The popularity of the blockchain technology has had a meteoric rise in recent times. It has dominated many discussions on technology, business, finance and government operations. Bitcoin is a cryptocurrency developed by Satoshi Nakamoto in 2008, and blockchain is a backbone technology and a distributed transactional ledger for the operation of Bitcoin.
Blockchain has truly emerged to be a revolutionary technology. It has shown the capacity to steer a paradigm shift from the central authoritative control that characterizes conventional financial, industrial, business and governmental structures and processes. This decentralization has given rise to an approach that is generally considered secure, transparent, fast, cost-effective and efficient.
There may still be some areas yet to be envisioned, giving credence to the belief that perhaps the creators of blockchain did not envisage its revolutionary prospects. This view is held by many computer experts, financial analysts and business executives that have specialised in cryptocurrency technology. There is a wide array of benefits of this highly intelligent blockchain technology. Listed here are 8 popular benefits:
1. Fast and efficient
Blockchain has generally proven to be fast and efficient, as it manages its records on a single digital ledger shared amongst users thus eliminating the need and time of reconciling multiple ledgers. In addition, it also eliminates the need for paperwork and human interference which comes with the possibility of errors which usually characterize conventional systems.
2. Enhanced security
Blockchain is a highly secured technology. Its transaction records are difficult to compromise as they are not stored on a single server as obtained in many conventional systems. Rather, they are stored across networked computers thus preserving their integrity. Furthermore, its security is ensured by the cryptographical encryption of approved transactions and linkage to the previous one. Also, no third party is involved in making or verifying transactions as users can do these themselves. This limits the technology’s susceptibility to unauthorized access.
Transparency is essential in any dealing involving two or more parties. Not only does it breeds trust, but it also makes room for peaceful coexistence between the parties and progress for their joint venture. Blockchain being a distributed ledger system provides an unparalleled transparent scheme with accurate, reliable and unassailable records of transaction accessible to all users. Altering or deleting its records would imply going through the almost impossible task of getting the consent of each member and alteration of subsequent records. This transparent nature of blockchain has necessitated its exploration into other processes requiring a high level of transparency besides cryptocurrencies for which it was originally created.
Since blockchain eliminates the need for intermediaries to make, monitor and verify transactions, the operating cost of businesses and systems using blockchain will expectedly be cheaper. The significant savings obtained from the elimination of third parties can be employed in some other aspects of the business for higher efficiency.
5. Supports easy auditing
Auditing is essential to the growth, development and sustainability of any system and auditing blockchain processes are easy. This is largely a consequence of the indefinite, sequential and permanent recording nature of blockchain transactions. Verification and tracing of transactions are also convenient.
This is a major benefit of blockchain as most of the other benefits especially security and transparency are hinged on it. These mentioned benefits are consequent to the decentralized and distributed nature of blockchain. This nature requires it to use a network of computer nodes over data storage in a central hub. With the realization and appreciation of the decentralization benefits of blockchain over the usual centralized nature of conventional systems and processes, many businesses and industrial experts clamor for the adoption of blockchain in many enterprises.
Blockchain transactions are extremely difficult to be modified or altered. This is mostly because of the sequential order in which the transactions are presented, coupled with their cryptographic encryption and the need for unachievable consensus among users before the alteration of any record. Blockchain data are usually accurate and reliable increasing the need for the application of the technology in other areas especially those requiring high data integrity.
8. Future Prospects
Blockchain is a revolutionary technology fast finding relevance and applications in many areas. Blockchain has been commonly described as a technology to be continuously monitored both now and in future. Research is unrelenting in identifying emerging areas where it can be applied. With prospects of its application in other essential processes and systems, many technology and business captains are eager to witness blockchain realize its potentials.
Overall, it’s fair to say that blockchain provides secure and transparent operations to systems by keeping records of transactions across many participating computers and ensuring that its records cannot be altered retroactively, without the alteration of all subsequent blocks. Largely because of its decentralized nature, the relevance of blockchain has been explored beyond cryptocurrencies and financial systems. Some of the newly explored areas include energy supply, demographic processes, smart contracts, supply chain management, quality assurance, health care, cyber security etc.