Understanding blockchain: all you need to know about this revolutionary technology
21:31 19 September 2022
Blockchain technology is primarily associated with the top cryptocurrency, Bitcoin. However, its reach is more extensive, as blockchain influences crucial industries such as healthcare.
Undoubtedly, Bitcoin contributed significantly to blockchain’s success, and nowadays, this type of technology can transform businesses in any industry. Keep reading to learn more about how blockchain works and what are its uses.
What is blockchain technology?
Blockchain, also known as DLT (distributed ledger technology), uses a decentralized network to make the history of digital assets transparent and unalterable. It is a recent technology that is changing the current business world, as well as numerous transactions worldwide.
To understand how blockchain technology operates, we can make an analogy with Google Docs. When creating a Google document and sharing it with several people, you distribute it rather than copying or transferring it. That way, you get a decentralized distribution chain that lets everyone access the document at once. Any modifications to the document are entirely transparent, as they are recorded in real-time.
It’s worth mentioning that on the blockchain, you can’t modify the original data and content once you’ve written it. This differs from Google Docs, which doesn’t provide an inherent security measure. Blockchain is far more complicated than a Google document, but this analogy is relevant because it illustrates the essential ideas regarding this technology.
What makes blockchain technology so valuable?
Blockchain is a promising technology because it reduces security risks, eliminates fraud, and brings transparency. To better understand its value, it’s essential to make clear that blockchain is not a cryptocurrency. This is a common misconception; however, blockchain is the technology that enables cryptocurrency transactions. To be a successful investor, it’s essential to learn the basics first, such as how to buy cryptocurrency. And since blockchain is a vital part of crypto that maintains a decentralized and secure record of transactions, it’s paramount to be informed on this technology.
Blockchain is the bedrock for cryptos, allowing them to operate without needing a central authority. This is a significant benefit, as it eliminates processing and transaction fees. Plus, it gives a more stable currency to those in countries where financial infrastructures and currencies are unstable. This is just one benefit of blockchain, but its uses don’t only apply to currencies. Here are other forms of blockchain implementation.
One of the top industries that benefit significantly from using blockchain in business operations is banking. Financial institutions generally operate five days a week, and you can only deposit a check during business hours. However, blockchain eliminates the lengthy process.
Implementing blockchains into the banking system allows consumers to have transactions processed in a short time. Plus, this is possible during any time of the week or day and even during holidays. With blockchain, banks can also exchange funds more securely and rapidly. For instance, the settlement and clearing process in the stock trading business can be completed within three days, and during that period, the shares and money are frozen.
Healthcare providers can use blockchain to store patients’ medical records securely. They can write the medical records into the blockchain, which serves as proof for patients, making them confident that their documents won’t be changed.
Blockchain makes it possible to encode and store these health records with a private key, making them accessible only to specific individuals and thus, ensuring privacy.
A smart contract plays a role in facilitating, verifying, or negotiating a contract agreement. It is a computer code built into the blockchain that operates under different conditions agreed by users. Once the conditions are met, the contract agreement terms are soon carried out.
Smart contracts help eliminate the processes and fees required if there’s a need for a third-party mediator, a notary or an attorney.
Recording property rights is inefficient and burdensome at the same time. Today, it’s necessary to deliver a physical deed to a government employee at the recording office so that it can enter the public index and the county’s central database. And if there’s a property dispute, you must reconcile claims to the property with the public index.
This is a time-consuming and costly process, which is also prone to human error. Each inaccuracy that occurs only makes tracking property ownership inefficient. However, with blockchain, it’s no longer necessary to scan documents and track down physical files in the recorder’s office. By storing and verifying property ownership on the blockchain, owners can be confident that the deed is permanently recorded and accurate.
Blockchain technology can make your business successful
Blockchain technology is so diverse that many business industries apply it nowadays. Some of these include e-commerce, logistics, transport, mining, and banking. But this list is endless. Blockchain has the potential to make your business more successful, offering multiple advantages. First, it boosts your venture’s transparency, a critical issue nowadays that revolves around industry practices and business ethics. However, in any company, transparency is essential to foster both employee and client trust and also a good reputation.
Secondly, blockchain technology improves your system’s security. Supposing hackers attack your system, they won’t be able to make changes to transactions. This is possible because of the advanced security measures that blockchain provides. Moreover, this technology offers relevant traceability, which is crucial for ventures. Many errors can be made in the supply chain between suppliers and vendors. They involve theft, counterfeit items, loss of goods, and loss of profit. However, blockchain eliminates such errors, making your supply chain easy to track and fully transparent. This technology enables you to enter, as well as trace and track the goods to make sure they aren’t replaced or misused during the process. From an industrial perspective, blockchain provides unique speed and efficiency because it can automate time-consuming processes and boost your business output. Blockchain’s digital ledger allows you to store everything in only one place. This helps streamline your automation processes, making it easier to access your data.
Blockchain is a trustless and reliable system that can save your business money because it eliminates the need for a third party. What’s more, it allows you to diversify your payment options. Customers want options these days, and embracing their needs is essential. And what better way to do this than adopting blockchain? There are many benefits of implementing this technology, and by doing so, you can take your business to a new level.