Nowadays everyone must have heard about the term Bitcoin, and a few of them must have some bitcoins with them and have pursued some transactions with them. It has gained popularity since it works without a central repository or administrator which is not the case in traditional currency. Now a major question arises, how are the transactions verified in such a case. It is where the blockchain comes into play. Now a question may come to your mind what is a blockchain.
The blockchain is a list of records also known as blocks that grow continuously. It is a digitized, decentralized, public ledger of all cryptocurrency transactions. It makes use of a distributed ledger technology (DLT). These are linked to each other and are also secured with the help of cryptography. In it, the most recent transactions are recorded and added to the blocks in chronological order and also allows its participants to keep track of their digital currency transactions without the need for central recordkeeping. Each node (a computer connected to the network) gets a copy of the blockchain, which is downloaded automatically.
There is a great debate going on nowadays as to whether the blockchain is a fad or is really going to change the world. Before diving into the question, it is necessary to understand the fact that Bitcoin and blockchain are two different concepts. Although originally it was developed mainly as the accounting method for Bitcoin it can be used to accompany some other industries as well. Apart from that, it is also necessary to know about the problems in the traditional ledger methodology and the blockchain ledger methodology. Apart from that, it is also necessary that you have a proper idea of the same. Along with the same, a look at the current scenario can also help you deduce about the benefits of the blockchain.
Benefits of Blockchain
Here are some of the benefits that the blockchain offers over the traditional ledger methodology. These are:
In the current scenario, the transparency plays a major role in enhancing the business. More the transparency, better the business will perform. Blockchain facilitates you in achieving this as the control of the information of the users rests with them and also provides them complete control of their transactions. As any changes are accessible to all the users, it helps you to create a transparent system. It can help you to gain the trust of the customers and develop a healthy relationship with your users. Its transparency can be guessed from the fact that any user with access to a chain can view the entire chain and the transactions that are taking place in the chain.
One of the best benefits of blockchain is the security that it provides amazing security and helps you to provide assured information. With the help of complex cryptography, the authenticity of the information is assured and helps you to tap into the vast potential of IoT by linking assets to actions. Transactions and data that make use of this technology do not allow any changes to data once written. To undergo such a change, it requires that the all or a vast majority of participating computers agree to this change. This makes it impossible for any backdoor transactions. Hence it turns out to be quite secure for the transactions and to carry out tasks that require optimum security. As this technology is distributed across multiple data centers, it can ensure security against any network and hardware equipment.
Traditionally, the time taken to execute transactions is longer and may take days to process. In this case, the time taken is relatively lower and take mere minutes to process.
Less transaction costs involved
The elimination of third parties in the blockchain method reduces the transaction costs involved. This proves out to be beneficial for the users.