This report explains the fundamentals of blockchain technology. It describes the four key components of a blockchain (blocks, chain, nodes, and decentralization) and how they work together to keep records secure and tamper-resistant. It then compares public, private, and consortium blockchains, giving one benefit and one limitation of each. Finally, it presents two real-world applications: Bakong, Cambodia's national payment system, in finance, and IBM Food Trust in supply chain traceability. The report concludes that blockchain offers a transparent and secure way to share records, and that the right type depends on an organization's needs.

Blockchain Fundamentals – Assignment Report

Introduction

Blockchain is a shared digital ledger that records transactions across many computers instead of storing them in one central place. Once a record is added and agreed on by the network, it is very difficult to change or delete.

This report answers the three tasks in the homework assignment on Blockchain Fundamentals. It describes the key components of a blockchain, compares the three main types of blockchain, and explains two real-world applications.

1. Key Components of Blockchain

A blockchain is built from four main components: blocks, the chain, nodes, and decentralization. Each one has a specific job, and the system only works when all four are present.

Component	Description	Role in the system
Block	A container that holds a group of verified transactions, a timestamp, and the hash (digital fingerprint) of the previous block.	Stores the data.
Chain	The blocks linked together in time order, where each block contains the hash of the block before it.	Makes the record tamper-resistant: changing one block changes its hash and breaks every block after it.
Node	Any computer that joins the network, keeps a copy of the ledger, and helps verify new transactions.	Checks and validates data, so no single party has to be trusted.
Decentralization	The ledger is not owned or controlled by one bank, company, or server. Every node holds a copy, and new blocks are accepted by consensus.	Removes the single point of failure and spreads control across the network.

How the components work together. When a transaction is made, it is grouped with others into a block. The nodes verify the block through a consensus process, and once it is approved it is added to the end of the chain. Because the system is decentralized, every node then updates its own copy of the ledger, so all participants see the same record.

2. Types of Blockchain

Blockchains differ mainly in who is allowed to join the network and who controls it. The three main types are public, private, and consortium blockchains.

Type	Who can join	Example	Benefit	Limitation
Public	Anyone, with no permission needed	Bitcoin, Ethereum	Highly transparent and secure, with no central control	Slower and uses a lot of energy; little privacy because the data is visible to all
Private	Only people approved by one organization	A company's internal ledger	Fast, with strong privacy and full control over data	More centralized, so it relies more on trust in one owner and has a single point of failure
Consortium	A pre-approved group of organizations	A group of banks sharing one ledger	Control is shared between members, with good speed and privacy	Harder to set up, because members must agree on rules and governance

In short, a public blockchain is open to everyone, a private blockchain has one owner, and a consortium blockchain is run by a group of owners. The best choice depends on how much openness, speed, and privacy an organization needs.

3. Blockchain Applications

Blockchain is already used in many industries. Two clear examples are finance and supply chain management.

3.1 Finance: Digital Payments

In finance, blockchain records money transfers on a shared and verified ledger. This allows payments to move directly between parties without depending on a single intermediary.

Real-world example: Bakong, the payment system launched by the National Bank of Cambodia, is built on distributed ledger technology. It lets users transfer money between banks and mobile apps.
Benefits: Faster transfers, lower transaction costs, and a transparent record of every payment.

3.2 Supply Chain: Food Traceability

In a supply chain, each step of a product's journey, from farm to processing, shipping, and store, is recorded on the blockchain. Anyone with access can check the full history of the product.

Real-world example: IBM Food Trust, used by Walmart, traces fresh produce from the store shelf back to the farm in seconds, where the same check previously took days.
Benefits: Faster recalls when food is unsafe, less fraud, and greater consumer trust.

Healthcare is another possible application. Blockchain can protect patient records and show who has accessed them. Estonia, for example, uses blockchain technology to secure its national health records.

Conclusion

Blockchain combines blocks, a linked chain, nodes, and decentralization to keep a record that is secure, transparent, and hard to alter. Public, private, and consortium blockchains each suit different needs, depending on how open, fast, and private the network has to be. The examples of Bakong in finance and IBM Food Trust in supply chains show that blockchain is already solving practical problems, including in Cambodia.

References

Central Banking. "Cambodia officially launches quasi-CBDC." centralbanking.com
The Block. "Report: Cambodia's central bank has launched its Hyperledger-based payment system." 28 October 2020. theblock.co
Linux Foundation Decentralized Trust. "Walmart Case Study." lfdecentralizedtrust.org
TechCrunch. "Walmart is betting on the blockchain to improve food safety." 24 September 2018. techcrunch.com
e-Estonia. "e-Health Records." e-estonia.com
SiliconANGLE. "Estonia partners with Guardtime to secure 1 million health records with blockchain technology." 3 March 2016. siliconangle.com

Blockchain Fundamentals – Assignment