Block chain can be defined as the shared, immutable ledger which helps in facilitating the process of recording transactions and tracking assets in a business network. An asset can be tangible including a car, house, and a piece of land, and non-tangible including copyrights, branding, intellectual property rights patents. Block chain ensures the guarantee of safety and anything traded on the block chain can be tracked and reducing the risk of fraud. Block chain is important because it runs the business, which is run on information. The faster the packages or anything is received, the more fastly it is provided to the next party. Block chain is the ideal choice for the transfer of information because it provides immediate transfer on the immutable ledger that can only be accessed by the verified members of the party. A block chain can be traced but the blocks cannot be broken which is why it is preferred by everyone at present time.
Some of the key elements of block chain include distributed ledger technology. All participants of the network have access to the ledger and immutable records of transactions. The immutable ledger helps to record the information of transactions, and it cannot be duplicated hence it reduces the chances of fraud. No one cannot share the information once it is been uploaded to the shared ledger. If there is any error in the transaction, it must be changed to remove the error.
Uses of Block Chain
• NFT makes use of block chain. Non-Fungible Tokens knowns as NFTs are cryptographic assets on a black chain. They have unique identification codes and Meta data which distinguish them from each other. However, the point of interest is that NFTs cannot be traded like cryptocurrencies. . NFTs bear a high potential for many use cases. NFTs are based on block chains, and that’s why they can also be used to identify management, connect artists with the audience, and remove intermediaries.
• Decentralized finance also known as DeFi is a developing financial technology that is based on secure distributed ledgers that have a resemblance to those which are used by cryptocurrencies. One of the best features of DeFi is that it totally eliminates the fee or any other charges that banks and other financial institutes demand to provide their services. With decentralized finance, people have the freedom to hold money in a digital wallet and can transfer money within minutes because it is based on the block chain. The food industry is also making use of block chain because it is a traceable block chain, hence making it a good supply chain without any interruption.
There is a high level of trust in block chain because everything can be traced but the information cannot be changed which makes it a reliable source for use. Along with that, you receive the transaction at the right time which also adds to the reliability of the source. In this, the time wasted in record reconciliation is efficiently eliminated within the system of the distributed ledger.