Blockchain
A blockchain is a distributed ledger with growing lists of records (blocks) that are securely linked together via cryptographic hashes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree, where data nodes are represented by leaves). Since each block contains information about the previous block, they effectively form a chain (compare linked list data structure), with each additional block linking to the ones before it. Consequently, blockchain transactions are irreversible in that, once they are recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks.
![](https://agrichain.id/wp-content/uploads/2023/11/bc01-1.gif)
![](https://agrichain.id/wp-content/uploads/2023/11/blockchain-e1700903906322.jpg)
Structure and design
![](https://agrichain.id/wp-content/uploads/2023/11/bc02.jpg)
![](https://agrichain.id/wp-content/uploads/2023/11/Blockchain-Layers-1-e1700906893744.jpeg)
- infrastructure (hardware)
- networking (node discovery, information propagation and verification)
- consensus (proof of work, proof of stake)
- data (blocks, transactions)
- application (smart contracts/decentralized applications, if applicable)
![nodes-e1700910492547.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/nodes-e1700910492547-150x150.jpg)
![dsentralized.png](https://chain.agrindo.net/wp-content/uploads/2023/12/dsentralized-150x150.png)
![forks.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/forks-150x150.jpg)
![Myimagine-blockchain-1-e1700909080258.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/Myimagine-blockchain-1-e1700909080258-150x150.jpg)
![block01.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/block01-150x150.jpg)
![block.jpeg](https://chain.agrindo.net/wp-content/uploads/2023/12/block-150x150.jpeg)
![bc02.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/bc02-150x150.jpg)
![Blockchain-Layers-e1700906218315.jpeg](https://chain.agrindo.net/wp-content/uploads/2023/12/Blockchain-Layers-e1700906218315-150x150.jpeg)
![blockchain-e1700903906322.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/blockchain-e1700903906322-150x150.jpg)
![bc01-1.gif](https://chain.agrindo.net/wp-content/uploads/2023/12/bc01-1-150x150.gif)
Block
![](https://agrichain.id/wp-content/uploads/2023/11/block.jpeg)
![](https://agrichain.id/wp-content/uploads/2023/11/block01.jpg)
![](https://agrichain.id/wp-content/uploads/2023/11/Myimagine-blockchain-1-e1700909080258.jpg)
![](https://agrichain.id/wp-content/uploads/2023/11/forks.jpg)
Decentralization
![](https://agrichain.id/wp-content/uploads/2023/11/dsentralized.png)
![](https://chain.agrindo.net/wp-content/uploads/2023/12/nodes-e1700910492547.jpg)
Blockchain
globally 2022 – 2030
($B) blockchain market
0
(M) total blockchain wallet users
0
($B) spending on blockchain solutions
0
Types
Currently, there are at least four types of blockchain networks — public blockchains, private blockchains, consortium blockchains and hybrid blockchains.
Public blockchains
A public blockchain has absolutely no access restrictions. Anyone with an Internet connection can send transactions to it as well as become a validator (i.e., participate in the execution of a consensus protocol). Usually, such networks offer economic incentives for those who secure them and utilize some type of a proof-of-stake or proof-of-work algorithm.
Some of the largest, most known public blockchains are the bitcoin blockchain and the Ethereum blockchain.
Private blockchains
A private blockchain is permissioned. One cannot join it unless invited by the network administrators. Participant and validator access is restricted. To distinguish between open blockchains and other peer-to-peer decentralized database applications that are not open ad-hoc compute clusters, the terminology Distributed Ledger (DLT) is normally used for private blockchains.
Hybrid blockchains
A hybrid blockchain has a combination of centralized and decentralized features. The exact workings of the chain can vary based on which portions of centralization and decentralization are used.
Sidechains
A sidechain is a designation for a blockchain ledger that runs in parallel to a primary blockchain. Entries from the primary blockchain (where said entries typically represent digital assets) can be linked to and from the sidechain; this allows the sidechain to otherwise operate independently of the primary blockchain (e.g., by using an alternate means of record keeping, alternate consensus algorithm, etc.).
