The digital economy is constantly evolving, adapting and improving as businesses and brands seek digital solutions to transform their business.
Blockchain has been cited by many as a revolutionary technology that will change how businesses and brands operate now, and in the future. But what actually is Blockchain, and what does it mean for agencies and brands alike?
In our latest interview, Isobar India’s Pratibha Bale explains what the technology is, what it means for digital marketing, creativity and more.
Hi Pratibha! Firstly, what is Blockchain?
Let me start with explaining a traditional centralised database, where every transaction done is recorded onto a single database by a centralised authority. Someone can corrupt the data by hacking into a centralised database and changing its attributes. Whereas Blockchain records transactions on multiple distributed databases, where each database carries the exact information of a specific transaction.
Because of Blockchain’s distributed database set up, it means that people who want to hack specific data would also have to hack 51% of the network databases to achieve that. This would need the computational power of the world’s top 100 super-computers, meaning it’s technically, and financially, not realistic. This is the power of Blockchain.
To better understand the underlying processes of Blockchain, it’s useful to understand the seven key characteristics of a Blockchain:
1. Distributed ledger: Identical copies of all records are shared in the Blockchain. Participants can independently verify information. Verification processes are not dependent on a centralised authority. If one node fails, the remaining ones can continue to operate ensuring constant data availability and reliability.
2. Digital: Almost any type of information can be expressed in a digital format and subsequently be referenced through a ledger entry.
3. Consensus based: Participants in the network collectively authenticate and approve transactions to the Blockchain. There are different methods of reaching the consensus. Generally speaking, a majority of network participants has to agree to the transaction’s correctness, and rules can be tailored to circumstances.
4. Chronological and timestamped: The Blockchain is permanently timestamped, each block points to and refers to the data stored in the previous block in the chain, so all blocks are linked to each other
5. Cryptographically sealed: Blocks are encrypted using public and private keys making them immutable.
6. Irreversible and auditable: Sealed in the chain, blocks cannot be changed. The prevention of deletion, editing, or copying creates true digital assets.
7. Automation through smart contracts: A relatively recent but potentially key concept is the concept of “smart contracts”, which are essentially computer code stored in a Blockchain that can perform actions under specific circumstances. Smart contracts enable counterparties to automate transaction tasks that are typically performed manually and that require the involvement of third-party intermediaries. Smart contract technology can result in processes that are faster and more accurate and cost-efficient.