There are five basic principles underpinning Blockchain technology.

1. Distributed Database:

Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary.

2. Peer-to-Peer Transmission:

Communication occurs directly between peers instead of through a central node. Each node stores and forwards information to all other nodes.

3. Transparency with Pseudonymity:

Every transaction and its associated value are visible to anyone with access to the system. Each node, or user, on a blockchain has a unique 30-plus-character alphanumeric address that identifies it. Users can choose to remain anonymous or provide proof of their identity to others. Transactions occur between blockchain addresses.

4. Irreversibility of Records:

Once a transaction is entered in the database and the accounts are updated, the records cannot be altered, because they’re linked to every transaction record that came before them (hence the term “chain”). Various computational algorithms and approaches are deployed to ensure that the recording on the database is permanent, chronologically ordered, and available to all others on the network.

5. Computational Logic;

The digital nature of the ledger means that blockchain transactions can be tied to computational logic and in essence programmed. So users can set up algorithms and rules that automatically trigger transactions between nodes. A Blockchain, amongst other things, is a decentralized network that links up partners who add value and provides access to online marketplaces. It’s like a smart intranet. It’s a globally distributed highly secure platform

In a nutshell, the Blockchain is a global system for mediating trust and selective transparency. The Blockchain is perfect for managing supply chain relationships, whose complexity and diversity of interests pose exactly the kinds of challenges the Blockchain addresses.

The blockchain can reveal hitherto hidden information and allow users to attach digital tokens — a unique, negotiable form of digital asset — to intermediate goods as they progress along the production, shipping, and delivery phases of a supply chain and as title to them passes between different players.

Blockchain facilitates the automation of the administration of transactions through smart contracts. With a smart contract, the transaction is digitalized, and physical assets can be tokenized, enabling the tokens to be utilized in a Digital Transaction. Execution is managed automatically by the network. Smart contracts define the rules and penalties around an agreement in the same way that a traditional contract does, and automatically enforce those obligations.

Blockchain data is complete, consistent, timely, accurate, and widely available. Due to the decentralized networks, blockchain does not have a central point of failure and is better able to withstand malicious attacks. Users can trust that transactions will be executed exactly as the protocol commands removing the need for trusted third party intermediaries and enabling new levels of trust between parties. enabling new levels of trust between parties.