Consortium blockchain
A consortium blockchain is a type of blockchain that combines elements of both public and private blockchains. In a consortium blockchain, a group of organizations come together to create and operate the blockchain, rather than a single entity. The consortium members jointly manage the blockchain network and are responsible for validating transactions. Consortium blockchains are permissioned, meaning that only certain individuals or organizations are allowed to participate in the network. This allows for greater control over who can access the blockchain and helps to ensure that sensitive information is kept confidential.
Consortium blockchains are commonly used in industries where multiple organizations need to collaborate on a common goal, such as supply chain management or financial services. One advantage of consortium blockchains is that they can be more efficient and scalable than public blockchains, as the number of nodes required to validate transactions is typically smaller. Additionally, consortium blockchains can provide greater security and reliability than private blockchains, as the consortium members work together to maintain the network. Some examples of consortium blockchains include Quorum and Hyperledger.
![](https://agrichain.id/wp-content/uploads/2023/11/public-blockchain-edit-e1700913881411.png)
![](https://agrichain.id/wp-content/uploads/2023/11/private-e1700914248530.jpeg)
![](https://agrichain.id/wp-content/uploads/2023/11/blockchain_technology_it_consortium_blockchain_technology-e1700913637510.jpg)
![ai21.jpeg](https://chain.agrindo.net/wp-content/uploads/2023/12/ai21-150x150.jpeg)
![Supply-Chain-Visual.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/Supply-Chain-Visual-150x150.jpg)
![finance-e1700916789190.jpeg](https://chain.agrindo.net/wp-content/uploads/2023/12/finance-e1700916789190-150x150.jpeg)
![smart-contract.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/smart-contract-150x150.jpg)
![cripto.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/cripto-150x150.jpg)
![Blockchain-invest.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/Blockchain-invest-150x150.jpg)
![private-e1700914248530.jpeg](https://chain.agrindo.net/wp-content/uploads/2023/12/private-e1700914248530-150x150.jpeg)
![public-blockchain-edit-e1700913881411.png](https://chain.agrindo.net/wp-content/uploads/2023/12/public-blockchain-edit-e1700913881411-150x150.png)
![blockchain_technology_it_consortium_blockchain_technology-e1700913637510.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/blockchain_technology_it_consortium_blockchain_technology-e1700913637510-150x150.jpg)
![stock-internet.jpg](https://chain.agrindo.net/wp-content/uploads/2023/12/stock-internet-150x150.jpg)
Uses
Blockchain technology can be integrated into multiple areas. The primary use of blockchains is as a distributed ledger for cryptocurrencies such as bitcoin; there were also a few other operational products that had matured from proof of concept by late 2016. As of 2016, some businesses have been testing the technology and conducting low-level implementation to gauge blockchain’s effects on organizational efficiency in their back office.
In 2019, it was estimated that around $2.9 billion were invested in blockchain technology, which represents an 89% increase from the year prior. Additionally, the International Data Corp has estimated that corporate investment into blockchain technology will reach $12.4 billion by 2022. Furthermore, According to PricewaterhouseCoopers (PwC), the second-largest professional services network in the world, blockchain technology has the potential to generate an annual business value of more than $3 trillion by 2030. PwC’s estimate is further augmented by a 2018 study that they have conducted, in which PwC surveyed 600 business executives and determined that 84% have at least some exposure to utilizing blockchain technology, which indicates a significant demand and interest in blockchain technology.
In 2019, the BBC World Service radio and podcast series Fifty Things That Made the Modern Economy identified blockchain as a technology that would have far-reaching consequences for economics and society. The economist and Financial Times journalist and broadcaster Tim Harford discussed why the underlying technology might have much wider applications and the challenges that needed to be overcome. His first broadcast was on June 29, 2019.
The number of blockchain wallets quadrupled to 40 million between 2016 and 2020.
A paper published in 2022 discussed the potential use of blockchain technology in sustainable management.
