Since the very beginning people have kept records of the exchange of goods and services. But, when we talk about the present, we in digital era have been recording these transactions on our smart devices and systems.
Whether it’s transfer of money between two individuals, contractual agreements or some other information recorded, it’s always been difficult to manage such huge amount of data. And when we talk about data in bulk, it is always vulnerable to errors, frauds, corruption and misinterpretation.
Let’s take an example of some shoe company, where how the shoe will be designed, what sort of processes will it go through, and what changes does it need to be perfect. All these things need permission at some level to process shoe further. And, all this information would become more complex if we store it at one place.
Instead of making it more complex, what we can do is, create a chain or system where everyone working in industry has access to previous information and can rely on that information for further processing, which would make the process much easy and streamlined. This is what Blockchain does. With its features, it makes the system simpler and streamlined so that no fraud and scams are possible, and if some outsider tries to gain access to chain, all the individual’s present in supply chain will get to know about it.
So, today in this article, we will be talking about some of the features of Blockchain that can help in stopping scams and frauds.
Blockchain Is Decentralized and Distributed
To do a fraud or scam one needs to have access to the central administrator. But, Blockchain doesn’t have a centralized administrator or version. It uses a distributed ledger, which means it can be shared, copied and synced among various members of the supply chain. This ensures that no one personal or organization holds ownership of the system. It also ensures that every person or individual in supply chain has a copy of transaction done and no transaction is done without the consent of all the participants.
Well, talking about distributive ledger, it is like a database that contains transactional data, exchanges done of assets, and all other data that is shared across peer-to-peer network.
There are various ways in which scammers can share, collect, manipulate and delete data resulting in fraud or scam. But, by using a distributed ledger feature of Blockchain, one can easily lessen the chances of getting scammed as it will increase the rate of transparency in transactions made with in the chain or network. From where users can view the history and transfer of assets, making it easy to spot the fraud in transaction.
And if someone wants to manipulate or tamper the data on Blockchain, then user needs to have a permission of majority of members or individuals to have control of the system.
Blockchain Is Unchangeable
All the transactions recorded on Blockchain are unchangeable, as once the transaction is done, it can’t be manipulated or deleted. In Blockchain, every individual present in chain should agree to transaction before any further blocks are added. This process is called consensus, where transaction is checked whether it was according to the agreement or not. Once permissioned, added block gets a timestamp, which is secured by cryptography and linked to previous block of supply chain.
By this, users will be able to view the origin of an asset, from where it came, where it went and who owns that asset making the records more transparent and scam free.
Forgery has become a global problem affecting many industries like e-commerce sector, clothing, food supplies, and many more. This can be eliminated with Blockchain if goods or assets are added on Blockchain, through which will let participants know the origin of good and whether if its fake or real as well.
Blockchain Is Permissioned
Well, not all Blockchain networks are permissioned, but if they get permissioned, it will a great step towards fraud prevention.
This is because organizations deal with a lot of confidential data and information, which shouldn’t be accessed by any outsider. As this will lead in great controversy, conspiracy and of course exploitation of millions of user’s data who are working or are associated with the organization in any manner. So, there should be some measures to prevent it. This is where permission comes in to play.
If the network is permissioned then it would be easier to restrict outsiders from accessing confidential data and records. With this it would also be possible to identify and track participants and outsiders much easily. And also, who is allowed to access information in what capacity and if there is some outsider trying to gain access, then chances of him getting caught increases.
This is it guys! These are the three features of Blockchain that can be used to stop frauds from happening in organizations.
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