What makes blockchain special?
Well, you may need to dig deep to understand blockchain technology as a whole but as quick perusal, the sudden rise of cryptocurrencies have definitely increased the interest of common man into blockchain technology lately. At the heart of the surge in blockchain technology is simply the quest and interest surrounding the cryptocurrencies in recent times. Though the blockchain technology exists for long time but it has seen the colossal rise in last couple of years widely due to rise in cryptocurrency prices. In this article, we have discussed more about blockchain and its benefits for users.
What is Blockchain?
Blockchain or Block Chain is an open distributed ledger that has ability to record transactions between two parties effectively. Here, it record transactions in verifiable and permanent way. It is typically managed by a P2P or peer-to-peer network further adhering to a protocol for validating all new blocks. Here, its all blocks are linked and secured using cryptography.
Top 7 Benefits of Blockchain Technology
The foremost benefit of using blockchain technology is that it brings greater transparency to transactions. This widely open-source technology allows users to amend and modify it the way they want it to. Despite being open-source, its security mechanism is hard to break making it almost impossible to alter logged data within a blockchain system. Here, logged data is viewed and maintained by numerous users on open-platform thus changes remain accessible to all members.
Allowing users to verify each transaction within the network blockchain remains most secured technology. Here, it uses complex and independently verified cryptography technology to authenticate the information. It allows users to verify the transactions without a need for third-party involvement. It drastically reduces the chances of unauthorized intervention and backdoor transaction risk. Here, the more widespread the environment would be the more it would be difficult to tamper the data. Further, it displays transaction addresses to provide Pseudonymity to users.
Blockchain technology doesn’t rely on a central data hub or servers. Here, its data remain in control of users on their personal servers. It allows users to run individual transactions with their own proof of validity and authorization for improved user experience. Further, it is also important for security reasons as in case a small piece of information fell into the cybercriminals hands the entire network would not be compromised.
Faster Transaction Settlement
Due to certain constraints and protocols it takes hours and days to make transaction through banks. Here, various financial institutions also work in different time zones which increases transaction time further. To deal with the issue, blockchain technology offers you faster and smoother transaction 24/7. Here, you need to submit all necessary information to instantly make transactions in a seamless manner. Further, instantaneous settlements could help businesses reduce their transaction cost significantly.
Reduced Transaction Cost
Blockchain works on peer-to-peer and business-to-business transaction model while eliminating intermediaries and overhead cost for exchanging assets. Here, when there are no intermediaries or third-party (usually banks or financial institutions) involved in transactions it reduces transaction cost significantly. Further, banks could leverage blockchain technology to reduce the cost to the user over time.
While making transactions on blockchain technology, it records all transactions in an indefinite and sequential manner to provide an indelible audit trail for both the parties. Here, this is useful when source data is important to verify an asset authenticity. For example, some big diamond companies are realizing the benefits of it by tracking diamond’s source.
Transactions are completed directly between two parties in blockchain thus it offers better efficiency and instant transactions. Further, you operate “Smart Contracts” to trigger commercial exchanges for things, money, property, content, share etc. Here, once all the obligations are met that are mentioned in the contract the transaction would be done. It is another useful feature to streamline processes better to save time and cost. It also reduces clutter and complexity of multiple ledgers.
Blockchain technology offers better efficiency, security, transparency, and cost-effectiveness to users to prove to be an advanced transactional application for new generation. Here, opportunities are wide with blockchain technology as it is not only limited to the financial sector but people from many other industries can reap the benefits of it. In fact, blockchain could transform systems in various traditional fields like healthcare, manufacturing, entertainment and so on. It’s almost surreal to think that blockchain can replace many existing technologies in coming years effortlessly.