Blockchain is a ledger of decentralized data that is securely shared.
Blockchain technology enables a collective group of select participants to share data. With blockchain, transactional data from multiple sources can be collected and shared. Data is broken up into shared blocks that are chained together with unique identifiers in the form of cryptographic hashes. Blockchain provides data integrity with a single source of truth, eliminating data duplication and increasing security.
In a blockchain system, fraud and data tampering are prevented because data can’t be altered without the permission of a quorum of the parties. A blockchain ledger can be shared—but not altered. If someone tries to alter data, all participants will be alerted and will know who make the attempt.
To learn more about blockchain, its underlying technology, and use cases, here are some important definitions.
- Decentralized trust: The key reason that organizations use blockchain technology, instead of other data stores, is to provide a guarantee of data integrity without relying on a central authority. This is called decentralized trust through reliable data.
- Blockchain blocks: The name blockchain comes from the fact that the data is stored in blocks, and each block is connected to the previous block, making up a chainlike structure. With blockchain technology, you can only add (append) new blocks to a blockchain. You can’t modify or delete any block after it gets added to the blockchain.
- Consensus algorithms: Algorithms that enforce the rules within a blockchain system. Once the participating parties setup rules for the blockchain, the consensus algorithm ensures that those rules are followed.
- Blockchain nodes: Blockchain blocks of data are stored on nodes—the storage units that keep the data in sync or up to date. Any node can quickly determine if any block has changed since it was added. When a new, full node joins the blockchain network, it downloads a copy of all the blocks currently on the chain. After the new node synchronizes with the other nodes and has the latest blockchain version, it can receive any new blocks, just like other nodes.
There are two main types of blockchain nodes:
- Full nodes store a complete copy of the blockchain.
- Lightweight nodes only store the most recent blocks, and can request older blocks when users need them.
Types of Blockchains
- Public blockchain: A public, or permission-less, blockchain network is one where anyone can participate without restrictions. Most types of cryptocurrencies run on a public blockchain that is governed by rules or consensus algorithms.
- Permissioned blockchain: A private, or permissioned, blockchain allows organizations to set controls on who can access blockchain data. Only users who are granted permissions can access specific sets of data. Oracle Blockchain Platform is a permissioned blockchain.
To learn more about blockchain technology, download the complementary Oracle ebook: Blockchain for Dummies
“I see a permissioned blockchain like a family. What I mean by this is family members, they trust each other and protect each other’s back. No guests are allowed in without the formal agreement of all family members. So true family members, they keep private information within the family. It's data privacy. What happens in a family stays in the family. They update each other with all information. Like data privacy, they protect each other's information so they can protect each other and make each other's house secure. So this is the family chain. It is the blockchain. From my point of view, blockchain is all about security, efficiency, and data privacy.”
The business value of blockchain
The use of blockchain technology is expected to significantly increase over the next few years. This game-changing technology is considered both innovative and disruptive because blockchain will change existing business processes with streamlined efficiency, reliability, and security.
Blockchain technology delivers specific business benefits that help companies in the following ways:
- Establishes trust among parties doing business together by offering reliable, shared data
- Eliminates siloed data by integrating data into one system through a distributed ledger shared within a network that permissioned parties can access
- Offers a high level of security for data
- Reduces the need for third-party intermediaries
- Creates real-time, tamper-evident records that can be shared among all participants
- Allows participants to ensure the authenticity and integrity of products placed into the stream of commerce
- Enables seamless tracking and tracing of goods and services across the supply chain
Food safety with Oracle Blockchain Platform
From manufacturing to healthcare, blockchain solves a number of complex business issues facing organizations today.
An emerging technology
Blockchain is an emerging technology that can work with other technologies, such as artificial intelligence (AI), the Internet of Things (IoT), and machine learning to help users achieve important insights from data.
Traditional IT systems are not built to handle the massive amount of data from an IoT deployment. The volume, velocity, and variety of data produced by IoT networks could overwhelm enterprise systems or severely limit the ability to trigger timely decisions against trusted data. Blockchain’s distributed ledger technology has the potential to address these scalability challenges with improved security and transparency.
What is Hyperledger?
Hyperledger is an open source project started by the Linux Foundation to advance global collaboration of blockchain technologies. The main purpose of Hyperledger is to develop open source blockchain implementations that address enterprise goals for scale, performance, and security. Hyperledger supports a neutral, open community of members who contributed code to develop Hyperledger Fabric, the software that many enterprises use as the foundation for blockchain projects.
Oracle is a member of Hyperledger and Oracle Blockchain is built on Hyperledger Fabric, leveraging open source and maintaining interoperability with core protocols.