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Blockchain technology and other cryptocurrencies have the potential to change the data world in a massive way, considering that blockchain immutability allows the content that’s present on the ledger to remain unchanged, making it safe and secure.
In simpler terms, the immutable ledger that’s present within a blockchain makes it extremely difficult for hackers or data thieves to alter the data that is present within a network, allowing data holders or users to have access to high-tech security platforms that are capable of keeping their personal information or data safe.
One thing that you might have noticed above is that we have used the term immutability a lot, and for those that are new to blockchain technology, having a proper understanding of these two is a must so you can know how this works and what they are.
When talking about these two, a lot of questions arise, which include “what are immutable ledgers, and why are they important for a decentralized blockchain ecosystem?”
To help you answer those questions, we have created an in-depth overview of immutable ledgers and why they are vital for decentralized blockchain ecosystems.
What Is Blockchain?
Before we talk about anything else, let’s talk about what blockchain is..
Blockchain is a digital list of data records, which is composed of a lot of blocks that are all organized in chronological order, and are linked and secured by cryptographic proofs.
All the transactions that are carried out through blockchain technology happen within a peer-to-peer network of distributed computers, which are also known as nodes. All these nodes contain a copy of the blockchain and they contribute to the functioning and security of the networks, making it a decentralized digital currency that does not have borders, is censorship resistant, and does not require the intermediation of a third party.
And as a DLT (Distributed Ledger Technology), blockchain is intentionally designed to be highly resistant to frauds, and alterations, meaning that all the data that’s present in the network will not be altered or tampered with.
How Does Blockchain Work?
With blockchain, each transaction is required to write a new block of data in the blockchain and that specific request is broadcasted to all the nodes that are present or are participating in the blockchain.
Once that happens, every participating node in the blockchain will automatically check the hashes against certain algorithms in order to validate the transaction.
The nodes are going to perform a proof-of-work process, achieve consensus on the validity of the new block and once the consensus is approved, the block will be added to the chain.
Hence, blockchain.
What Is An Immutable Ledger?
The word immutable itself means that it cannot be changed, and when it comes to the word ledger, it is just a term that’s used for the word record, like a record of something.
This means that an Immutable Ledger is a record that will not be changed. And you might be asking, how is Immutable Ledger connected with Blockchain?
The thing is, blockchain technology introduced the immutable ledger. But the question remains, how does blockchain ensure immutability and how does it keep your data safe?
With blockchain, the foundation is called the hash, and the hash, which is a digital signature, will change if anyone tries to make changes to it, and once the hash changes or will no longer match the previous one, the blockchain will automatically reject it, making it null.
A similar process to that is a cheque getting voided in the bank when the teller realizes that something is wrong with the cheque that they received from an individual.
After multiple failed attempts, the hacker in the end will be required to change a block, and once the process fails, again and again, he would basically have to try and alter an entire blockchain, which is impossible or next to impossible considering that blockchain is present on multiple networks across the globe.
So basically, in order for a hacker or data thief to get the data that’s being carried within a blockchain network, they would have to make all the changes simultaneously and would be required to hack into all the computers across the globe, which is literally impossible, making the ledger immutable.
In simpler terms, you cannot change the information that’s present in a blockchain.
The Importance Of An Immutable Ledger In Blockchain
The thing with Immutability is that it offers a layer to scaling solutions for technologies such as blockchain, which brings a lot of benefits to the table that include:
Ownership Options
The thing with creating a Non-Fungible Token is that numerous parties can own a stake in it or a single person can own it, and so can multiple parties.
Tight Security
The immutable ledger that’s present on the blockchain is pretty secure.
Remember, with blockchain, there is no central point of authority that’s controlling it, which means that if hackers try to hack or compromise data, it would be impossible considering that it is being managed by more than one server or node.
The immutable ledger also ensures the transparent flow of data while prioritizing data protection and keeping it safe from being corrupted allowing accurate data history.
