Blockchain

Blockchain definition

Blockchain is a shared, immutable ledger used to record transactions and track assets across a business network. Assets can be tangible (e.g., vehicles, land) or intangible (e.g., intellectual property, digital rights). It enhances trust, reduces risk, and increases transparency among participants.

Inefficiencies in Traditional Transaction Systems

- Cash is limited to small, local transactions and lacks traceability.

- Settlement delays due to multiple approvals and reconciliation.

- Duplication of effort across ledgers and reliance on costly intermediaries.

- Centralized systems are vulnerable to cyberattacks and fraud.

- Exclusive and expensive payment gateways prevent easy access for many.

- Half the global population lacks access to formal financial systems.

- Shipping and supply chains suffer from low visibility and manual tracking.

Sharing and Peer-to-peer replication works

In blockchain, every participant shares the same ledger, updated in real-time via peer-to-peer replication. This reduces redundancy, eliminates intermediaries, and increases consistency and security across the network.

Characteristics of Blockchain: consensus

All relevant parties must validate a transaction.

Characteristics of Blockchain: provenance

Origin and history of assets can be tracked.

Characteristics of Blockchain: immutability

Records can't be changed once added.

Characteristics of Blockchain: finality

One version of the truth; transactions are confirmed and final.

Blockchain use case- Car leasing

Without blockchain, each party keeps separate records, leading to duplication and inconsistency. With blockchain, all stakeholders share one synchronized ledger. Smart contracts automate asset transfer, and real-time visibility improves trust, efficiency, and auditability.

Bitcoin vs. blockchain

Blockchain is a general-purpose technology like an operating system. Bitcoin is one application of it. Blockchain supports use cases beyond cryptocurrency, including identity verification, supply chains, and smart contracts.

How Blockchain Builds Trust: Distributed and Sustainable

No single point of control; network remains resilient.

How Blockchain Builds Trust: Secure, Private, and Indelible

Data is protected and tamper-proof.

How Blockchain Builds Trust: Transparent and Auditable

All transactions are time-stamped and verifiable.

How Blockchain Builds Trust: Consensus-based and transactional

Trust is earned algorithmically.

How Blockchain Builds Trust: Orchestrated and Flexible

Smart contracts ensure consistent, automated execution.

Basics of How Blockchain Works

Blockchain is a digital chain of blocks containing transaction records. Each block links to the previous using a cryptographic hash. This makes tampering detectable. Every participant has a full copy of the blockchain, and new transactions are added only through consensus.

Key Components of Blockchain: Shared Leger

One source of truth across the network.

Key Components of Blockchain: Permissions

Role-based access controls.

Key Components of Blockchain: Smart Contracts

Self-executing business logic.

Key Components of Blockchain: Consensus

Ensures trust through validation before addition.

Blockchain and Market Frictions: Information Friction

- Shared ledger and permissions reduce miscommunication and data silos.

- Cryptography and consensus ensure trusted data validation.

Blockchain and Market Frictions: Interaction Friction

- Peer-to-peer transactions, smart contracts, and real-time updates streamline processes.

- Eliminates intermediaries and manual coordination.

Blockchain and Market Frictions: Innovation Friction

- Modular, upgradable design enables new business models.

- Automates compliance and regulatory workflows.

Blockchain and Market Frictions: Institutional Friction

- Built-in audit trails and permissioned access aid regulatory compliance.

- Identity systems and smart regulations ease onboarding and governance.