Blockchain was developed over a decade ago and came into the public domain when Satoshi Nakamoto released the whitepaper entitled “Bitcoin: A Peer to Peer Electronic Cash System.” Even though Satoshi’s true identity remains unknown, the impact his whitepaper has had on technology cannot be disputed. Not only did it launch the cryptocurrency revolution, but it also spawned a whole new solution domain founded on Bitcoin’s blockchain technology.
The rise in blockchain’s popularity is a direct result of the multiple transactional benefits it has created within the technology ecosystem. These include transparency, decentralization, security, and high-availability. However, it is the way a blockchain implements these features which creates the most favorable business benefit of all – cost savings.
Every transaction in a blockchain is visible to all the member nodes of the network which adds absolute transparency into the data, and with transparency comes trust. Also, blockchains remove the need for transactional intermediaries as they are redundant in a system where there is complete visibility into every trusted transaction.
Decentralization is a key blockchain benefit. As there are no intermediaries, blockchains are incredibly efficient. However, this decentralized efficiency benefit does not only apply to financial transactions. A blockchain can be deployed to manage any system controlling an exchange of information. Let’s use a simple example to illustrate this. Let’s assume you have an application which requires users to download data from a server. With a traditional solution architecture, every user must navigate to the server and download this information, and every time the data changes every user must repeat the process. If we implemented the same solution on a blockchain, users would get the same information from a network of peers and, when the data is updated, they would only need to synchronize the change. Not only does this decrease the load on the server, but the dynamic nature of the decentralized network also increases efficiency in the transmission of the actual data.
Blockchain-based solutions also carry the additional benefit of heightened security due to the algorithms deployed in managing blockchain transaction events. All blockchain transactions are cryptographically secured which creates data integrity through immutability. Since changing data obtained in a blockchain is extremely difficult, if not impossible, this cryptographic security enhances the trust in the blockchain and the transactions it manages and stores.
A blockchain consists of thousands of nodes in a peer-to-peer network. Data replication occurs between each node as transactions take effect which updates the blockchain. This network architecture creates high-availability since all information replicates to all nodes. If any node leaves the network, the blockchain retains its data integrity as the full blockchain exists on every node in the system.
Blockchain – Beyond Cryptocurrency
At its core, the blockchain is a virtual, open, decentralized public ledger that records transactions securely and transparently. Although Satoshi created this technology to power Bitcoin, blockchain has found relevance in many other industries due to the decentralized, transparent, and secure nature of its architecture.
In supply chain management, blockchain can help organizations manage item traceability, and blockchain’s public ledger transparency makes quality assurance tracking easier from software development to product manufacturing. Other industries which have found the implementation of blockchain beneficial include accounting, where transaction recording through a blockchain helps eliminate human error, and instant messaging, where the encryption deployed in a blockchain solution helps secure communication while creating an efficient, highly-available platform.
The fact is deploying a blockchain into any industry or application which requires some form of secure, transparent transaction recording and the decentralized nature of its architecture creates a platform which is both highly-available, efficient, and cost-effective. With so many business benefits and limitless applications, the number of industries adopting blockchain to bring down costs while enabling innovative transaction-based solutions is only expected to increase.
Blockchain on Azure
Azure’s global, scalable platform provides multiple services which can be utilized to create, build, deploy, and manage blockchain solutions. Fundamental blockchain architectural requirements like preconfigured networks and infrastructure can simplify blockchain foundational elements and help you develop solutions faster, while Microsoft Azure’s global scale and a wide range of services ranging from web and mobile apps to service buses and databases, can help you build blockchain solutions for any application or industry.
To assist you in creating blockchain solutions Microsoft has developed the Azure Blockchain Workbench. This suite of Azure services simplifies blockchain development by providing a comprehensive solution using several Azure components and can be deployed using a template from the Azure Marketplace. The Azure Blockchain Workbench template lets you choose the different modules and components you wish to implement such as blockchain stack, type of client application, and support for IoT integration. And, once deployed, it provides access to the solution via a web or mobile app.
The modules and components which make up the Azure Blockchain Workbench solution include services such as Azure Active Directory which you can utilize for identity and authentication services. This workbench solution also provides automatically generated client applications for web and mobile, which can be used to validate, test, and view the blockchain application you have created. The inclusion of a REST-based gateway API service allows you to generate and deliver messages to an Azure Service Bus which plays the role of event broker and manages the actual blockchain by passing messages to a Distributed Ledger Transaction (DLT) service. The workbench also provides a storage solution in the form of an Azure SQL database and Azure Storage which you can use to store contract definitions, configuration metadata, and the data stored in the blockchain. Finally, the workbench comes with a monitoring solution in the form of Application Insights which can be used by developers to debug issues, and Azure Monitor which helps you by providing information on the health of the blockchain network.
There is no doubt that blockchain technology has multiple applications which can create opportunities for solutions touching every industry. The realization of what this platform can potentially accomplish is creating a diversified set of new blockchain solutions every day. By harnessing the power of Azure, you can not only build blockchain solutions rapidly and efficiently but also deploy them securely at scale using Microsoft’s global cloud platform.