In this executive briefing, we will look at what a Blockchain is, why you would want to use it, potential use-cases, and the main differences between a Blockchain and a database. By the end, you will understanding what this technology is used for.
Tech leaders need a fundamental understanding of the tools and technologies their teams use to build solutions. In this course, State of Blockchain: Executive Briefing, you will gain the ability to apply a Blockchain to your organization. First, you will learn why you would want to use a Blockchain. Next, you will explore the potential use-cases for a Blockchain. Finally, you will discover the main differences between a Blockchain and a database. When you are finished with this course, you will have the skills and knowledge about Blockchains to decide if they are suitable for your organization.
Stephen Haunts is an experienced Software Developer and Leader who has worked across multiple business domains including Computer Games, Finance, and Healthcare Retail and Distribution. Stephen has worked in languages ranging from Assembler, various forms of BASIC, to C and C++, and then finding his love of C# and .NET.
Trust in the Digital Age One of the benefits of blockchain technology is to get trust on the internet by using decentralization. What do we mean by this? Let's take a look at an example in the physical world. Most people have a bank account, and a bank can be seen as a centralized institution that you trust to handle your money and transactions. You may be thinking, what's the big deal? I've been with my bank for years and not had any problems. But that's not really the issue. The thing we're talking about here is that as an individual we are putting a lot of trust into one organization to manage our money. This is also a huge burden for the bank in question. They have to keep your data safe and secure to help maintain that trust. Because you are putting your trust into one organization, what is stopping them from accidentally losing some of your money due to systems errors or fraud? These are all threats that the banking system has to deal with, and as consumers we trust them to get it right. But they don't always get it right and things can go wrong. If we take this concept to a higher level than just banks and look at traditional fiat currencies, like the U. S. dollar, Euro, or British pound, these again are very centralized concepts, as they are controlled and regulated by governments. Plus we are used to centralized control from governments. There is another option, and that is to be decentralized. With that, let's take a look at bitcoin.
Defining Blockchain So, what is a blockchain? Let's look at some definitions from different sources. The first is by Don and Alex Tapscott, who are the authors of the book Blockchain Revolution. Their definition states that a blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions, but virtually everything of value. Now let's look at a more generic definition from Wikipedia. Their definition states that a blockchain is a continuously growing list of records called blocks, which are linked and secured using cryptography. From looking at these two definitions, we can see that a blockchain is incorruptible, a digital ledger of continuously growing records that are linked and secured with cryptography.
Do You Actually Need a Blockchain? The important question your company should ask is, do we actually need a blockchain? There's a simple list of questions that you can ask to help determine this. First of all, do you need a shared public database between multiple parties? If we're using a public blockchain, do you have a requirement for the data on this blockchain to be accessible by anyone? If you're using a private blockchain, do you have a need for this data to be shared between several known parties or companies? If the answer is no, then a blockchain might not be the best technology for you to use. The next question to ask is if there are multiple parties who need to share the data, do any of these parties have conflicting incentives or are not trusted? One of the main purposes of a blockchain is to enable trust between multiple parties. So, if there is a level of distrust between the other parties and they have conflicting incentives, then a blockchain is a good solution to look at. Otherwise, a blockchain may not be needed and you can use a database instead. The next question you should ask is, are the other parties able to play by the same rules? By this we mean will you be able to get them to use the same rules to govern the transactions added onto the blockchain and the same rules to verify the transactions? If the answer is no and you don't think you can get all the parties to play by the same rules, which is easier said than done, then a blockchain isn't going to be a good solution to use. The next question is, do you need an immutable log of all actions to be recorded? Blockchains work best with transactional data like financial transaction or insurance claim settlements, for example. For transactions like this, it makes sense to log them in a long chain of related data items. If this isn't something you intend to do, then a blockchain is the wrong solution. If you answered yes to all of those questions, then you've probably determined that a blockchain will be useful to your organization. At this point, you need to determine whether you are happy to use a public blockchain where everyone is participating in the network and can access and verify your data, or whether you want to use a private blockchain, which is more limited to a consortium of companies.