Blockchain is known as “technology of distributed registers” and has a potential to transform the way the companies run their business in certain industry. It is put on all major lists of technology trends. So what is actually Blockchain? How does it work?
Blockchain from company’s perspective
Every business is based on transactions. However, these transactions are often carried out through external intermediaries like banks, lawyers, and brokers, which costs money and time to handle them. Blockchain technology may reduce the role of intermediaries to a minimum by significantly speeding up the transaction process involving multiple players and may reduce the costs while keeping all the parties safe. People, businesses, machines, and algorithms will be able to freely interact and communicate with each other without any misunderstandings. This is what ensured by Blockchain.
How does Blockchain work?
Since the transactions (blocks) are chronologically linked, they cannot be changed without breaking the entire chain of transactions within the network. This chain is replicated and synchronized on each computer using the network (instead of storing it centrally) thereby creating a constant recording system, built-in transparency, and trust between the parties.
Having established an extra level of trust and security for traditional models, Blockchain makes it possible for the parties to have more direct interaction with each other through reduction of the need for certain types of intermediaries. The result is optimisation, more transparent payments and processes of contracting.