Blockchain is proven it’s worth in the business world. However, in order to make significant progress with new technology, you’ll need a modern foundation that can keep up.
This is the first of three installments on blockchain technology. Part two can be found here.
Smart contracts and immutable ledgers based on blockchain are already becoming viable in enterprise business scenarios far beyond cryptocurrency use cases. And you know a new technology is here to stay when it takes root in enterprise applications.
According to IDC, blockchain investment is expected to exceed $19 billion by 2024, indicating that banks, governments, hospitals, and businesses are increasingly investing in technology.
Third-party blockchain providers are bolstering the sector by providing safe, private enterprise-grade solutions that are generating a $39.7 billion market, according to MarketsandMarkets.
Take a look at how blockchain might help business applications. But first, a brief overview of this fascinating technology.
Basics of Blockchain
Blockchains, often known as “ledgers,” are permanent, non-editable digital information recordings. They’re peer-to-peer, meaning there’s no middleman, and they’re duplicated across multiple decentralized computers rather than a single centralized server.
You receive an email with 100 recipients. Although you can delete the email from your inbox, it will remain in 99 other inboxes. You can’t edit the email’s content. It’s unchangeable because of this type of “distribution.”
It’s a clumsy analogy, demonstrating how decentralization fosters accountability and openness. There is no single point of failure since each transaction is owned by multiple entities rather than a single entity. One person cannot go rogue and create changes on their own.
Then a transaction is immediate—a buy, a trade, a deed transfer, or a supply chain hand-off. Fees, delays, processing periods, and third-party scrutiny might be eliminated if there was no middleman. This can be a very effective efficiency.
The Enterprise and Blockchain
The capacity of blockchain to improve certain time-consuming operations is a crucial benefit for businesses. According to Harvard Business Review, blockchain is a foundational technology, not disruptive. Blockchain will improve, not replace, inefficiencies, lack of transparency, fraud vulnerability, and costly delays where they exist. It will almost surely result in new value creation opportunities and business models and a competitive edge for businesses who choose to use it.
A “smart contract” is one of the most common uses of blockchain technology. It’s a conditional digital agreement that’s safe, tamperproof, and legally binding. With blockchain’s speed and transparency, you can streamline transactions.
Transparency and traceability—like an immutable digital paper trail, with increased visibility and verification of transactions.
Transactions that are tamper- and fraud-proof—encryption adds protection to critical data and transactions. This can significantly benefit firms with specific legal, privacy, or regulatory constraints.
Reducing counterparty risk, particularly in complicated agreements involving numerous businesses with their processes.
You can reduce expenses and operational overhead by automating certain transactions and authorization/verification stages. Companies may save billions in operating costs by making steps happen faster and autonomously (without risk).
By reducing key sources of failure, resilience and trustworthiness can be increased.
Streamlining and efficiency—no longer requiring escrow and settlement and middlemen, clearinghouses, or processing partners.
Enterprise Blockchain Protocols that are Open-Source
Developers may now create their own private, permissible blockchain apps, ledgers, and smart contracts using mature, open-source protocols and fully managed services. Among the enterprise-level projects are:
Enterprise Ethereum is a smart contract technology used in a variety of applications and public and private commercial solutions.
Hyperledger: A set of tools and frameworks developed by the Linux Foundation.
Openchain is a business-focused blockchain with a modular architecture that serves as a “generic register of ownership.”
Quorum: A system designed by J.P. Morgan for the financial sector that uses Ethereum Corda Enterprise: Another finance-focused blockchain that supports Oracle and SQL databases and is aimed at highly regulated institutions.
Polkadot is a robust and interoperable blockchain platform with a data availability and validity scheme that ensures the highest levels of security and stability.
Avalanche is another open-source technology for creating interoperable blockchains that focus on money (necessary as more blockchain applications are built and will need to cross-function)
Here is App Cost Calculator for Blockchain app development.
These basic protocols form the foundation; however, a blockchain stack also includes the following components:
Network Oracle The blockchain’s middleware connects it to external resources, off-chain data, payment networks, and other entities. Integrations for smart contracts and real-world enterprise applications are provided by companies like ChainLink, making blockchain even more feasible and scalable.
Transactions are logged and permanently kept in this distributed network.
Layer of storage Because data is rarely stored “on-chain,” an underlying storage solution must be used to store and connect to accompanying metadata over the Oracle network.
The Impact of Blockchain on Data Storage
Depending on the use case, blockchains can be public or private. But there’s one thing they can’t do: alter or delete them. This is the foundation of blockchain technology, and it will have significant ramifications for data management.
This “transactional data” is logged each time a transaction occurs. This could be a purchase receipt, a shipment’s progress through a supply chain, or a currency transaction. Every event is recorded across all nodes. This is referred to as “on-chain” data. Any other transaction-related data, such as shipment information, photos of the purchased goods, date, time, and location, is not saved directly on the chain. This is referred to as “off-chain” data.
So, how can data-driven apps that rely on off-chain data also benefit from blockchain? The answer is decentralized oracle networks. These networks allow blockchain apps to send data off-chain for processing before returning it to the blockchain, where smart contracts may access it.
Then, high-performance underlying object storage will be critical for handling data on a distributed system. Whether on-premises, off-chain, or in the cloud, all data ends up “in a box.” Data is kept in discrete units with a unique key and metadata that specifies the entity’s details in object storage. It follows the blockchain design and allows data to be located on a distributed system regardless of where it is kept.
To be successful, modern blockchain apps require modern data storage.
The requirement for the correct foundation will become more crucial than ever as businesses embrace blockchain. Blockchains and bottlenecks are incompatible. To fulfill these needs, innovators will require a data storage solution that is powerful, elastic, and scalable.
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