A blockchain needs to fulfill four really important points, to be suitable for business applications:
- shared ledger: an append only system of records shared across the network
- privacy: a business network usually needs to manage privacy services. Not all the network members can access the same information. So, a public and permissionless blockchain in most cases is not the righe choice for business.
- trust: selected network members have the task to validate transactions. This increases the trust level in the system.
- smart contract: it is possible to embed the business flow or logic inside the blockchain using smart contracts. A smart contract replicates a traditional contract behavior. All the steps are encoded in the form of shared business process and shared across the business network.
Now let's see every point in further details.
Shared ledger
All the participants in the business network own a copy of the ledger. But there's also a concept of permission in the blockchain network. So, everyone can access only the ledgers part where he has permission to. And there's a system that let manage this permissions.
Smart contracts
Smart contracts are the way of encoding and sharing the business process around the business network. A smart contract comes from the English contract, encoding it in computer readable language. The contracts are verified and signed when they're distributed across the business network.
The really interesting characteristic about smart contracts is that, once they are in the network they will execute. So, after submitting a contract there's no way of stopping it. It will execute no matter what.
Privacy
Privacy services are a way of controlling the confidentiality inside the blockchain. So that certain people can access only limited information in the chain. In addition, it gives us a way of making sure that blocks are tied together in an immutable way. So that the blockchain becomes tamperproof.
Trust
Trust, in a blockchain for business, is achieved by selecting specific members of the business network to validate transactions. It is also possible to allow different members to endorse different transaction types. This gives us the possibility of having a verifiable audit trail for everything that moves around the network.