These days, blockchain technology is one of the most talked about topics of research, debate, and hype for tech giants and large organizations across the globe.
A significant number of industries are increasingly adopting this technology, which is considered one of the biggest revolutions of information technology.
It’s important to understand that though some people often use Bitcoin and blockchain interchangeably, in reality, they’re absolutely different.
Put simply, Bitcoin is a form of virtual currency and blockchain is the underlying technology that makes it possible.
If you’re interested in purchasing any cryptocurrency including Bitcoin, it’s important to have a good understanding of blockchain technology, why it’s being widely used, and what lies ahead in the future of it.
1- What is blockchain?
Put simply, blockchain refers to a virtual, public ledger that records everything in a transparent and secure manner.
Here, all the data is held in an interconnected network of computers that’s owned and run by only the users themselves.
Although the technology was initially developed to work only in the financial arena, it has already started taking over other industries through its huge potential and slowly becoming an absolute game changer.
According to some experts, blockchain technology is much more promising than the cryptocurrencies it was designed to support. With its implementation, more valuable usage opportunities are coming into existence almost regularly.
2- Major advantages of using blockchain
Here’re the major pros of blockchain for which the technology is being widely adopted across industries.
World’s largest corporations use centralized data systems as well as servers. Even though these corporations implement and maintain best network practices, their data systems and servers act as attractive targets for hackers and the operations may get affected.
Decentralization offered by blockchain prevents this problem and this is why this technology is being adopted by several industries. Here, every node on the network holds the same data as the others. Thus, in the event of any node breaking down, it won’t affect the entire network.
One of the biggest pros of blockchain is that the technology is open source in nature. It means developers and other users have the ability to modify it as they deem fit.
But what’s more important about blockchain being open source is that it makes modifying logged data incredibly difficult.
At any given point of time, since there’re numerous eyes on the network, someone is most likely to see that the logged data has been modified.
As we’ve discussed earlier that no single actor can manipulate the blockchain network, it helps to take security to the next level. Here, whatever is performed on one node has to be replicated as well as agreed by other nodes before the action becomes active. This means a single actor like an employee’s hacked computer or a compromised employee cannot take the entire blockchain network down.
Reduced transaction cost is one of the other biggest pros of blockchain.
The technology allows business-to-business and peer-to-peer transactions to be completed without any involvement of a third-party like a bank.
This elimination of the involvement of middleman leads to reduced cost for the businesses or users over time.
2.5- Quick transaction settlements
It’s widely known that transactions take days to settle completely when it comes to traditional banks. This delay mainly happens due to protocols in software, fixed business hours, and the difference in time zones, among others.
On the other hand, blockchain technology works round the clock, which means transaction processes based on it are completed relatively more quickly.
2.6- Ability to keep both current and historical records
When working with regular databases, it’s quite difficult to check historical transactions. In blockchain, all historical and current transactions are recorded securely in one place. So, if you want, you can go back to check the first blocks to learn where it all started. Here, every single block of information is contained, from the very beginning of it until just a couple of minutes ago.
2.7- User control
The reason why blockchain is particularly encouraged by cryptocurrency investors is its control aspect. Here, users and developers control all their transactions and information instead of having a third-party perform it. In other words, you can consider blockchain to be something that’s by the people and for the people.
So, you can see that blockchain technology offers a spectrum of revolutionary benefits. Altogether, they offer the most profound quality of this technology — it doesn’t require trust to interact and transact safely.
With the help of blockchain technology, traditional systems can be transformed into dynamic systems where trust doesn’t matter as it’s no longer required.
This facilitates establishing ownership of anything unquestionably, without the requirement of a central authority.
3- Industries that widely use blockchain technology
Blockchain technology is being steadily adopted by some specific industries to enjoy the above benefits. Let’s have a look at them.
3.1- Quality assurance
If an irregularity is observed somewhere along the chain, a blockchain-enabled system can lead the user to its point of origin. This makes it much easier for users to carry out investigations and execute necessary actions. You can consider the food sector, for example, where tracking origination, batch information etc is crucial in order to maintain quality and safety.
3.2- Supply chain management
In this industry, blockchain offers the advantages of cost-effectiveness and traceability.
For example, businesses can use a blockchain to track the origin of goods, their movement, and quantity, among others. This brings an enhanced level of transparency while simplifying processes like production process assurance, ownership transfer, payments etc.
Blockchain technology can be used by accountants to record transactions, minimize human error, and increase accuracy. Blockchain-based accounting systems are also able to protect sensitive data from fraudulent or illegal manipulations.
Here, an accounting change needs to be verified by the network of nodes. Put simply, accounting heavily encircles audit trails and blockchain helps to develop a secure audit trail.
3.4- Global payments
This is one of the most prominent industries that can benefit from the implementation of blockchain technology. There’re some services that can effectively transfer money across the globe. Some of the major issues with them are high fees, slow operation, absence in some countries etc. When it comes to blockchain-based currencies, the fees are significantly lower.
In addition, a blockchain-based payment network also boosts of speed and security.
There’re lots of other industries that rely on blockchain to a great extent. However, there’s one thing facilitated by this technology that can benefit every type of business. You’re probably aware that time-consuming contractual transactions can lower the growth of any business, especially for organizations that process a huge amount of communication consistently. With smart contracts, agreements can be validated, signed, and enforced automatically through a blockchain construct, thus helping the business save both time and money.
4- Future of blockchain
Blockchain technology comes with immense power to impact almost every industry. Based on recent developments in the field, here’s what the future of blockchain would look like.
4.1- Blockchain as a service
Just like other platforms help organizations to manage operations, we can expect to see the growth of new platforms with decent features for implementing a blockchain network for businesses. Blockchain as a service or Baas is a cloud-based service that can be leveraged by companies without the need for setup and infrastructure.
4.2- Hybrid blockchain
A hybrid blockchain is the combination of both private and public blockchain.
The major advantage of a hybrid blockchain is that specific parts of the network can be kept private, and specific parts public.
This would be faster and cheaper than a public blockchain, while allowing access to the blockchain advantages of the same.
4.3- Implementation of blockchain in big data
With features like decentralization, immutability etc, blockchain can take care of two major challenges of working with big data — authenticity and restricted access to maintain quality of data and control. Data security and privacy are unquestionably two major concerns to businesses. Centralized data is insecure to a good extent.
But with blockchain, data can be managed by the users generating the data, thus leading to more data security and privacy.
In addition, data generated through blockchain needs less scrutiny as the probability of manipulating such data is extremely low. It combines cryptography and hashing to develop data stored in a series of blocks that’s almost immutable.
So, blockchain with big data is expected to become a powerful tool for both small and big businesses, redefining the way data is being handled.
As with any technology, blockchain also comes with some disadvantages like complexity, lack of adequate resources, and the probability of human errors, among others.
However, considering the fact that blockchain ticks all the right boxes of becoming the technology of the future, there’re lots of reasons to learn it and if possible, get certified in it.
Though the technology is still confined to a limited number of industries, there’re lots of possibilities for it to expand its reach to various other domains soon enough. Though it may take a couple more years, blockchain is certainly going to change the tech domain once again.