What is Blockchain?
Generally, any transaction or agreement needs various types of intermediates to ensure our security such as commercial banks for money transfer, lawyers for trade agreements and real estate brokers for buying a house. However, Blockchain has the potential to make these intermediates meaningless and eliminate data errors, so it can be simply called a database management system which provides validation, transaction clearing, tracking and record of ownership of property (such as Bitcoin digital payment system) or any other transferrable property.
Some people have confused Bitcoin with Blockchain, but in fact Bitcoin is a cryptocurrency and digital payment system which enables online trading. Meanwhile, Blockchain is a technology that tracks Bitcoin’s transactions between individuals and ensures higher security.
Why is it safe?
Blockchain has a different data validation process from conventional banks. Generally, banks store their financial data in an electronic documentation system and clients have to bring their books to update data from the banks’ automatic passbook update machines. It means that all account records are solely kept by the banks and in case of data loss and no passbook update, there will surely be problems.
Blockchain, however, has a different system and its structure consists of a key feature called Node (validator) which has many members in the network. Each Node has a Ledger (e-transaction account) of all users in the network and displays them via unknown Address. This enables all users in the network to check the financial statements of other users and the system will calculate the balance after cash deposit and withdrawal and inform relevant parties upon any transaction; for example, if Mr. A transfers 1,000 Baht to Mr. B and Mr. B pays Mr. C 500 Baht, the system will calculate and show that Mr. B has 500 Baht left. The result is obtained from the history of the account statement, the amount in the account, so change and forging the account data are more difficult.
In any transaction, users can transfer money by Pier2pier method which uses Private Key (an important code known only by the user) to send their order through the Ledger. The system will check if such transaction is accurate based on the database of each Node. If accurate, the system will accept and allow such transaction.
Now Blockchain technology has drawn much attention from various businesses because of its transparency and lowest possibility of data falsification. Global businesses are aware and trying to learn and apply it to their operations. For example, Walmart in Beijing has teamed up with IBM to apply Blockchain technology to monitor and improve the safety of its food delivery and distribution. Supply Chain Tracking is an important process in searching and specifying sources of rotten or contaminated food all over the world. As Blockchain’s features do not allow change in data already saved, the system proves transparent and more precise and has the ability to monitor all product items, ranging from manufacturing to distribution processes, and saves surrounding data obtained from all sensors through the Supply Chain.
Blockchain and Thailand
As mentioned above, the technology can be applied in various forms. In Thailand, Blockchain can be used to detect fake educational certificates as it can keep educational achievements and graduation results of universities and prevent falsification.
The technology is essential for Smart City Project in Phuket initiated and developed by Digital Economy Promotion Agency because it can check the accuracy of online transactions (Fintech) and track products from the manufacturers to end-users. In the medical sector, it helps physicians to obtain accurate and complete data for more effective data analysis and medical treatment. More importantly, it helps to comprehensively monitor public sector operations, budget and public benefits.
Although Blockchain is a supporting technology for Bitcoin, it can be applied to various industries because data accuracy and security are very important to business operations. Blockchain is not only a social revolution, but also a global revolution.