Blockchain is effectively a way of sharing a database securely across a network of computers. It’s often described as a digital ledger or spreadsheet duplicated thousands of times and stored in a distributed network across multiple locations. This network is designed to regularly and instantly update the spreadsheet or ledger, wherever it is located.
Once a record (block of data) has been added to the chain, it is very difficult to change. And, to ensure all the copies of the database are the same, the network makes constant checks. That means digital information can be distributed, but not copied, and the information is constantly reconciled with the database and updated instantly.
Such reliable, public and verifiable records increase transparency and trust. As there’s no central location and the data exists simultaneously in millions of places, it is also more difficult to hack. Effectively, blockchain technology creates a database (shared by every participant in a network) that stores data that can’t be modified without the approval of all members.
But blockchain is more than just making sure that we all look at the same validated dataset. It also makes it possible to jointly agree and execute on the transactions we want to do with that data, without having to worry whether the other party will keep its part of the deal. This allows us to automate the very thorny issue of transfer of ownership as we can remove the catch-22 buyers and sellers face when interacting with each other: “will I get the goods, will I get paid?”.
This system significantly enhances security and traceability. It also reduces or eliminates the need for third parties to verify the exchange of goods and services. This lowers costs and improves efficiency.
Blockchain and port logistics: a powerful combination