Making Sense out of Blockchain Technologies
Evolving beyond the complex world of cryptocurrencies, blockchain applications are now showing enormous potential for many key industries. Industry analyst, Gartner, predicts that blockchain's business value-add will grow to US$176 billion by 2025.1 Although in its nascent stages and not without challenges, the technology is poised to revolutionize how consumers and businesses interact with data. Blockchain has the potential to redefine how we manage supply chains, maintain transactions and exchange assets.
What is Blockchain?
Blockchain is a decentralized digital ledger (a continuously growing list of electronic records) of transactions kept over time and secured using cryptography (a kind of algorithmic code). Blockchain ledger data is distributed across a network of computers. Its users can directly interact with stored data in real-time without the need for an intermediary (a “middle-man” or distributor) to authenticate transactions. The technology provides an independent, tamper-resistant, and transparent platform for parties within the blockchain to securely store, transmit, and process sensitive information.
- Synchronized through consensus
- Eliminates the need for a third-party verifier
- All transactions are visible to all parties involved in the specific blockchain
How Blockchain Works
A blockchain is a record-keeping system where multiple sources validate an entry before it gets added to the chain of data. Once data has been added, it cannot be changed and the record is distributed to multiple places within the network. Adding a new record (known as a block) to the blockchain sequence requires verification by multiple members connected to the blockchain network. These blocks of data are all linked to one another forming the chain. All transactions are public to those in the blockchain, but all individual identities are hidden.
Blockchain technology uses an algorithm to assign a cryptographic hash (a unique string of letters and numbers—also sometimes called the “digital fingerprint”) to each block. In addition to the hash, each block contains timestamped sets of prior transactions, plus the hash of the previous block—which is what creates the immutable link between sequential blocks in the chain.
The combination of cryptography and timestamps allows blockchain technology to automatically verify that this progressive hash sequence never changes. This action restricts new blocks from being inserted out of order—thereby preventing transaction data from being altered or falsified after the fact.
User ‘A’ submits a transaction to pay User ‘B’. This is represented as a block.
This block is broadcast to the each member of the Peer-to-Peer network for verification.
The block is checked against each copy of the ledger. If each ledger matches, the transaction is approved.
The transaction is completed and the block is added as the latest part of the blockchain.
Smart Jargon: Understanding Blockchain
- Blockchain: A shared digital ledger that provides a reliable means to record business transactions comprised of a sequence of linked data compartments (or “blocks”) among a distributed network of members.
- Cryptography: Secure information and communication techniques, which is used in blockchain to send and/or store data so that only intended recipients can access the data.
- Hash: A type of cryptography—in blockchain, it is a coded string of letters and numbers that is permanently unique to each individual block in the chained sequence; also sometimes called the “digital fingerprint.”
- Block: A sealed data compartment that contains 1) its own identifying block hash, 2) the hash from the previous block in the chain sequence, and 3) a set of time-stamped transactions.
- Blockchain Transaction: A member-verified data record that provides nearly immutable proof of business dealings—such as financial or contractual agreements.
What is a Block?
- Block Hash
A coded string of letters and numbers that is permanently unique to each individual block in the chained sequence.
- Previous Block Hash
The identification hash from the previous block, which prevents a block from being added to the middle of the chain.
- Set of Transactions
Data records that provide member-verified proof of business dealings.
Emerging Use Cases
A wide variety of applications can use a blockchain transaction database. Existing barriers to wide acceptance of blockchain (e.g., culture, complexity, energy use), will likely be addressed over time. While blockchain’s well-publicized roots come from currency and finance, it is already making an impact in many industries, including:
- Supply Chain Management: When combined with properly validated business practices, blockchain provides an auditable method to document supply chains. For example, it has been used to ensure conflict-free diamonds,2 protect against counterfeiting manufacturing in IoT,3 and reliably track a product’s materials and manufacturing from source to delivery to promote ethical practices.4
- Smart Contracts: Smart contracts offer speed, efficiency, and security by building the terms of the agreement into blockchain transactions. Within the blockchain application, all terms and conditions of a contract for goods or services can be efficiently listed, amended, and agreed upon without the need for physical documents and signatures or for using potentially insecure methods of communication. Smart contracts can also eliminate complex and expensive services of a third-party intermediary for major transactions—such as real estate purchases or new auto loans.
- Heath/Medical Records: Blockchain has the potential to standardize secure electronic medical record sharing across providers in a less burdensome way than previous approaches.5 It offers the ability to create a decentralized record management system that reduces the need for another organization between the patient and the records to manage access. Blockchain-enabled healthcare applications offer potential benefits such as instantly verifying the authenticity of prescriptions or automatically identifying potential adverse drug interactions.
- Governmental Services: National identity management systems, taxes/internal revenue monitoring, voting, and land management are just a few examples in which a blockchain ecosystem could be leveraged by public authorities. The State of Illinois, for example, recently launched a birth registry and identification system trial.6 The African nation of Ghana has also enabled land registration based on blockchain technology.7
Blockchain is poised to benefit many industries, including:
Processing Performance, Efficiency and Security
While the promises of blockchain are great, its algorithms can require significant amounts of compute performance and power from both central processing units (CPUs) and graphics processing units (GPUs)—both in terms of processing bandwidth and the energy consumed to perform operations. Therefore, implementing blockchain applications on a mass scale using current technologies is challenging.
To unleash the potential of blockchain, AMD is developing new processing solutions—designs that can simultaneously deliver more compute performance while consuming less energy. For instance, AMD brings the industry's first high-performance 7nm computing and graphics processors.8
The Power and Freedom to Go Further
Blockchain’s impact is rapidly expanding across a wide swath of industries and applications. While it is still at a formative stage, the technology’s enormous potential shows substantial and unique value.
AMD is currently working with ecosystem partners to bring the transformative potential of blockchain to consumers, new markets, governments and others in a variety of applications.
For more information, please visit AMD and Blockchain Technology
For more information on our products or services, please visit www.amd.com
- Three Things CIOs Need to Know About the Blockchain Business Value Forecast,” Gartner, August 2, 2017.
- The Diamond Industry Is Obsessed With the Blockchain,” Fortune, September 12, 2017.
- Blockchain and the Internet of Things will be used to combat with the counterfeiting of brands,” Bit News, August 24, 2018.
- “From Farm To Finished Garment: Blockchain Is Aiding This Fashion Collection With Transparency,” Forbes, May 10, 2017.
- “Exploring the Use of Blockchain for EHRs, Healthcare Big Data,” Health IT Analytics, Feb 5, 2018.
- “Illinois Launches Blockchain Pilot to Digitize Birth Certificates,“ Coindesk, September 1, 2017
- “Ghana Looks To IBM For Blockchain-Based Land Administration,” ETHNews, July 11, 2018
- “AMD CTO: 'We Went All In' On 7nm CPUs,” CRN, August 23, 2018.