Blockchain: what are the steps to create a business transaction?

Let’s talk about Blockchain again, but this time not to highlight its main features, but to understand how an economic transaction is created using the distributed public ledger.

It all starts from the need to exchange a unit of value that can be a currency or a tangible / intangible digital asset. For instance, we can exchange Bitcoin or business patents, a car, a house. The choice to do it through Blockchain is to save intermediation costs and ensure that transaction is immutable and transparent.

Also, for companies to be able to ensure order tracking and provide complete information regarding end-to-end transactions is a relevant plus. As well as being a way to increase the trust of their stakeholders.

But let’s see what are the main steps of a business transaction on Blockchain.

1. Requesting a transaction: obviously, there must be at least two parties involved, as with any self-respecting exchange of value. In this case, it is also necessary to detail the information of the digital asset to be exchanged and the parties involved;
2. Transmission of the request to the P2P network nodes: the request is then sent to the individual computers that form the nodes of the distributed ledger chain;
3. Validation of the transaction: the nodes will have to evaluate if the transaction respects all the agreed rules and can become part of the registry;
4. Creation of a public ledger block: after passing the verification process, it becomes to all intents and purposes a block in the chain with a hash code that distinguishes it;
5. Union to an existing chain: at this stage, what is technically called mining takes place, i.e., the process through which nodes, which contribute to the transactions of a blockchain, add new blocks to the chain.

What is the economic value of blockchain-based solutions? The answer in the article “Blockchain: what is the best time to invest?” on the DeltalogiX blog.

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