Today's world is more digitized than ever before. From Education to financial in-outs, we have mobilized our lives drastically. Of all the influential technologies of the modern world, Blockchain technology certainly dominates the market. Ever since the introduction of bitcoin in 2008 (the first decentralized digital currency), innovators across the globe have widely accepted the importance of BlockChain technology.
Let's understand Blockchain in detail.
What is Blockchain Technology?
In simple terms, Blockchain technology is a digitally distributed, decentralized, public ledger that facilitates recording information about digital assets' ownership.
Blockchain Technology has paved a new alternative that could completely digitize the financial system. Moreover, it's helpful, like lower risk, unwarranted cost reduction, transparency, etc. This certainly makes the Blockchain a reliable technology for the future.
Why is Blockchain Technology so important?
Blockchain technology was first recognized in 2008 under the research paper published by Satoshi Nakamoto named "A peer-to-peer electronic cash system ."Since its introduction, Blockchain Technology has made tremendous progress in business economics.
We see that businesses run on information. The information serves as the lifeline for the development of any business. The faster the information, the better the accuracy. Blockchain provides immediate and transparent records that can be stored effectively on the ledger. Furthermore, these ledgers are immutable and can only be accessed by permission-based networks. This unique quality makes blockchain technology highly secured in nature.
Apart from these, there are various advantages and disadvantages attached to effective blockchain technology. Let's discuss them in detail.
Advantages of Blockchain Technology
- Open Source: Blockchain technology is based on an open source framework, meaning it can be accessed by members of all means, without any third-party intervention. Joining the blockchain network is open, and one doesn't need permission to join the network.
- Verifiable Technology: Blockchain technology stores data in digitized public ledgers, meaning anyone can verify the correctness of the transactions with other systems without sharing anything about the data.
- Permanency: Data loss in blockchain technology is least likely, as duplicate copies of the records/transactions are stored in each local node.
- Cost-reduction: Blockchain Technology doesn't require any mediator. Therefore it reduces the cost for the business and facilitates trust amongst parties.
- Efficiency: Blockchain Technology is a decentralized form of digital currency. This helps keep the proof of the transaction fee and increases its overall efficiency.
- Free of Censorship: Blockchain technology is based upon the concept of Trustworthy nodes, which are used for the validation and consensus protocols. The transactions are approved with the help of intelligent contractors.
- Tighter Security: In terms of security aspects, blockchain technology is highly reliable. It uses SHA 256 hashing techniques for storing each transaction on a block, which is connected. Thus, providing high-end security.
Disadvantages of Blockchain Technology
- Scalability: Probably one of the most significant drawbacks of blockchain technology. Blockchain technology uses blocks to store every transaction. The file size of these blocks is 1 MB, which can hold only a couple of transactions on a single block.
- Immaturity: Blockchain technology is only a couple of years old. Therefore it lacks people's confidence. It's true that the technology is appreciated and accepted by different states and is doing well in different departments, yet it needs to grab more public confidence.
- Time-consumption: The time taken by miners to develop the next block in the chain meter is comparatively long. This process needs to speed up to make it worthwhile for industrial purposes.
- Regulations: Blockchain faces challenges from various financial institutions. It requires other aspects of technology to accept blockchain technology on a broader base.
- Energy Consumption: According to one report, nearly 0.3 percent of the world's electricity was used in 2018 to verify transactions made using blockchain technology. This certainly needs to be improved for higher efficiency and wider use.
Industries that can benefit from Blockchain Technology
- Energy Sector
- Trade Finance Sector
- Real Estate Sector
- Logistics Sector
- Government Sector
Let's discuss a few of them in detail.
Benefits of Blockchain in the Energy Sector:
The Energy Sector has always been an essential aspect for Governments. Without effective energy management, it's difficult for governments to ensure valuable growth and development for the economy. With the advantage of blockchain technology, many benefits can be achieved in the energy sector, which is as follows:
- Cost Reduction: Costs of infrastructure and operational aspects are highly reduced.
- Higher Transparency: The technology stores transactions in the ledger, which are immutable. The use of distributed ledger improves transparency.
- Facilitates Environmental Sustainability: Blockchain facilitates environmental sustainability, as it reduces unwarranted burdens with an alternative network that produces, stores, and distributes energy more efficiently.
Benefits of Blockchain in Healthcare:
Healthcare, too, needs a complete revamp. Proper implementation could help healthcare systems provide better services to their patients. The benefits are countless; here are a few of them in detail.
- Profile Privacy: Decentralized ledger means a unified profile. This patient need not need to carry paper files as everything gets stored on a secured ledger. Further, it allows users/patients to decide who has the right to access their data.
- Drug Traceability: Drug Traceability can also be improved with Blockchain Technology. As everything can be tracked in real-time.
- Electronic Health Records: With Blockchain technology, healthcare systems can easily manage digitized records.
Blockchain is indeed a path-breaking technology that has an impact across sectors. With the proper utilization of blockchain technology, the right decisions can bring better scalability and prosperity for the business.
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