Blockchain technology is a relatively new concept and rapidly growing system, it provides an open, decentralized database of every transaction involving value (money, goods, property, votes…)
The first blockchain was conceptualized in 2008 it was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin.
This technology creates a digital record using math and cryptography. It can be compared to a linear chain of blocks connected to each other and containing hashed data, and are time stamped.
This chain represents a network whose authenticity can be verified by the entire community.
Now that you have an idea about blockchain, what are the advantages of this technology?
Blockchain is not controlled by a central authority. Meaning that it enables a database to be directly shareable without a central administrator.
Instead of being stored in one single point, the same transaction is stored in multiple nodes there is no central node processing and distributing the data, but every node can run independently and broadcast any work that is proved, so, if any data is lost it can be recovered very easily by copying from other nodes.
Unlike regular databases, blockchains contain every single block of information, from the beginning of time until just a few minutes ago.
Financial fraud can be significantly reduced as every transaction is being recorded on a public and distributed ledger accessible by internauts.
Participants are immediately notified about the completion of transactions, which is both convenient and trustworthy.
Blockchain technology is considered as a highly secure system to store data than any other 3rd party systems.
This is due to the use of cryptographic schemes ensuring complete encryption.
Blockchain security methods include the use of public-key cryptography.
A public key (a long series of numbers) is an address on the blockchain and data sent across the network are recorded as belonging to that address.
A private key is compared to a password that gives its owner access to their digital assets.
A digital signature is needed in all transactions through both private and public keys.
Using an explorer, and equipped with a user’s public address, it is possible to view their holdings. The record of transactions is also visible by any participant, so it is possible to track transactions in the public, decentralized ledger.
Any change in the logged data is seen by everyone, which adds to the transparency of the blockchain.
The supply chain is, for example, one of blockchain’s foremost use case management. The technology can allow for the rigid tracking of everything across the supply chain.
Blockchain allows peer-to-peer (P2P) and business-to-business (B2B) transactions to be completed without the need for a third party.
Since there’s no intermediaries involvement tied to blockchain transactions, it means they can actually reduce costs to the user or businesses over time.
No single individual or a company develops, sells or owns the software.
Being an open-source software, it is shared freely, transparently developed and published for the community instead of being a single organization or individual’s property with the aim of making a profit.
Besides, the software, being open source, any alteration of data is very difficult.
With blockchain, there is no need for third parties to make guarantees which means no need for extra fees.
The flow of data or money is quicker because of the absence of middlemen and no paperwork needed.
Documentation, procedural delays, discrepancies or errors costs can be avoided and replaced by a much cheaper cost of the blockchain.
Traditional transactions can take multiple days to complete while blockchain transactions can remarkably reduce transaction time.
Because blockchain is not hosted on a computer or a server it is hosted everywhere, every node connected to the network from different locations, so the system operates 24/7, which allows transactions to be made quickly and safely and that’s why blockchain does not face any downtime issue.
The blockchain technology is offering a different business model along with all the advantages mentioned above which guarantee global markets to be more accessible.
To summer up, here is the keyword to keep in mind: the blockchain technology is a decentralized, distributed database, compared to a giant, global spreadsheet that runs on millions and millions of computers in a secured, transparent, independent way.
It is also open-source and helps in reducing costs, transaction time and financial frauds.