z Systems Solutions Consultant
A new technology is emerging for the digital age, and whether you’re a CEO or an IT developer, you’ll want to pay close attention.
Banks, Insurance companies, hospitals, governments and other industries are searching for new ways to do business-to-business financial transactions. This is driven by the need for a rock-solid cybersecurity solution that is easier to manage, and costs less compared to today’s complex systems and the manpower required to maintain and balance the facts behind transacting. This need has driven the evolution of Blockchain. So, what is Blockchain?
What is Blockchain?
Blockchain was invented by Satoshi Nakamoto in 2008. Bitcoin was the first use of the Blockchain technology, implemented for digital cryptocurrency. This Blockchain technology eliminated the need for a trusted authority, the third-party middleman (i.e. the central bank), on financial transactions. By its design, Blockchain supports secure transfer of more than this digital wallet. Property deeds, mortgages, car sales, patient information, music, food, etc. all can be managed through the Blockchain technology. Since 2008, the Blockchain technology has evolved quickly in the implementation of the secure ledger and secure smart contracts, which are the cornerstone of Blockchain’s attraction.
Blockchain is evolving as an open source project. Like Linux, it is developed by the open source community, where hundreds of contributors are driving the rapid development. Blockchain technology is designed for a distributed digital ledger. Each participant owns a duplicate of the ledger, each ledger mirroring the state of the transaction. Its security is insured by the fact that it is not possible to modify the distributed ledger without the knowledge of all participants. There is no central store of the ledger for hackers to commit fraud and no single point of failure of the ledger. If one participant encounters a computer failure, once recovered, it uses the peer-to-peer communication to re-sync its ledger with its peers’ ledger. It is this architectural design that makes it so secure.
A transaction is a continuously growing list of blocks, which are linked together and secured using cryptography. Each block contains a cryptographic hash of the previous block, along with a timestamp and the transaction’s data. These blocks are stored in the digital ledger.
The smart contract defines the participants that are recipients of this transaction’s blocks. It also defines the conditions for the asset transfer. This design is a permissioned implementation. New participants to the smart contract are added only at the approval of the current parties, approved by majority or unanimous votes. For permissioned Blockchain, there is a network administrator that controls the invitation of the new participants.
There are two other types of Blockchain besides permissioned, which are Public, or permissionless, and Consortium. In Public Blockchain, any internet user can use the Blockchain network. This is Bitcoin’s implementation. In the Consortium, though still permissioned, there is no central network administrator that controls the participants entry.
In February of 2016, the Linux Foundation opened a project called Hyperledger. More than 230-member organizations belong to the Hyperledger project. IBM joined the Hyperledger Project as a premier member. IBM then opened, in July 2016, its own Blockchain innovation center. The Hyperledger project is devoted to the enhancement of the Blockchain framework and tools needed for the development of the Blockchain business network. IBM has endorsed the Hyperledger Fabric product that evolved from the Hyperledger Project. With Hyperledger Fabric’s March 2018 Version 1.1, IBM is offering a production-ready version of Blockchain for enterprise’s information technology use.
IBM’s Blockchain implementation includes the tools needed to develop and manage the Blockchain business network, as well as link through APIs to enterprise applications. Hyperledger Composer is the development tool. Hyperledger Fabric includes the Blockchain implementation and tools, both operations and governance, needed to manage the Blockchain business network. IBM publicizes its Blockchain implementation as a shared, replicated, permissioned ledger with characteristics of consensus, provenance, immutability and finality.
The next Blockchain BLOG will dive into IBM’s Hyperledger Fabric implementation and its availability to your enterprise.
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