There’s a lot of interest in blockchain technology these days, which you’ll no doubt have heard about. We believe that blockchain technology can revolutionize various sectors in the same way Big Data and even the internet has done in the past, once we get rid of the hype and address some teething problems.
Throughout this article, we’ll look at the tangible advantages that blockchain technology may offer to businesses and will argue why you might in the future choose a blockchain over a conventional database.
What Is Actually Blockchain, And How Does It Work?
A blockchain is a method for storing data that employs a type of computer file known as a blockchain. It may also be referred to as an open, distributed database in more technical terms. The data is dispersed (i.e., replicated) among many computers, and the blockchain is completely decentralized. Because of its distributed nature, no single person or organization (such as a government or corporation) has complete control and command over the blockchain; this is in stark contrast to centralized databases managed and governed by businesses and other organizations.
So, how does it work? A file is made up of data blocks linked to one another in a chain, with each successive block being linked to the previous. As a result, the term “blockchain” was created. The data inside each block is also accompanied by an audit trail that shows when the block was generated or updated, making it extremely valuable for maintaining a complete set of records that can’t be damaged or lost.
Because the complete blockchain has been duplicated across numerous computers, each user may access the complete blockchain. Rather than being handled by a single administrator, transactions and records are processed via a network of users who collaborate to check the data and reach an agreement. If this sounds familiar, it’s because Bitcoin works in much the same way as other digital currencies. Bitcoin is the first real-world use of blockchain technology in the world.
Advantages of Blockchain Technology
Blockchain technology has various advantages, some of which are listed below. Here are some of the most significant benefits of blockchain technology:
- No Centralized Control
There is no centralized control. A central administrator and the associated costs and infrastructure are no longer required because the system of record is decentralized and duplicated in its entirety across several locations.
- Safer and Hacking-resistant
It is not possible to hack from a single, centralized position. Blockchain’s decentralized architecture for data storage and access makes the whole system quite safe since there is no single point of entry for hackers to exploit, unlike a centralized database. As a result, it’s particularly well-suited for recording transactions in a secure and safe environment.
- Throughout track-records of data
You’ll get a narrative of events rather than just one picture in time. In a typical database, you’re looking at data that is up to date at the present moment. Both blockchains and bitcoin maintain a record of all of the data that has preceded it. If you want to call it that, it’s a database with a history.
Why Blockchain is the Future?
Blockchain technology is being used increasingly in various sectors, including food service, food production, banking and finance, retail and distribution, energy, intellectual property management. Many industries already see transparency, security, and traceability through blockchain usage. That’s why, blockchain is the future.
Here are the top 3 most dynamic industries that will be revolutionized by blockchain technology in the near future:
- Cyber Security
- Supply Chain Management
1. Cyber Security
Previously, Cyber Attacks were an important public safety issue. Several organizations developed an effective solution to secure the data against un-authorised access and tampering.
- Because of the peer-to-peer connections, blockchain detects fraudulent attacks quickly because data cannot be tampered with.
- Every bit of data on the blockchain network is verified and encrypted using a mathematical method.
- Blockchain’s distributed nature allows for the transparent and secure recording of transactions (without disclosing your personal information to anyone) by eliminating the centralized system.
Transferring money between accounts can be costly and time-consuming for consumers. Furthermore, sending cash across borders gets more difficult due to the exchange rate and other hidden expenses.
- Blockchain eliminates the need for a middleman. Blockchain disrupts the banking system by providing a peer-to-peer payment system with the best security and low costs.
- Blockchain technology allows for rapid, borderless transactions across the world.
- Cryptocurrencies (e.g., Ethereum, Bitcoin) eliminate the need for third parties to execute transactions.
- All bitcoin transactions are recorded in a public ledger known as the blockchain, which is publicly accessible to bitcoin users.
3. Supply Chain Management
Because of the opacity, supply chain management frequently had difficulties such as service redundancy, lack of cooperation among departments, and dependability.
- Blockchain can track a product throughout the supply chain by allowing for traceability across the board.
- Blockchain allows multiple supply chain partners to verify and audit transactions, making the management system more transparent and efficient.
- A blockchain is a distributed ledger that keeps track of product transactions (history, timestamp, date, etc.) in a peer-to-peer network.
- A block is formed from each transaction.
- Anyone can verify the validity or status of a delivered item using blockchain.
What Are The Disadvantages Of Blockchain?
There are two situations in which blockchain isn’t always the best solution.
- Blockchains are great transaction platforms for experts, but they aren’t the best solution for ultra-quick digital transactions that happen in milliseconds or less. At the same time, blockchains are ideal for transactions. Given that blockchains need a lot of computer power, a centralized database is expected to be a quicker and more cost-effective method of processing and storing information for rapid transactions.
- Second, blockchains are inherently open information networks, making them extremely appealing. Because of this, where secrecy is a major concern, a private database is (at the very least for the time being) the better option.