Blockchain is a newer technology that is becoming more and more popular among a variety of industries. Organizations in all fields have been adopting blockchain technology for their network base as they realize just how many benefits there are to using blockchain.
What is Blockchain?
Blockchain is based on peer-2-peer technology. Each transaction in the system is built on top of the transaction that came before it. Additionally, the network is spread across an entire system of computers, called nodes, and all of the nodes must accept every transaction.
What are the Benefits?
There are many benefits to blockchain technology, mainly based around the increased security and verification standards. Here are ten benefits of using a blockchain system.
- You no longer need third parties for verification, reducing the fees that come from outside services. For this reason, blockchain has become extremely popular in the financial technology industry.
- Each transaction can be tracked, sourced, and accessed by any authorized user, making blockchain a transparent system.
- Data cannot be altered or deleted once it is added, only appended.
- Every transaction is automatically timestamped. Since it is in chronological order as each transaction is built on top of the previous one, transactions are marked with the time they occurred.
- The decentralized nature of blockchain means that data can always be recovered. Each system stores and shares information, so it is spread across every computer, keeping the data safe.
- While they are not impossible to hack, blockchain networks are much safer than traditional systems. Hackers have to gain access to all of the computers on the network.
- Users can create and manage smart contracts on blockchain networks. Smart contracts execute actions when contractual conditions are met, allowing parties to guarantee the contract is being fulfilled.
- Because the system requires every node to agree before a transaction is accepted, duplicates and copies are avoided.
- Blockchain systems are more efficient and faster than traditional networks.
- Another security advantage to blockchain is that it employs digital signature and encryption.
While blockchain technology has many benefits, it also has its downsides. It takes a large number of computing resources, and it does have some difficulty with scalability. If you think a blockchain network might be a good fit for your organization, consider all the aspects before committing to it. Nonetheless, blockchain technology is a safe and verifiable way for many organizations to conduct transactions.