Blockchain Technology

blockchain

Couple of years ago the blockchain hype was everywhere. The hype might fall a little but the significance of blockchain is here to stay. This technology solves some decades old problems and it might revolutionize many industries. In this post, we look at very real advantages blockchain technology can bring to businesses.

Blockchain Security: 3 Ways to Secure Your Blockchain - Thales blog
Image Source: Thales

What is blockchain

A blockchain is a computer file for storing data, or in a more technical term, it is an open and distributed database. The data is distributed across many computers and the whole data is decentralized. That is why no one person or entity has control over the blockchain.

Benefits of blockchain

You get a history of activity, not just a snapshot in time. When you look at a regular database, you’re getting a snapshot of data that’s up to date in that moment in time. Blockchains do this too, but they also maintain a record of all the information that existed before. It’s a database with history, if you like.

There’s no one, central point of attack. The fact that blockchain is a decentralized way of storing and accessing data makes the whole system incredibly secure – because, unlike a centralized database, there’s no one single point of entry for hackers. This makes it particularly useful for recording transactions in a secure manner.

And no centralised control. Because the system of record is decentralized and replicated in its entirety in multiple places, there’s no need for a central administrator and all the costs and infrastructure that comes with it.

When might you use blockchain

Blockchain is certainly exciting and has the potential to transform how many businesses operate, but that doesn’t mean it’s the right solution for every scenario. Here’s why you might choose blockchain over, say, a standard database:

When you want to manage and secure digital relationships or keep a decentralized, shared system of record. Anytime you want to keep a long-term, transparent record of assets (for example, to record property or land rights), blockchain could be the ideal solution. ‘Smart contracts’, in particular, are great for facilitating digital relationships and transactions. With a smart contract, automated payments can be released when parties in a transaction agree that their conditions have been met.

Anywhere a middleman or gatekeeper function is expensive or time-consuming. For example, most accommodation providers currently have to interact with guests via a centralised aggregator platform, like Airbnb or Expedia (who, in turn, take a cut on each booking). Blockchain could change all that. For example, travel company TUI is so convinced of the power of blockchain, it’s pioneering ways to connect hoteliers and customers directly, so that they can transact via blockchain in an easy, safe and consistent way, rather than via a central booking platform.

When you want to record secure transactions, especially between multiple partners. A traditional database may be good for recording simple transactions between two parties, but when things get more complicated, blockchain can reduce bottlenecks and simplify relationships. For example, shipping conglomerate Maersk is working with IBM to develop a private blockchain platform to connect its various partners and customers across the shipping industry. What’s more, the added security of a decentralised system makes blockchain ideal for transactions in general.

Where the data is in constant flux, but you want to keep a record of past actions. Blockchain is a better, safer way to record activity and keep data fresh, while maintaining a record of its history. The data can’t be corrupted by anyone or accidentally deleted, and you benefit from both a historical trail of data, plus an instantly up-to-date record.

When shouldn’t you use blockchain

Two examples spring to mind of where blockchain perhaps isn’t the go-to solution.

For one thing, while blockchains make great transaction platforms, they’re not the ideal solution for super-fast digital transactions that take place in milliseconds. Blockchains require huge amounts of computing power, so for super-fast transactions, a centralized database is likely to be a faster, cheaper way of processing and storing the information.

And secondly, blockchains are, by their very nature, open chains of information. So anytime confidentiality is a key consideration, a private database is (at least for now) the better option.

In conclusion, if you’re happy with your current database, then there’s no need to switch to blockchain technology anytime soon. After all, blockchain is still evolving and maturing all the time. But the advantages and uses set out in this article show that blockchain technology is definitely worth considering for the future if a decentralized system of record would suit your business.

Who has problem with blockchain

It is obvious that not everyone adores blockchain. Decentralization of .anything makes authorities lose control. Implementing blockchain technology to currency hurts governments the most as one of the main source of government income in most of the countries is diluting money and causing inflation. When a decentralized money is in action the governments will not be able to control the currency.

In conclusion, if you’re happy with your current database, then there’s no need to switch to blockchain technology anytime soon. After all, blockchain is still evolving and maturing all the time. But the advantages and uses set out in this article show that blockchain technology is definitely worth considering for the future if a decentralized system of record would suit your business.

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