Internet has revolutionised many lifestyles. It is becoming increasingly clear that the Blockchain follows the same path.
Indeed, the Blockchain is beginning to seriously interfere in the business world, because a large number of companies today wants to use this technology. More precisely, the Blockchain offers many advantages: traceability, security and improvement of the Business Model, advantages that make it possible to transform and facilitate the working conditions in as many and varied fields (finance, legal and administrative, trade, medical, real estate, etc.).
However, to fully understand the scope of its benefits and its multi-sectoral application, it is important to understand the basics of how this technology works. Equisafe therefore proposes to demystify the Blockchain and make it understandable to the greatest number thanks to a simple vocabulary and concrete examples. To do this, we will publish a saga whose first episode will cover the operation of the Blockchain which introduces better traceability than current systems.
First of all, the Blockchain is developing on the existing internet network and is creating new uses intended mainly to exchange value.
The players who wish to exchange value make transactions * on the Blockchain, transactions that may be of different natures (for example relating to a monetary value, or to financial assets or other financial instruments).
The validity of any transaction is verified by the nodes * of the network (a node is actually a computer) that can be managed by miners * (who are either individuals or companies) to secure the Blockchain.
Indeed, the role of the miner is to validate a block * (through a computer process) that will include all the informations relating to the transactions in question (in particular the date, type of transaction or the type of values).
This block is then added to the preexisting block chain. Each new block encapsulates the information of the previous blocks. The updated transaction history is then visible to the entire Blockchain user network.
On Monday you bought 4 apples, and you want to let your family know about it before the traditional accounts at the end of the week. So you register on the Blockchain on the Monday that you bought these 4 apples. The first block is created. Tuesday, you buy 4 pears. You will then register a 2nd block on the Blockchain (including the purchase information of these 4 pears) which is added to the 1st pre-existing block (including the purchase information of the 4 apples).
Wednesday, you buy 4 bananas. So you will create a 3rd block (including the purchase information of these 4 bananas) which is added to the first block (the purchase information of the 4 apples) and the 2nd block (the purchase information of the 4 pears).
At the end of the week, the entire family can have a real traceability of what you bought during the week by checking the transaction log of the Blockchain.
It is this sequence of blocks that you have created which constitutes a ‘’Blockchain’’. Traceability is maximum, especially since your family members may not necessarily have to wait until the weekend to see the status of your purchases: for example, if they want to know Wednesday night what you bought , namely 4 apples on Monday (block 1) and 4 pears on Tuesday (block 2), this is possible because the time to record transactions and therefore blocks on the Blockchain is almost instantaneous.
Finally, traceability has the advantage of being applicable to all types of sectors and domains:
- supply chain (to record the inputs / outputs of the company’s products);
- medical (to trace patient information in the form of an electronic health record);
- legal (to keep and date evidence in electronic form), etc.
It is therefore this multi-sectoral application that constitutes the strength of traceability, and even more so that of the Blockchain.
Equisafe has positioned itself to take full advantage of traceability. Indeed, since the decree of 24 December 2018 relating to “the use of a shared electronic recording device for the representation and transmission of financial securities”, securities movement ledgers of companies can be dematerialised and therefore registered on the Blockchain. Every user of the Equisafe platform that digitises their ledger can access it instantly and easily modify it. The history of the movements of titles of each register is kept completely secure thanks to the Blockchain and is then immediately accessible for all the members authorised to consult it. In the end, this technology offers the opportunity to replace the current rather time-consuming methods of recording the movements of titles on an Excel document or a paper register.
Beyond traceability, the Blockchain offers a considerable advantage: that of establishing a much greater security for the recorded data than the current systems. It is also the decentralised nature of the Blockchain that increases this security, which we will see in the next episode.
For more information, visit Equisafe.io!
Transactions: operations recorded on the Blockchain that may be of different natures, such as the exchange of financial assets or the certification of a contract between several parties.
Node: computer connected to the Blockchain network. The nodes retain a copy of the Blockchain registry and are spread across several distinct geographic locations.
Mining: use of computing power to process transactions, secure the network and allow all users of the system to stay in sync. This operation is allowed thanks to the Miner: person (company or individual) who connects on the Blockchain one or more computer machines equipped to carry out the mining.
Block: includes all transaction information (date, transaction type, value type, etc.).