Cryptocurrencies
Most cryptocurrencies use blockchain technology to record transactions. For example, the bitcoin network and Ethereum network are both based on blockchain.
The criminal enterprise Silk Road, which operated on Tor, utilized cryptocurrency for payments, some of which the US federal government has seized through research on the blockchain and forfeiture.
Governments have mixed policies on the legality of their citizens or banks owning cryptocurrencies. China implements blockchain technology in several industries including a national digital currency which launched in 2020. To strengthen their respective currencies, Western governments including the European Union and the United States have initiated similar projects.
Smart contracts
Blockchain-based smart contracts are proposed contracts that can be partially or fully executed or enforced without human interaction. One of the main objectives of a smart contract is automated escrow. A key feature of smart contracts is that they do not need a trusted third party (such as a trustee) to act as an intermediary between contracting entities — the blockchain network executes the contract on its own.
This may reduce friction between entities when transferring value and could subsequently open the door to a higher level of transaction automation. An IMF staff discussion from 2018 reported that smart contracts based on blockchain technology might reduce moral hazards and optimize the use of contracts in general. But “no viable smart contract systems have yet emerged.” Due to the lack of widespread use, their legal status was unclear.
Financial services
According to Reason, many banks have expressed interest in implementing distributed ledgers for use in banking and are cooperating with companies creating private blockchains, and according to a September 2016 IBM study, this is occurring faster than expected.
Banks are interested in this technology not least because it has the potential to speed up back office settlement systems. Moreover, as the blockchain industry has reached early maturity institutional appreciation has grown that it is, practically speaking, the infrastructure of a whole new financial industry, with all the implications which that entails.
Banks such as UBS are opening new research labs dedicated to blockchain technology in order to explore how blockchain can be used in financial services to increase efficiency and reduce costs.
Berenberg, a German bank, believes that blockchain is an “overhyped technology” that has had a large number of “proofs of concept”, but still has major challenges, and very few success stories.
The blockchain has also given rise to initial coin offerings (ICOs) as well as a new category of digital asset called security token offerings (STOs), also sometimes referred to as digital security offerings (DSOs). STO/DSOs may be conducted privately or on public, regulated stock exchange and are used to tokenize traditional assets such as company shares as well as more innovative ones like intellectual property, real estate, art, or individual products. A number of companies are active in this space providing services for compliant tokenization, private STOs, and public STOs.
Supply chain
There have been several different efforts to employ blockchains in supply chain management.
![](https://agrichain.id/wp-content/uploads/2023/11/Blockchain-invest.jpg)
![](https://agrichain.id/wp-content/uploads/2023/11/cripto.jpg)
![](https://agrichain.id/wp-content/uploads/2023/11/smart-contract.jpg)
![](https://agrichain.id/wp-content/uploads/2023/11/finance-e1700916789190.jpeg)
- Precious commodities mining — Blockchain technology has been used for tracking the origins of gemstones and other precious commodities. In 2016, The Wall Street Journal reported that the blockchain technology company Everledger was partnering with IBM’s blockchain-based tracking service to trace the origin of diamonds to ensure that they were ethically mined. As of 2019, the Diamond Trading Company (DTC) has been involved in building a diamond trading supply chain product called Tracr.
- Food supply — As of 2018, Walmart and IBM were running a trial to use a blockchain-backed system for supply chain monitoring for lettuce and spinach — all nodes of the blockchain were administered by Walmart and were located on the IBM cloud.
- Fashion industry — There is an opaque relationship between brands, distributors, and customers in the fashion industry, which will prevent the sustainable and stable development of the fashion industry. Blockchain makes up for this shortcoming and makes information transparent, solving the difficulty of sustainable development of the industry.
- Motor vehicles — Mercedes-Benz and partner Icertis developed a blockchain prototype used to facilitate consistent documentation of contracts along the supply chain so that the ethical standards and contractual obligations required of its direct suppliers can be passed on to second tier suppliers and beyond. In another project, the company uses blockchain technology to track the emissions of climate-relevant gases and the amount of secondary material along the supply chain for its battery cell manufacturers.