Cryptography is the science of encrypting plaintext and decrypting cipher text. There are two methodologies that are used while performing encryption or decryption. These are Symmetric and asymmetric Key Encryption respectively. Symmetric Key Encryption makes use of shared key (one that must be known to both parties in order to complete the entire process). The other, Asymmetric Key Encryption, makes use of two different keys namely a Public Key and Private Key.
The usage of these two keys secures the transactions between the users. Every user is in possession of a Public Key and Private Key. The Public Key of both the users is stored in a repository. Both the keys are dissimilar but are mathematically related. The Sender uses the Public Key of the Receiver (Public Key Host 2) while Encrypting. The Receiver on the other end can decrypt the cipher text using his private key (Private Key Host 2).
A blockchain methodology is a method of encryption using the Asymmetric Key Encryption i.e. making use of two keys for encryption/decryption purposes.
A blockchain is a growing list of records called blocks in cryptographic terminology. These blocks contain the hash code of the previous block, the timestamp, and the data. Block chain first came to be known because of the Bitcoin cryptocurrency. However, the practical use of blockchain is far greater than just a cryptocurrency. After the cryptocurrency it was the turn of the Finance Industry to adopt this technology and the next in line seems to be the start-ups.
There are various benefits that this blockchain technology carries along with it. These are discussed here one by one.
- Financing is one of the biggest hurdles when it comes to setting up a new business. Using the blockchain technology it is possible to gather funds for the business from anywhere in the world. As blockchain is a distributed ledger, funds can be transferred in a few clicks from any location.
- Blockchain can prove to be a great tool while managing the Supply Chain. The origin, quantity, and the movement of goods can be tracked using the blockchain methodology. It will bring ease in the process of ownership transfer, production process assurance, and payments for B2B companies.
- The use of blockchain in business will help start-ups to get better, faster and protected documentation of the business. Manually handling the documents slows down the process. Blockchain can help to automate the process of legal agreements and documentation without involving human beings. This process can be operated as the blockchain comprises of the ‘smart contract’ that is capable of replacing the system of “Download, sign, scan, and email back?”
- To safeguard your data from any type of intrusion or tempering blockchain methodology is supposedly the best solution as the data saved in a blockchain is always secure. As each block is cryptographically tied to the previous block’s information by a digital key it becomes difficult to tamper with the data in the block. If anybody wants to do so, he/she will have to make the changes in all the blocks which seems to be next to impossible. With this process organisations can safeguard their data as well as audit trails. As such the use of blockchain in businesses can help safeguard any confidential data from being stolen or corrupted.
- Transparency and accountability are always required in a business. The blockchain technology can easily provide for both of these at the same time. A public blockchain is accessible to all parties thus leading to transparency in transactions. A block consists of all the data related to a process. This data cannot be changed as long as the other nodes have not given their permission to do so. Nobody can tamper with the data and this leads to accountability.
- Any business whether a start-up or any other form of business, requires manpower to grow. The hiring process can be improved upon if the data of the employees is uploaded to some database. Currently, the scenario for an HR department is quite challenging. They need to verify the details of the employee from the previous company manually. Using this technology countless human hours and resources can be saved which are just being used up in verifying the resume of a job applicant.
- Blockchain can be used to increase the quality of customer support in two ways i.e. Data Cleansing, and Loyalty Programs. CRMs all over the world at some point of time have to handle duplicate data. With blockchain implemented, every company can have their own block that may contain integrated and precise picture of their personal information, past transactions, subscriptions, etc. Hence, a business can avoid the issue of erroneous, outdated and duplicate data records. This consequently brings about better understanding of customers and helps businesses involve them more efficiently.
Loyalty programs are meant for earning profits by adding value to the customer experience. However, due to their variable distance, unstable value and associated privacy apprehensions, they prove to be unwieldy for customers and yield a low ROI. However, businesses can make use of blockchain to strengthen their loyalty programs.
With blockchain, customers would have a single distributed wallet that is compatible with all brands. They would not be bound by the rules and limitations of individual companies and point reclamation would be greatly simplified. The consumer will have a greater control and brands will compete for their wallet by offering them better deals.
Initially, cybersecurity was used by the military and the top computer geeks. However, nowadays, cybersecurity has become a part and parcel of the mainstream IT industry. Wherever IT is involved, cybersecurity can be seen playing its part. Today, whether we are talking of start-ups or large businesses, all need to protect their trade secrets from becoming public. The latest business trend is now focussing on protecting this data using blockchain.
When starting up a business, the most fundamental point is to decrease unnecessary expenses. However, with time the priority shifts to privacy and security of data. A procedure of open and private keys when used together, protected by a layer of cryptography, guarantees that members of blockchain administrations can be confirmed by those same administrations without exposing their most sensitive transactions.
Also, customers can rest assured that their data is not being preyed upon. A start-up that needs to know a client’s credit-card information can do so without spying into other details of the customer.
Some of the companies involved in this business of protecting data using blockchain are:
- Block Armour
- Sentinel Protocol
- Validated ID
- New Banking
There are many more that can be penned up here but these are the once that are leading the table.
A Comparison of Blockchains
Private blockchains tend to be different from public blockchains that are available to any node that wishes to download the network. Those not in favour of Public Blockchains argue that as everyone can download a blockchain and access the history of transactions, privacy is not guaranteed. However, in private blockchains, nodes need to have access to perform any kind of function be it just participating, viewing transactions, or deploying consensus protocols. Transactions listed on a private blockchain ensure an extra coating of privacy. As private blockchains have restricted access, some critics are of the view that as nodes must be specifically selected to view and participate in a network, private blockchains grant more privacy to users. While private blockchains appear to be the best are considered the most realistic way to adopt blockchain technology into business to maintain an option available, it has disadvantages as well. Private blockchains while verifying blocks and transactions resort to specific actors. This puts the procedure back into the hands of a central entity, and as such concerns.
Hybrid blockchains provide greater flexibility in comparison to Private or Public blockchains. A Hybrid blockchain helps us decide which data remain concealed and which data can be shared publicly. A hybrid approach is compliant with GDPR (General Data Protection Regulation) and entities can store data on clouds of their selection so as to remain in compliance with local laws to protect people’s privacy. A hybrid blockchain contains features of both the private and public blockchains. Not every hybrid blockchain may have the same features. Being both public blockchains even, Bitcoin and Ethereum, do not share the same characteristics.
Blockchain was first anticipated as a research project in 1991. Since then it has just seen growth and is about to enter its third decade. Businesses, by now know what blockchain is capable of doing in the years to come.
As of today, blockchain has already many applications for it (and more being explored).Thanks mainly to Bitcoin and cryptocurrency. Blockchain development, in the coming time, is bound to provide a greater level of security to the business and government operations. As we get ready to celebrate the 30th birth anniversary of blockchain, the question to be answered is not “if legacy companies will use this technology” rather it is “how soon they will use this technology”.