In today’s environment, two unfamiliar people or organizations generally rely on a common third party or organization to transact with each other.

For example:

• A government-issued identity card is generally trusted to identify a person.
• The government land-registration department is generally trusted when buying or selling a house or land.
• The regional transport office is generally trusted when buying or selling a vehicle.
• Money transfers are made from one bank to another, so banks are generally trusted.

This creates dependence on a third party. The third party or organization that records these transactions retains complete control over the data. There is no transparent permission to verify these transactions.

Blockchain addresses these problems. It is built on a peer-to-peer network (P2P network).

• Its design creates trust.
• Data and management are decentralized.
• Every participant has a copy of the ledger.

The following pages explain how this works.