Understanding the Blockchain: The Future of Enterprise Transactions
A growing number of enterprises are investing in blockchain as a secure and transparent way to digitally track the ownership of assets between customers, suppliers and partners. Blockchain could very well be the future of enterprise transactions and software publishers are now researching how to incorporate blockchain technology into tomorrow’s ERP software. Soon, executing transactional contracts may not require any human interaction at all. How would this be possible?
What is Blockchain?
Blockchain is a distributed network of transaction records, called blocks, that are time-stamped, and verified across a decentralized network of private computers, i.e., the customers, vendors, and partners who make up the network, or industry. A blockchain can be applied to any industry, and can be used for tracking financial transfers, documents, smart contracts, digital assets, physical assets, and more.
Once a block (or transaction) between two parties is verified, it is tied to a chronological chain using cryptography and cannot be altered or deleted by anyone. The network cannot be brought down by a hacker or malware, because there is no central point of failure. Remember, no single company or person runs the system; it is run by a network of private computers. This ensures that transaction records cannot be counterfeited or changed at any time, thereby allowing a simple, clear, and secure transaction to take place and be recorded.
Blockchain allows one company’s AI (Artificial Intelligence) to perform and record a transaction with another company’s AI, requiring little to no employee interaction. This leads to faster transactions that are easily available, builds trust between parties, and eliminates third party intermediary cost and risk, saving you and your business time and money.
Blockchain Now Enabled Through Microsoft’s Coco Framework
Microsoft now allows enterprises to deploy the blockchain network of their choice on top of Azure through their new Coco Framework. Coco is an open source system that allows businesses to use blockchain networks that surpass blockchain limitations, and meet enterprise requirements. According to Microsoft, blockchain networks enabled by Coco deliver:
- Throughput and latency approaching database speeds
- Richer, more flexible, business-specific confidentiality models
- Network policy management through distributed governance
- Support for non-deterministic transactions
Through Microsoft’s Coco Framework, enterprises are fully equipped with blockchain technology. Coco can operate in both the cloud and on premise.
For enterprises, the major limitations of blockchain networks today are scalability, confidentiality, and governance. Most blockchain networks, like Bitcoin, rely on proof of work and cryptography to complete transactions, resulting in few transactions per second (throughput) and long transaction time (latency). Once these transactions are completed, they become visible to every node in the network, preventing enterprise confidentiality. Lastly, blockchain networks today lack built-in governance and members must agree to changes in the network. Enterprises would prefer a blockchain network that features database-like throughput and latency, i.e., high-speed transaction time, confidential transactions, and distributed built-in governance.
Learn more about Coco Framework in this video from Microsoft Azure’s CTO
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Learn more about blockchain – check out this video