What Is Blockchain Technology And Why It Is Important?
Blockchain is also known as a Distributed Ledger Technology (DLT). Blockchain is a list of records, it’s called blocks that all are connected with cryptography. Each of the blocks contains a cryptographic hash of the previous block, transaction data, and timestamp as well.
A blockchain is a collection of time-stamped immutable records that are managed by a group of computers that are not handled by any single entity. Each of the blocks secured by a cryptographic hashing. Blockchain is based on the peer-to-peer topology that allows data to be stored on thousands of servers globally.
Blockchain technology mainly uses for the basic service of trade finance, blockchain works on a digitalized, decentralized, and distributed ledger model. By this nature, it is more secure than proprietary service. Blockchain is an underlying technology of Bitcoin. Many people think both are the same, but both are closely related not the same thing.
Why Blockchain Is Important?
The blockchain is an on-demand technology right now so, the demand for this technology is increasing very fast. Blockchain technology provides one of the safest & secure online transactions. Due to its many advantages, many companies have started to work on blockchain technology. Some of its important points are described below.
1. Good Transparency
One of the best aspects of this technology is its transparency. You can see everything of all the users because blockchain is based on a decentralized network where all user's data are available which makes it very open technology. There is no chance of any disparity because nothing is hidden.
2. Better Security
Blockchain is very secure because security is the primary thing of any kind of online transactional activity. Many fraud activities occur today and data are stolen also in the digital world. Blockchain provides very high security because it is working on the base of the decentralized model there impossible to cheat with the system.
3. Less Expensive
Blockchain is a very less expensive technology available right now in the world. It is also one of the best financial models that are very low at expense especially useful for the banking sector. Today many companies are looking to adopt blockchain technology because it can save lots of cost of the company.
4. Take Less Transaction Time
Blockchain technology takes very little time to complete any transaction and it is very faster than the traditional transaction. We can transfer any documents or money within a minute. There is any problem to wait for hours to complete any transaction in the blockchain. This makes it to the advanced level or very faster technology for online transactions.
5. Fraud Protection
We can easily identify any fraud or fraud activities due to its higher transparency of transactions. There is no hidden information are available so, any businesses or companies are always protected from fraud. This feature makes it very reliable and user-friendly technology for any kind of online transaction and it can always save from fraudsters.
6. No Middleman Required in Transaction
Generally, we do any transactions using middleman or mediators but in blockchain, we don’t need any middleman to complete the transaction. You can do any transaction like insurance claims, digital payments, for the stock exchange, for asset management, or land registry, and many more without any mediators. Without a middleman, you can do a secure transaction that is very important.
7. Huge Saving of Expense
According to research, blockchain technology will be save more than $150 billion by the year 2025. It will help to reduce the cost in operations cost, support function cost, personnel cost, Information Technology cost, and many more. It will also reduce the cost of fraud and counterfeit products and also prevent from fraud activities.
8. Increase in Financial Privacy
Many new cryptocurrencies are coming today like Tron, EOS, Ripple, Cardano, and many more that all are concentrate on financial privacy. That means the information about any economic ownership will be private and secure. No any individual person will be able to access the information of the financial assets of any person.
9. Prevention From Hacking and Data Leaks
There are many incidents are happens today about hacking and personal data leaking and now people hesitate to give their personal information and data to any companies. But blockchain technology provides higher security for users' data and personal information. So, there is no chance of any kind of hacking and data leaking because your information and data are too secure with the blockchain.
10. Improve Efficiency
Blockchain technology has improved the efficiency of all things and it is very important. The reason is middleman removal, better security, transparency, less expensive, and overall better processes. Transactions take very little time rather than hours or weeks to complete, especially it is more useful for international transactions.
Pros and Cons of Blockchain Technology
- Increase efficiency
- Faster processing
- Decentralized system
- No downtime
- User empower
- Size of the blockchain is very large
- Need more resources
- Human errors
- Can’t edit data in a block
- Data is visible to all