Deloitte hosted the Blockchain Africa Forum on the 15th of February at their offices in Woodmead, Johannesburg. Deloitte brought in their Blockchain experts from their Grid EMEA Blockchain Lab in Ireland to help de-mystify one of the most controversial and highly debated topics in technology. Leaders of industry from a variety of fields were in attendance.
Cillian Leonowicz, a senior manager of financial services , and Eoin Connolly, senior solution application architect, at Deloitte consulting Dublin broke down exactly what blockchain is and how it will affect various industries.
What is Blockchain?
Blockchain is a highly secure, un-hackable, community based, shared online ledger which enables the transfer of value, giving monetary value in the form of crypto currencies, storage of data, allowing the mass storage of all forms of data and the processing of smart contracts, contracts which will be automatically activated if certain conditions are met. As the blockchain lives on the internet it is accessible to anyone allowing them to interact and transact with one another. This allows for the storing and transfer of assets, identities, contracts and more. The blockchain can either work on an open network, allowing anyone into the chain, or on a private network which will require permission to enter.
How does it work?
A blockchain is a series of interconnected blocks with each block containing transactions, data and a refence to the previous block which creates the chain. The first block forms the basis of the chain with initial data and transaction history recorded. To move to the next block, an agreed upon shared consensus mechanism must be activated. This mechanism includes 4 aspects.
The first one is proof of work, a mathematical operation that is difficult to do but easy to verify. The second aspect is proof of stake which is the use of financial penalties and benefits to encourage good behavior. The third mechanism is proof of authority which is the round-robin validation of blocks by authorised validators, this is for a private network where each person in the network will have a chance to validate a block. The last one is the practical byzantine fault tolerance, this consensus mechanism requires 67% of agreement by authorised validators.
What makes blockchain different?
There are three compelling facets of blockchain which sets it apart. Firstly, it is immutable, meaning that you cannot change any existing blocks but can only add new ones with updated information. Secondly, it is shared, allowing everyone to view all the blocks and all the transactions and thirdly it is decentralised, with no central authority allowing for peer-to-peer interaction by cutting out the middle man.
What does blockchain enable?
Blockchain allows for the simplification of various types of transaction. Blockchain opens various opportunities through disintermediation, the removing of third party data conduits and trustees that add no direct value to the deal, shared trust where all parties share the same immutable data platform with full data audit capabilities, decentralisation which is the peer-to-peer between organisations with shared authority. These aspects give people using blockchain the ability to process transactions with a piece of mind as they can track every aspect of the deal.
Although blockchain technologies are still in the initial stages of development the opportunities that the real-world application could create will change the way that the world works.
By Dean Workman
Looking forward to the death of greedy stand-in-the-way aka middle-men in transactions