Users of computer services in Ottawa who have had their interest piqued by blockchain and it uses are probably wondering how the technology works and how it removes the need for trusted third parties, amongst other things. While it is still in the technological nursery many are speculating that the blockchain will change drastically the means in which goods and services are availed. With this in mind, businesses using external IT consulting in Ottawa will no doubt benefit from a basic understanding of how the technology works.
As mentioned in the previous article, blockchain is a distributed ledger, where validation of records is performed by nodes on the network through complex computations. One of the main features of the blockchain is the lack of need for a third party, trusted by the 2 parties involved in the exchange being recorded. Companies that use tech services in Ottawa will no doubt be put off the blockchain by the apparent lack of integrity, but the blockchain has quite a genius mechanism to preserve integrity. Here is a brief explanation of how blockchain technology works and how it preserves integrity.
As mentioned previously, a block is computed and validated by nodes on the network. Before a block is added to the chain, a cryptographic hash of the previous block is added to the block and then that block is hashed. This hash will then be added to the subsequent block. This means that if an attacker of the blockchain was to try to alter a block in the chain, they would have to alter all the subsequent blocks in the chain. On top of this, each of these altered blocks would also have to have the highest rated computation. This means that an attacker would have to own the majority of nodes on the network (technically possible with a botnet, but with the number of nodes on the blockchain network nowadays, it would be one the biggest botnets ever and would be bound to draw some attention). Another implication of this protocol is that as the blockchain network grows, each record is less likely to be altered, and thus genuine.
This provides a layer of security and trustworthiness that a bank, or another third party, can not offer. Banks tend to have centralized servers for transactions and it is very possible for one of these servers to be compromised. So what does this mean for users and providers of managed services in Ottawa? It means that the hefty costs of incorporating a trusted third party into an exchange can be essentially eliminated and replaced with the relatively tiny cost of being a part of a blockchain network. It means that verification processes, such as that of a potential employee’s qualifications, can be streamlined and less time consuming saving money in the form of the time saved.
The blockchain is one of the rare technologies that has the distinction of financial institutions being the earliest adopters. All companies that use IT in Ottawa should know how uncommon such a move is. Banks are subject to many security controls due to legislative and insurance obligations and are usually one of the last sectors to incorporate new technologies. To have such organizations involved in the first stages of mainstream integration, should give an indication as to how secure the technology is and how promising it will be in the future. Of course, financial transactions are not the only forms of exchange that can be revolutionized by the blockchain. In the next article, we will discuss other uses for the technology.