How Blockchain Works
Why Does Gilded use Blockchain?
Blockchain technology is one of the leading innovations in financial services, helping reduce fraud, and ensuring immutable, secure and quick transactions.
Blockchain is one of the most interesting new technologies to be introduced in our society. In its simplest form, blockchain is a database and, as with other databases, it collects and stores information electronically in a digital format.
The Blockchain Difference
The way data is structured, shared, and stored is what makes blockchain different. There are two components—the block, which collects information, and the chain, which connects additional blocks of new information. The process of adding new blocks to the chain continues to create ever-growing blockchains. To string these blocks together, the chain uses complex encryption called cryptography that makes it nearly impossible to hack into the data or erase or amend it once the block has been closed. This is what makes blockchain so reliable—it’s a record that can be updated, but never deleted or historically amended, making blockchains trustworthy and secure.
You most commonly see blockchain used as a ledger for transactions. Many of these ledgers may be distributed, or public, meaning there is no central controlling entity. Each new block is confirmed when a consensus is reached by all participating nodes. Nodes reach this consensus through heavy computing power, and energy, to solve the cryptographic process, which is why reward is often required for participating. Many blockchains are merely highly complex databases that have nothing at all to do with a cryptocurrency.
Types of Blockchains
In addition to decentralized, public blockchains, there are also private and permissioned blockchains. This provides more centralized control, limiting access to known and allowed participants. These participants can still perform valuable third-party control roles, such as auditing the validity of the transactions being entered. Heavy computing power is not required to confirm the integrity of the new block or to reach a consensus. This increases the speed and capacity of the database. Additionally, there are also blockchains that fall between these public and private and have hybrid characteristics of each.
Blockchain is not Cryptocurrency
Cryptocurrencies such as Bitcoin can be thought of simply as a reward element of most public blockchains. While all cryptocurrencies require the use of blockchain technology, not all blockchains are cryptocurrencies. In fact, many blockchains are merely highly complex databases that have nothing at all to do with a cryptocurrency; instead, they are used for various commercial purposes, such as recording physical or digital asset ownership, or confirming and storing financial transactions and records.
How Gilded uses Blockchain
Gilded uses the open-source Hyperledger Fabric enterprise platform, as the private permissioned blockchain that records ownership of the physical gold stored for Gilded clients within Brink’s vaults. It is not a cryptocurrency, and does not have any requirements for consensus, heavy computing power or potential reward requirements.
By creating a digital record for a physical asset, Gilded transforms gold ownership. Ownership can transfer instantly, around-the-clock, without the requirement of moving the physical gold bar but rather, the digital record evidences the movement of value. This transforms gold from a store of value into a medium of exchange, and a true alternative to cash. Blockchain is being used by Gilded to make gold digital, mobile and usable as a new and improved store of value for the 21st century.
Gold. Digital, Mobile and Usable through Blockchain.
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