Blockchain: A computationally efficient trust engine

Blockchain technologies are made up of several underlying technology components including cryptography, public key systems, and distributed ledger technology. They also include databases and peer-to-peer networking.

All these technologies are within the stack of blockchain technologies. The Bitcoin Blockchain is a technical application of distributed ledger technology, which itself incorporates features of cryptography and public key systems.

All blockchains are instances of distributed ledger technology but not all distributed ledgers are blockchains. These interdependencies are illustrated below for the Bitcoin Blockchain:

 

 

Artichoke 300px.jpg

 

 

  1. Cryptographic systems encrypt messages, documents, or transactions, which enables them to be immutable and secure

  2. Public Key Systems make use of public and private keys to identify users and allow them to send, receive, and read messages, documents, or transactions

  3. A distributed ledger is a database that records transactions and is distributed across network participants. It holds the golden record of transactions

  4. Blockchain is a type of distributed ledger using peer-to-peer networking; it operates offline, timestamps transactions, and links them together

Enhanced Security


Information, decisions and transactions always approved by an agreed collective and are irrefutable. Records cannot be changed or altered

more »

Reduced Cost


A shared, encrypted, transparent database reduces the need for people to authenticate and approve speci
c transactions

INCREASED SPEED


Details of all transactions are made available to all parties instantly and negate the need for relational databases and end-of-day batch reconciliation. DLT can also automatically confirm user identity and permissions to speed up onboarding and other workflows

more »

VISIBILITY


Transactions can be monitored in real-time and as transactions are completed

more »

REDUCED FRAUD


Multi-node consensus mechanism makes it difficult for fraudsters

IMPROVED REPORTING


Allows real-time auditing and compliance reporting