Traceability

Traditional systems may allow participants to track a series of transactions to check on their status at any point in time or places where any errors may have been introduced. But often, this is a cumbersome process since older data may be archived and therefore not easily accessible or retrievable. Further, due to the lack of transparency and the ability of participants to change past data at will, tracing back any data may not be reliable.

The design of and technology in Blockchain systems maintain a clear and unmodifiable linkage between all transactions. Thus, at any given time, a transaction can be reviewed, and its origins tracked with an assurance that the data is accurate with every change trail that has been maintained.

In economics, fungibility is the property of goods or commodities whose individual units are essentially interchangeable and have the same current and future value. For example, gold is fungible since a specified amount of pure gold is the same, whether in the form of coins, ingots, or any other form. Other fungible commodities include currencies and equity shares in a company. On the other hand, diamonds and other gems are not fungible because their varying cuts, colors, grades, and sizes make it difficult to find two or more diamonds with the same current and future value.

Traceability as a requirement is quite useful in non-fungible goods. For example, in the process of manufacturing finished goods from raw materials, it is becoming increasingly important to both regulators and consumers to have the ability to trace the suppliers and the origin and quality of the raw materials at every step of the process. The inherent feature of a Blockchain solution that links transactions without the ability to modify them allows all records to be maintained and traceable.