Authenticates Products
Because blockchain ensures high-level security and traceability, you can simply start tagging items on the blockchain, and buyers of certain products can know if the item that they received is authentic or not.
With blockchain, registering items in the system will allow the manufacturer to provide information that would ensure product authenticity considering they would be handing out data that can show the origins of the products, their historic records, and current and previous owners.
This assures that the buyer is getting the right product after purchase as they can take a look at all the records necessary to be shown.
Quickly Share Data
One of the best uses of the immutable ledger on the blockchain is in the supply chain management sector.
The thing with exchanging goods is that keeping track of everything can be pretty hard, and during transportation, it is very likely that there’s a high chance that something might get lost, misplaced, stolen, or damaged.
And the problem with logistic companies right now is that a lot of them are still using retro tech, but with the implementation of blockchain, they can quickly share data in a single network, which allows accurate and fast-tracking.
Better Privacy
Privacy is what everyone wants these days, and with the proper implementation of blockchain in the latest tools and platforms that are used by everyone, people can experience better or enhanced privacy while using the internet.
Remember, blockchain is anonymous, and every user that is present within a network is protected with encrypted codes, which makes it impossible to detect the information that they hold.
Blockchain Use Cases
Despite being designed to operate as a distributed ledger on decentralized systems, this technology can be possibly deployed in centralized systems too, which can ensure data integrity and even reduce operational costs.
Right now, blockchain technology can be adopted or even implemented in healthcare, insurance, supply chains, and many more.
Blockchain will be used and can be used in a lot of sectors when incorporated in the right way, which includes:
Finance: Bookkeeping
The financial market is currently one of the earlier markets that are known for adapting blockchain technology.
Right now, blockchain technology is used for bookkeeping, which has replaced traditional electronic ledgers. It is also used in keeping data safe along with providing accurate transaction history.
Government: Documents And Records
Not only in the private sector but because of how efficient and safe the blockchain technology is, governments across the globe are trying to implement this technology to benefit the people that they serve.
Currently, blockchain technology is used to hold and provide documents and public records.
Supply Chain: Tracking And Exchange Of Goods
Another usage of blockchain technology can be implemented in the supply chain industry, where it can do a lot of things.
When implemented correctly in this market, it can offer a lot of help in tracking data, support billing, managing quotas, and even transparency in the exchange of goods or services that are offered by businesses.
Healthcare: Hospitals And Records
The healthcare industry is currently using blockchain technology to hold and protect the data that they have with them.
From patient data to payments, schedules, and the services that are being provided by doctors and the hospital itself, everything can be safely stored inside a blockchain network.
Technology: Networks In Smart Cities
Blockchain technology is mainly used to store data so it can be kept safe and would not fall into the hands of the wrong people, and with the right implementation of this technology in the future, it can be used in smart cities.
With secure data platforms or networks, blockchain technology can securely process data that is offered by computers, vehicles, robots, factories, and even drones so it can be tracked, viewed, and understood by users.
What Is The Future Of Immutable Ledger In Blockchain?
Depending on the industry that it is in, the immutable ledger in blockchain is going to bring a lot of benefits to the table thanks to the efficiency, security, and transparency it offers.
Right now, it is best used in creating systems that would help in the distribution of goods and information while keeping everything secure and transparent. Not only that, but it also solves a lot of issues that are present in areas such as authenticity, security, traceability, and keeping personal data safe.
While the future for immutable ledger in blockchain remains clear that it would be present in a lot of systems, there’s a lot more to look at in the years to come.
Try to keep this one in your mind.
Tech or market giants such as Microsoft, IBM, Walmart, and even MasterCard (yes, the credit and debit card providers) are also implementing blockchain technology in their day-to-day business operations to improve and solve issues that are present in authenticity, keeping personal data safe or even in offering accurate data tracing.
With that alone, you can be certain that this technology is going so far.
It is also to be noted that everything is still in the initial phases of implementing this technology in as many markets as we can.
Remember, developers, are still finding ways to properly implement them into real-time user applications.
