The blockchain is an integration of two words- block and chain. Each block in the chain consists of a number of transactions. As a whole, blockchain is a system of recording information that is impossible to edit, manipulate or hack. The popular bitcoin was designed using the concept of blockchain.
In the past, people had trust issues with digital currencies, but digital currencies are gaining popularity as a single owner does not own them with these advanced technologies. It is owned by people who use it! According to statistics, the number of blockchain users will rise to over 42 million in the upcoming years!
How does blockchain technology work?
When someone requests a transaction, the request is sent to a network of interdependent blocks, commonly known as the nodes. The nodes verify the transaction request and the user’s status using advanced algorithms. The verified transaction generally involves contracts, trading information, or even cryptocurrency. After verification, this single transaction is then combined with other transactions to create a block. Once the block is created, it is combined with existing blocks, thus forming the blockchain. This chain is permanent and tamper-proof.
Benefits of blockchain development
Let us understand the top 7 benefits of getting a blockchain development solution developed from a developer.
The blockchain is considered highly secure. They are almost impossible to hack because each block containing a transaction is strongly connected to other blocks before and after it. This forms a rigid chain that is impossible to break. If a hacker tries to hack a single block, he might need to hack the blocks neighbouring to it as well. This way, the chain continues, and there is no end. This blockchain technology is the backbone of all the cryptocurrencies and the transactions that are happening worldwide!
By using blockchain technology, your business has access to unlimited cloud storage. The cloud is swift to use and affordable. Usually, in order to use a cloud space, one must connect their data to a central server. But with blockchain, the need for a centralised server is wholly eliminated. The users can easily store the data and digital assets.
What makes it even better is that all the data is encrypted before storage. This makes the entire process secure and almost impossible to manipulate/ corrupt. The blockchain farmer is the one who rents space on the hard drive, and the renters can pay to use the hard drive space to share their data with the world.
Blockchain’s significant advantage is security and privacy. The technology is also popular among several businesses for its transparency. It has the most excellent transparency regarding business operations and transactions. Since the entire process of lodging contracts to financial transfers and accounts happens in a single central space, the process is easy to track and manage.
Every person has an in-built fear while signing a contract because it’s easy to manipulate, and people don’t know when it will turn against them. It is even more challenging to trust a digital contract because the contracts can be easily edited and manipulated against a person.
However, in a blockchain, there is something called a smart contract which is basically a computer program that is designed to verify and execute the contract digitally. Once the computer reads the original contract, it stores it and provides a facility only to view it. The original version will remain tamper-proof, thus making it safer to use. The popular blockchain technology that enables smart contracts is Ethereum and Hyperledger.
Blockchain’s default security practice is data encryption. Data encryption is a security method wherein the information to be transmitted is encoded and passed. The receiver can access the data only with the correct encryption key. Blockchain also has record-keeping systems that account for every money transfer.
The system must approve the transaction, and then only transactions can occur. Before approval, the system verifies both the parties and their authenticity before verifying the contract they have latched. After ensuring the security of both parties, the transaction is approved and secured.
This property makes blockchain very useful in industries like banking, finance, healthcare, and other government agencies in which security is critical to prevent unauthorised entry and stealing of data.
Better speed and efficiency
With digitalisation, speed and efficiency are prone to improve. But how is it advantageous i=with blockchain? The record-keeping in the blockchain is performed by a single digital ledger that shares the data with every other user. Everyone has access to the same information, and hence the entire process is made transparent, and people will be able to trust each other easily.
Compared to the conventional trading method, blockchain is better as it omits the time-consuming process and errors due to human negligence. If you are trading through the traditional method, you need assurance from a third party that the other person is trustworthy. Thus both speed and efficiency are improved to a great extent.
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