The blockchain be used to prevent fraud cry.ptography in pdf
The blockchain be used to prevent fraud cry.ptography in pdf
Blockchain is distributed A blockchain is a type of distributed digital ledger co.ntaining transaction data that is shared across a peer to peer networ.k and co.ntinually recoiled. There is no central administrator or centralized version, so there is no single point of failure. Instead, management and authorization are spread across the networ.k, so there is no obvious place for someone to instigate a fraud scheme. There are several methods fraudsters use to coeal their criminal activities, including altering or deleting information in a companys accounting systems, changing electronic or paper documents and creating fraudulent files. Using a shared digital ledger can help reduce fraud because it increases the visibility and transparency of the transactions made throughout a supply chain and between members of a business networ.k. Participants can see the history and transfer of assets, so fraudulent transactions are easier to identify. Plus, to tamper with the transaction records on a blockchain, an individual or group of individuals in collusion would have to co.ntrol a majority of the system. Blockchain is immutable Transactions recorded on blockchain are immutable because they cannot be deleted or changed. Before a block of transactions can be appended to the blockchain, networ.k participants must agree the transaction is valid through a process called co.nsensus. The block is then given a timtamp, secured through cryography and linked to the previous block in the chain. Though you can create a new transaction to change the state of an asset, it will simply be added to the chain, and the original record will still be accessible. So, by using blockchain you can see the provenance of an asset, including where it came from, where its been, and whos had ownership of it. Counterfeiting is a global problem that affects a wide range of industries such as luxury goods, clothing, food products, pharmaceuticals and more. Proving or disproving the authenticity and quality of an asset can be a challenge because traditional supply chains are long, complex and lack transparency. However, if a producer or manufacturers goods are placed on the blockchain, those goods will have provenance due to their immutable transaction history, and that will make it difficult to pass off fake products as real. Blockchain can be permissioned Businesses deal with a lot of coidential data they cant let just anyone have access to it. There must be some way to ensure outsiders cant get into the networ.k and insiders cant corrupt the records. This is where permissions come into play. But unlike the previous features Ive discussed, not all blockchain networ.ks are permissioned. However, permissioned networ.ks can be great for fraud prevention because they rtrict who is allowed to participate and in what capacity. Members of a permissioned networ.k must be invited and validated before they can co.ntribute. Controlling access and identity management are key in a permissioned networ.k. With Hyperledger Fabric, a blockchain implementation framewor.k hosted by the Linux Foundation, participants are issued cryographic membership cards to represent their identity. That membership card grants access to see the transactions that pertain to them. However, even credentialed users cant add to the blockchain without co.nsensus, and no one can tamper with records on the blockchain because they are encrypted. Without a way to hide their tracks, fraudsters have a much higher chance of getting caught. Blockchain technology has the potential to disrupt and improve many industries and traditionally centralized systems. However, before it can become a real, viable alternative to its centralized counterparts, blockchains must be able to scale and process transactions at speeds way above its current capabilities. The number one limitation of blockchains is scalability. Put simply, it is hard for blockchains to grow and support increasing numbers of transactions. One way to address scalability is sharding, a process that breaks the data into manageable chunks distributed across different nodes. Blockchain sharding is already being used for private blockchain networ.ks. Database sharding allows application developers to be able to build more scalable and faster architectures. Sharding is an important solution, especially in the blockchain world, where data processing is still slow and only a small amount of data can be stored on chain at the same time. A number of blockchain / distributed ledger technology firms such as Shardus are actively pursuing implementing sharding into distributed ledger technology and existing blockchain networ.ks are also in the process of developing sharding as a scaling solution.
by Ly Quynh Chi
linux foundation
