Join me as we unravel this fascinating concept together. I don’t mean to take you back to your accounting class, but let’s talk about ledgers. Ledgers are at the foundation of an intriguing concept that’s reshaping the way we think about technology and our daily lives: blockchain.
The Heart of Financial Institutions
Now, you might wonder, what does a ledger have to do with blockchain? Well, think of a ledger as the heartbeat of any financial institution, much like your favourite bank. It started out as a big book where every financial move was recorded, from deposits to withdrawals, and only top banking officers had access to this ledger. You can picture it as a financial diary.
In traditional banking, these ledgers are centralised. The bank holds the record of all transactions. They’re the gatekeepers of your financial history.
This approach can lead to inefficiencies, delays, and a lack of transparency. Remember the time you transferred money, but it never went through, and you were debited? Only the bank could trace where the money went because they had access to the behind-the-scenes records. This is the foundational principle of blockchain.
The Blockchain Ledger: A Decentralised Wonder
Imagine this ledger that’s not locked within a single bank but is accessible to everyone, free from the control of a single institution. This is the reality of the world of blockchain. It’s a digital ledger shared across the world. Every entry in this ledger is like a piece of a puzzle, known as a “block.” When one block is filled, a new one seamlessly takes its place, securely linked together, forming what we call the “blockchain.” It’s a transparent system where anyone can see, and most importantly, no one can secretly tamper with or erase entries.
Read also: ‘Lack of regulatory framework slowing blockchain adoption in Nigeria’
How does this work?
DLTs (Distributed Ledger Technologies) are super-secure digital ledgers. In this digital diary, everything is locked with special keys and secret signatures. Once you write something down, it’s almost like etching it in stone. Nobody can change it, and that’s because the ledger is governed by special computer rules.
Now, the exciting part is that there are copies of this ledger on many computers, not just one. These computers are like your friends, and each has its own copy. If someone tries to mess with one copy, all your other friends will know because they have their copies, too.
To make sure that everything is right, and no one is cheating, your friends need to agree to every change made. Only when they all say, “Yes, it’s good,” can the new entries be locked in the diary forever. That’s why we call it a “blockchain,” because it’s like a chain of digital ledgers.
Industries Using Distributed Ledger Technology
Distributed ledgers are like super tools for lots of businesses, helping them work better. Think of them as a secure platform where different businesses can interact and increase productivity. One of these super tools is called Hyperledger Fabric, famous for its flexibility and ability to fit into many industries.
Industries currently benefiting from blockchain technology include:
1. Real Estate
2. Utility companies
3. Healthcare
4. Logistics
5. Art and Fashion
These industries are using blockchain to transform the way they do business. Blockchain technology is spreading fast, permeating every industry and facet of our lives at a foundational level. The impact of blockchain is now beyond securing financial transactions. It’s not just about new technology; it’s about creating a more transparent, efficient, and rewarding business world for everyone.
Guess what? You don’t need an extensive background in technology to benefit from this technological revolution. Next week, I’ll show you how blockchain is transforming the world of music, fashion & art. See you soon!
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