The latest buzz word in tech circles is undoubtedly Blockchain Technology. The past few years have seen Blockchain come out of the shadows of its more illustrious elder sibling (Bitcoin) and establish itself. The world is slowly waking up to the possibility of using Blockchain to run everything from financial payments to healthcare.
Customer trust is at the center of what makes Blockchain incredibly promising. When Satoshi Nakamoto first developed Blockchain back in 2007-08, some called it the next biggest thing to the ‘Internet’. Over the last few years, Blockchain has progressed from being just a network that runs and records Bitcoin transactions.
In this article, we look at the technology that runs Bitcoin and tries to understand it in a better way. We also discuss some of the major advantages of using Blockchain in modern-day applications.
Blockchain: Meaning and Definition
A Blockchain is a decentralized record of transactions. Every time a Bitcoin transaction is done, a note is generated, verified by others on the Blockchain network, and added to a new block.
Everything that you do with a Bitcoin- buy it, sell it, or purchase goods and services with it, all are recorded on a decentralized ledger.
After a number of transactions are recorded, the task of one block is over. A new block then starts from where the old block ended and continues the task of recording transactions and entries.
A Blockchain transaction stays for life. It cannot be changed.
This makes it inviolable. It also makes the entire financial system by Bitcoin to be transparent, immutable, and credible. This is one of the major attractions of using Blockchain as a store of value and data.
This means that standard malpractices of traditional fiat currencies like frauds, forgeries, and others cannot take place when it comes to Bitcoins.
Top Advantages of using Blockchain Technology
1. Promotion of Transparency-
Ask anyone that uses digital payments about what is one thing that they would like from institutions are it would be ‘transparency’. Transparency in record keeping, commissions, hidden fees, and other important aspects of financial dealings.
Blockchain works on a shared consensus. It means that unless everyone agrees on the same, and gives consent, a transaction cannot go through. This helps in maintaining proof of ownership and ensures that no wrong transactions or transfers are done.
2. Safety and Security-
Perhaps the single biggest advantage of Blockchain technology is the fact that it is virtually ‘un-hackable’. Over the past decade, thousands of the best cyber experts have tried to use several techniques to corrupt Blockchain.
However, Blockchain has proven time and again that it cannot be tampered with or hampered. This is something that can prove to be very beneficial not only for financial payments, but also for healthcare, legal needs, and the sharing of important government data and information.
3. Traceable Transactions-
Everyone keeps saying how Bitcoin and other cryptocurrencies are being used for illegal activities. However, in reality, there is not even a shred of evidence that they can present to back up their claims. This is because every Bitcoin transaction is traceable in nature.
The traceability element that is inbuilt into Blockchain makes it the most credible and transparent financial medium ever. Every Bitcoin’s record, ownership, how, and where it was used has records, which can easily be surveyed and found out.
4. Lightning-Fast Transactions-
Blockchain is fast. At the end of the day, you want a financial payments system that is quick, fast, and effective. By removing third-party consent and mediation, Blockchain ensures that transactions take place at lightning speeds.
This finds particular prominence in the world of global trade and commerce. When businesses are moving money and materials across countries and continents, they do not want to wait weeks for banks to give consent to transactions. Using Blockchain can help mitigate those.
The Bottom Line
The world is waking up to the fact that they might just have technology as big as the internet on their hands. Every Fortune 500 company has set up specialized teams to R&D Blockchain technology. In the near future, most experts believe that Blockchain will experience far greater real-world applications that merely running Bitcoin transactions.