What is a Blockchain?
Blockchain is a system for collecting data that cannot be altered or changed.
A blockchain is defined as a digital, distributed ledger that centrally tracks the source of transactions and digital assets. Data on a blockchain is immutable, making it nearly impossible to modify. Essentially anything of value, tangible or intangible, can be tracked and recorded using blockchain technology.
Why is Blockchain Technology Important?
Obtaining fast, secure, and accurate information is vital. These are all key characteristics provided by blockchain technology. A blockchain stores transactions instantly and displays data transparently on an immutable ledger. Permitted network participants all share and manage the single view of the ledger, instead of information being traditionally copied and transferred.
Beyond the matters of truth, the technology offers enhanced security, greater efficiency, and allows immediate traceability.
Properties of a Blockchain:
How Blockchain Works
One key aspect that separates a traditional database from a blockchain is how the data is structured.
In a blockchain, transactions are recorded as “blocks” of data. These transactions capture the movement of an asset. Each block collects the information of your choice, typically relating to who, what, when, or by how much an entity changes. Once the information is collected, the irreversible block of data links to the previous block. The structure continuously repeats and each new block connects to the ones before and after it, forming an immutable chain. This chain of data is what is known as the “blockchain”.
Each block of data is uniquely identified by a cryptographic signature, called a hash. The hash serves as a timestamp, noting the exact date, time, and sequence of every block on the chain. The unique hash value given for every block makes the data permanent. It also secures the sequence, meaning new blocks cannot be inserted between two existing blocks on a chain.
Removing the element of manipulation protects the integrity of every transaction and creates a ledger that all network participants can trust.
Benefits of Blockchain
At its core, blockchain provides organizations with an efficient record-keeping system that cannot be altered, cheated, or hacked.
One of the leading benefits of blockchain is enhanced security. Data accuracy is essential, and blockchain preserves the integrity of every recorded transaction. Nobody, not even business owners or administrators, can modify or delete a recorded transaction.
Every record is individually encrypted and carries a unique hash ID. This provides an added layer of security to the information stored on the network. This means if one block is changed, the hash ID wouldn’t align with every other block in the chain, making the change immediately obvious. A successful hack would require updating the timestamp and hash codes for every block in the chain, across every distributed ledger of the blockchain. A malicious attack to that extreme would require an immense amount of money and resources to even attempt.
Another beneficial aspect is greater trust. Trust is established by providing full transparency. Blockchain uses a distributed ledger, which allows all permitted network members access to the same information at the same time. A transaction ledger open to all members adds an unprecedented layer of accountability. In addition, all records receive a hash ID. The timestamp ensures data integrity and essentially eliminates any opportunity for fraud.
Blockchain technology also improves efficiency. Having a distributed ledger that is directly shared among members removes the need for third-party mediation or time-consuming reconciliations. By streamlining processes, transactions can be completed faster. In addition, to further add to its efficiency, a blockchain is programmable. This allows a set of rules, called smart contracts, to execute when certain conditions are met. For example, smart contracts could enable the sharing of hospital records among providers or insurance agencies when/if certain criteria were met, resulting in better accuracy or faster settlements.
Using Blockchain Across Sectors
You’ve likely heard the term blockchain associated with crypto. The truth is, the hype about blockchain technology goes far beyond the world of cryptocurrency. The benefits apply to nearly every sector:
Operational efficiency in the banking and financial industry dramatically improves with blockchain. It allows institutions to replace traditional, manual processes with faster, automated solutions. Having point-to-point transfers of funds removes delays and increases the speed of global trade, consumer banking, lending, settlements, and much more.
Now more than ever, the healthcare industry faces constant scrutiny when it comes to managing sensitive data. Blockchains provide increased security for patient records but also simplifies the process of sharing records with providers, payers, and researchers. Blockchain technology helps play a vital role in patient consent management, drug traceability, clinical trials, and securing patient information.
Supply Chain –
In the supply chain sector, blockchains can be used to track goods from manufacturers to distributors. The technology builds trust between partners by improving traceability and visibility. Participants can act faster following disruptions, creating an all-around more resilient supply chain industry.
Blockchain in the retail industry allows companies to accurately manage their inventories, supply chains, and even customer loyalty programs. Retailers gain immense transparency into their goods, helping to confirm quality, authenticity, and product safety. Suppliers can also use blockchains to track their inventories, minimize waste, and better meet consumer demand.
Although the technology doesn’t prevent crime, it can help expose evidence of government corruption. The authenticity, immutability, and transparency of data on a blockchain can play a pivotal role in addressing the risk factors with public procurement, electronic voting, land or corporate ownership, and the disbursement of funds.
Blockchain Technology and Transaction Monitoring
Sentinel leverages blockchain technology with PeopleSoft transaction monitoring.
The application enables permitted members to view a central, immutable ledger of all PeopleSoft transactions and data changes from multiple sources. Organizations can customize transaction categories and tables to meet their individual compliance or security needs. Transactions link to user accounts and provide a record of updates made by and to a user.
If you’d like to receive more information on Sentinel’s transaction monitoring functionality, please contact a member of our team.