The blockchain technology is famous for being able to provide total transparency without compromising privacy. It allows to reduce fraud and eliminate data tampering and at the same time protect the identities of the users. This feature is one of the critical advantages of blockchain that led many startups and corporations to start working on blockchain powered products and services.
How transparency is achieved
In Blockchain all transactions are saved in blocks on a distributed public ledger, allowing anybody to view every transaction that has ever been completed. Cryptocurrency of a user is directly associated with his or her public address, and anybody in the network is able to see the balance of any address using a block explorer
How privacy is preserved
Blockchain uses cryptography to hide the real identity of a user. All cryptocurrency units are associated with public keys or addresses, while users hold private keys that give access to cryptocurrency correlated with a particular address. This way blockchain allows for complete transparency while anonymizing all participants of the network.
Benefits of blockchain transparency
Transparency of blockchain applications is an extremely powerful tool that allows eliminating fraud or data tampering completely. What’s more, blockchain removes the need for intermediaries who validate that the deal is completed fairly, allowing to cut on costs significantly.
An example of blockchain transparency in action is supply chain management. By storing all movements of a particular product in the supply chain in a distributed database, a manufacturer can create a transparent supply chain that allows tracking the product on its way from production to retail. This can be used to check authenticity and eliminate counterfeit.