What is Blockchain?
In current business model ,each party keeps a record of all the transaction between all parties that they interact with. This process is expensive as it needs huge effort and makes the data redundant .
Blockchain provides a trusted and distributed ledger with shared business process and parties.It allows any participant in the business network to see the one system of record or ledger.This concept makes business more efficient to transfer goods and services .
Business networks ,wealth and Markets needed in Blockchain
To use blockchain concepts in a business model we need business networks ,wealth and markets .
Business Networks: It benefits from Connectivity
- Participants are customers,suppliers,banks and partners
- Cross geography and regulatory boundary
Wealth: It is generated by the flow of goods and services across business network in transaction and contracts
Markets: They are the main part of this whole process
- Public Market ( Automobile,Vegetables ,Fruits )
- Private Market (Supply chain financing ,bonds)
Assets in BlockChain Business
Asset is anything that can be owned or controlled to produce any monetary value.
- Tangible Asset
- Intangible Asset
Ledgers used in Blockchain
Ledger are the system of business records which keeps tracks of activities that happening in business.
Transaction It is an asset that is transferred onto or off the business ledger.
Contract :It is a condition through which transaction will occur
Blockchain Components for Business
There are four main components which should be considered for having blockchain for business
- Smart Contract
Business terms embedded in transaction database and executed with transactions.It contains the business logic for the blockchain.
It is the business rules implied by the contract which is embeded in the Blockchain and executed with the transaction. Contract is verifiable and signed when distributed across the network .
It is written with the help of programming language so that it can be used as an application. When the proper conditions are met contracts will execute.
An example can be contractual condition under which corporate Bond transfer occurs
- Shared Ledger It should have a append-only distributed system of record shared across business network .
It is shared among participants
who have their own copy through replication. Records are permissioned so that participants can see appropriate transaction. It is the shared system of the records in Blockchain
It is a way of controlling confidentiality within the block chain so that participants can see only the parts of the ledger that they are supposed to see. It should ensure appropriate visibility of the transaction . Transaction should be secured , authenticated and verifiable using a cryptography technique. Ledger is shared among the participants but requires privacy to do that .
Participants need appropriate confidentiality between subsets of participants.
Participants don’t need the identity linked to a transaction.
Transactions should be endorsed by the relevant participants .
Ledger is a trusted source of information in which participants can endorse transactions. Once the business network decides what to endorse ,it is added to the ledger with appropriate confidentiality.
To maintain trust ,assets will have a verifiable audit trail such that transactions cannot be modified ,inserted or deleted. All the transactions are archived through consensus ,provenance ,immutability and finality.
Benefits of Blockchain in business
Efficient Time saving Transaction time decreases from days to near instantaneous.
Reduction in Cost
Overhead and intermediaries cost gets reduced .These cost are mainly the internal and external auditing cost.
- Reduction in Risk
It reduces the tampering, fraud and cyber crime within the business network.
- Increase in Trust
Trust is increased through shared processes and recordkeeping as all the relevant parties can observe the transaction in real-time. All the business transaction are shared through a distributed ledger so that all the participants can observe it.
Blockchain Use Cases
- Trade Finance
- Cross Currency Payments
- Asset Registration
- Citizen Identification
- Medical Records
- Medicine Supply
- Supply Chain
- Loyalty Programs
- Information Sharing(Supplier/retailer)
- Medical claims Processing
Medical claims procesing is a complex process as it involves multiple parties like clearing houses and Insurance Providers
- Risk Provenance
- Asset Usage History
- Claims File
- Supply Chain
- Product Parts
- Maintenance Tracking
Key Players for adopting Blockchain Technologies
Regulator Industry Group Market Maker