Block-Chain Technology: Distributed Ledger Technology
Block-Chain Technology: Since the day of clay tablets, people have recorded the exchange of goods and services as we evolved into the digital age. Recording these transactions have become much more complex whether it is the exchange of money between the two parties documenting how goods move through a supply chain or making contractual agreements. The global commerce and trade happened in past few years have created a contrasting ledger system exposed to errors, frauds and misinterpretation.
Take the diamond industry for example. The journey of a diamond manufacturing has a complex landscape of legal regulatory, financial, manufacturing and commercial practices. Current supply chains have to rely on every step of the way from government officials to lawyers, accountants, dealers and banks.
This leads to the heavy expenditure of time and cost and the diamond smuggling and fraud can hamper governments from collecting fair export taxes, and consumer and retailers face the prospect of purchasing counterfeit or unethically mined stones. And here comes the hyper ledger block-chain technology with the potential of eliminating the vulnerabilities with transparent transactions.
Block-chain offers all parties involved in a business network as secure and synchronized record of transactions. The block-chain ledger has the potential to record every transaction from beginning to end whether it is hundreds of steps in a supply chain or single online payment, sequentially. As each transaction happens it is put into a block which is connected to the one before and after it and hence, groups of transactions are blocked together.
A fingerprint of each block is added to the next, thus, creating an irreversible change that is why block-chain is ideal for recording the transactions for one of the most valuable goods in the world. The technology can trace the journey of diamonds from the mine to the consumer’s hand with exceptional security and transparency.
While block-chain works with all types of transaction, there are three key features that make hyper ledger block-chain uniquely capable to handle the requirements of a regulated industry like diamonds. It’s distributed, permission and secure because the ledger is distributed it works as a shared form of record-keeping ensuring no one person or organization holds ownership of the system as the diamond cycles through its supply chain everyone involved during the process is permission to have a copy of every record and piece of data and no transaction can be added to the chain without the consensus across the participants.
So, this technology did not allow any person to add or alter the block-chain without being permanently recorded and that makes it tamper-resistant and highly secure eliminating the risk of fraud and error. Not even the system administrator can delete it. In the case of diamonds, a block-chain ledger keeps a record of high-resolution photos of each diamond and every touch point along its journey. It holds the certificates of authenticity, real-time records of every payment transaction as well as product details like cut, clarity, colour, carat and diamond serial numbers.
At the end of the buying cycle, there is a complete auditable and indisputable record of information. Block-chain technology gives us the ability to transform industries of all sorts from diamonds to flowers, monetary transactions or even things like contracts, deeds, records and other public and private agreements. Now it’s easier to free up the capital flows, the process also speeds up with low transactions costs. Most importantly the technology provides security and trust. We believe that block-chain will do for business what the internet did for communication. Create new ways of working and leave more time for creativity and innovation.