Blockchain: something we hear a lot about these days. It started with the launch of Bitcoin and quickly made its way into consumer business. Blockchain won the childhood part and today’s businesses are ready to use it in its full form – except for its obvious applications in financial institutions.
While cryptocurrencies were the first to favor blockchain implementation, today the technology is transforming all leading industries. spotify has acquired the first blockchain Mediachain Labs to create a solution based on a booking database that links artists and licensing agreements to a number of platforms.
Another example of a widespread blockchain application is Warranteer. this is a blockchain application that enables customers to get information about the products they buy and find customer service quickly in case of any inactivity. It is clear that blockchain has broken the shackles and entered the realm of large-scale business operations, proving its effectiveness.
How does blockchain work?
To illustrate how blockchain works, let’s take an example of its most common application – Bitcoin. Bitcoin is a digital currency, similar to other world currencies. To keep track of how many individual bitcoins you have, the blockchain uses a ledger system – a file that stores and monitors all transactions.
The ledger file is not stored on a central server – which brings us to the USP of the blockchain – for system design. The ledger file is distributed globally and stored on private computers that are used to store data and perform calculations.
If X wants to send 5 bitcoins to Y, they will send a message to each node (personal computer) saying that X’s bitcoins should be reduced by 5 and Y increased by 5. Now, each computer receives this message and edits their copy. the bitcoin measurements of X and Y.
The superbull blockchain allows everyone to see each other’s transactions and does not force you to trust any individual or organization. Instead, important mathematical functions and codes are used to ensure security and reliability. Each wallet is protected by an encryption method that uses selected interlocking keys: a public key and a private key.
The Benefits of Blockchain
Blockchain is a no-brainer game-changing technology for anyone who chooses to use it efficiently. Let’s discuss the benefits of blockchain-
Transparency – Blockchain makes transaction accounts more transparent than ever before. Because it is a form of sharing, all nodes in the network share a copy of the text. The data on the blockchain ledger is easily visible to all. If a transaction history changes, everyone on the network can see that change and the record is updated. Therefore, all information about the currency exchange can be seen by everyone.
Security – Blockchain is better than any other system of record in terms of security, with all the rules in place. Shared transaction files can only be updated and/or modified by protocols on the blockchain network. Information will only be processed if each or every node agrees to edit the record. Furthermore, if a transaction is approved, it will be closed and linked to the previous transaction. Therefore, no individual or party has the opportunity to change the record.
The blockchain has been reduced so that no one retains the right to update the record for their free use. Any industry like government, health, financial services, etc. that has a significant interest in maintaining that much data can use blockchain to ensure strong security.
Efficiency – Traditionally, with paper-based systems, transaction financing is cumbersome because it seeks to coordinate third parties and targeted human error. Blockchain can simplify and streamline these traditional processes, eliminating the risk of fraud and making transactions more efficient and faster. With only one book, parties do not have to keep many documents, and the truth leads to many shortcomings. Also, it is easier to build trust when everyone has the same experience. Accommodation can also be neat and uncluttered without any agent requirements.
Traceability – In the tightest of ICO supply chains, it can be difficult to trace a product back to its source. But with blockchain, exchanges are recorded, so you can explore a way to identify the origin of assets. You can also learn about each stall of the product made during the trip & this step-by-step guide can help prove the truth and prevent fraud.
The downside of blockchain
Every coin has its flip side. Blockchain is in about its infancy today, and there are a few drawbacks that need to be addressed before it can be used more effectively in everyday life.
Scalability – Blockchain’s application of Bitcoin is the most popular. As a result, it can only process 7 transactions per second, while Hyprledger can handle 10,000 and 24,000 visas. The effective use of blockchain makes it more difficult to imagine scalability issues. Each participating node needs to identify and allow transactions, so a single bitcoin exchange can take hours.
Security – Since the blockchain database is permanently stored on each network node, it is a matter of space storage. As the number of transactions increases, the size of the database will only get larger, and a single computer cannot store an infinite amount of data that is just being added. From this perspective, the ethereum blockchain is expanding at a rate of 55 GB/year.
Confidentiality – Data on the public blockchain is encrypted and anonymous, but it is in the hands of all nodes in the network. Therefore, everyone in the network has access to this data. It is possible for someone to track a person’s identity in the network through transaction data, much like the web trackers and cookies that businesses often use. This suggests that the blockchain is not 100% secure, unfortunately.