanced cryptography techniques to protect user data and ensure that transactions are secure and cannot be manipulated.
Blockchain Use Cases in Different Industries
- Energy: Energy companies use blockchain technology to create peer-to-peer energy trading platforms and streamline access to renewable energy.
- Blockchain-based energy companies have created a trading platform for the sale of electricity between individuals.
- With blockchain-based crowd funding initiatives, users can sponsor and own solar panels in communities that lack energy access.
- Finance: Traditional financial systems like banks and stock exchanges use blockchain services to manage online payments, accounts, and market trading.
- An investment holding company that provides financial trading services throughout Asia uses blockchain technology to build a more efficient interbank payment account.
- Media and entertainment: Companies in media and entertainment use blockchain systems to manage copyright data.
- Amazon retail has filed a patent for a distributed ledger technology system that will use blockchain technology to verify that all goods sold on the platform are authentic.
Security Considerations in Blockchain Technologies
A notable security concern is the “51% attack,” wherein if a single party possesses 51% of a mining pool, it is possible to falsify an entry into the blockchain. Consequently, this allows for double-spending and even forking a new chain to the advantage of the mining pool. While this particular attack is expensive and difficult, the fact that it was effective means that security professionals should treat blockchain as a useful technology—not a magical answer to all problems.
The two main types of blockchain, public and private, offer different levels of security. Public blockchains permit any organization to join, potentially raising concerns about confidentiality. Private blockchains, on the other hand, typically only permit known organizations to join, achieving consensus through a process called ‘selective endorsement,’ where known users verify transactions.
Some issues persist with private blockchains, such as threats from insiders; however, many can be solved with a highly secure infrastructure. Activities such as performing risk assessments, creating threat models, and doing code analysis (e.g., static code analysis, interactive application security testing, and software composition analysis) should all be on a developer’s blockchain application roadmap.
Blockchain technologies have the potential to revolutionize various industries by providing transparency, decentralization, and security in business operations. Developers must consider potential security threats and continue exploring effective solutions, ensuring that these systems are not only innovative but also reliable for users.
