A blockchain has been described as an “immutable ledger.” But what does that mean? What makes it immutable? Let’s review exactly how the blockchain works and the qualities that make it immutable.
In simple terms, a blockchain is a database used to store information. But instead of storing it on only one server, it has several copies distributed on different computers (or nodes). There are blockchains with only a handful of nodes and blockchains with thousands of them. The more extensive the network is, the safer it gets. Think of it as having extra backup copies of an important document. If a few of the nodes were to be compromised or attacked, the network would still run smoothly as it would rely on the unaffected ones.
What Makes a Blockchain Immutable?
As its name suggests, the information on a blockchain is stored in blocks that are connected to each other, forming a chain. The way they are linked to each other is essential to achieving immutability. To understand how it works, a basic understanding of cryptography is necessary.. This technology works with hashing algorithms. A hash is a code related to a piece of information. Any digital data, such as an image, a book, or a video, can be passed through a hashing algorithm. The result will be a fixed-length alphanumeric code. The same input will always lead to the same output (or code). A slight change in the input will result in a totally different code. An example would be:
Hello → Hashing algorithm → 2cf24dba5fb0a30e26e83b2ac5b9e29e1b161e5c1fa7425
Hello! → Hashing algorithm → ce06092fb948d9ffac7d1a376e404b26b7575bcc11ee05a
On a blockchain, each block contains the hash of the previous block. This means each block depends on the information stored in the previous block, which in turn depends on the previous one. This chain-like structure is what makes altering data from a blockchain almost impossible.
As we see in the image above, the code for Block 2 is obtained by combining the data stored in that block and the code for Block 1. If we changed even one bit of Block 1, its code would be entirely different. That means that code 2 would change and, therefore, code 3 as well. In that sense, the copy of the blockchain containing all these changes would be different from the others. The network would easily recognize this modification and disregard that specific copy of the blockchain.
Why Are Immutable Blockchains Useful?
To appreciate the advantages of blockchain’s immutability, comparing it to centralized ledgers is useful. Regular databases are stored on one server, and there is one entity that adds records to it. This process is fast since all the decisions are taken and implemented instantly by that entity. Nevertheless, what it has in efficiency, it lacks in security.
If a hacker accesses a centralized server, they can add, remove, or edit information without leaving a trace. This is dangerous since, in the case of an attack, stakeholders cannot trust the data left behind. In addition to the risk of outside attacks, centralized databases can be easily modified from the inside if the entity in charge is corrupt.
In contrast, immutable ledgers don’t have these vulnerabilities since they provide data integrity. The multitude of nodes mentioned earlier provide layers of security that are almost impossible to corrupt. Blockchains also make the auditing of information easier, faster, and more reliable. They eliminate the need to trust big and expensive auditing firms. If applied to business, blockchain technology can help maintain a complete historical record of transactions. This not only provides the business with a verifiable source of truth, but it eases interactions with other entities such as insurance providers or regulators.
How does Black Ink Tech Take Advantage of Blockchain's Immutability?
Black Ink Tech leverages blockchain technology to create immutable records of physical or digital events in order to provide truth and transparency. Using a patented process including software and hardware, the Black Ink Tech platform autonomously pairs physical items with unique digital assets. In this way, it translates the security and transparency of the blockchain to the physical world.
A good example of this process is Sportafi, a product that connects sports memorabilia with NFTs in a tamper-proof way to provide simple authentication and transparency. An item can be registered on the platform by going to a Sportafi kiosk or using the mobile app ChainIT. By incorporating biometrics, the identity of the owner, time, location, and the details of the item itself will be recorded autonomously on the blockchain. This process ends with a unique digital token that represents the physical item. All of the metadata related to this item can be accessed at any time through Touch Audit technology on the app, displaying the where, when, who, and what associated with the asset and its history.
The Bottom Line
Blockchain uses cryptography to identify modifications on its database, which prevents anyone from altering records from it. By providing a verifiable source of truth, blockchains can be used to store business transactions and to facilitate audits for customers, insurance providers, and regulators. Black Ink Tech leverages this technology to autonomously pair physical objects and events with digital assets. This process is used to build a reliable database and bring more transparency to not only the sports memorabilia market, but to construction, pharmaceuticals, art, and more. Learn more at www.blackinktech.io.