This article wants to go through the advantages of blockchain technology and blockchain usage in different scopes.
Blockchain technology is a kind of structure that can store transactional records. it is a peer-to-peer decentralized distributed ledger technology that works without involving any third-party intermediary.
Now, let’s check the advantages of this amazing technology.
For the first step, we will go through the top 5 advantages of blockchain technology.
Blockchain is kind of a distributed ledger where all network participants share the same documentation as opposed to individual copies.
If any update is needed in the shared transaction record, everyone in the network must agree on it, we call it consensus.
All nodes can participate in the consensus process.
If all the nodes validate the change in the transaction, each node keeps a copy of the transaction records.
In this way, blockchain technology handles transparency as an important advantage.
When we talk about blockchain security, we can mention the security and privacy of online transactions, and also, we can categorize it into different parts.
Consistency of The Ledger across Institutions, Integrity of transactions, Availability of system and data, prevention of double-spending, Confidentiality of transactions, Anonymity of user’s identity, and Unlinkability of transactions.
Blockchain technology is more secure, compared to other platforms or record-keeping systems.
Transactions must be agreed upon before they are recorded via the consensus method.
Also, each transaction is encrypted and has a proper link to the old transaction using a hashing method.
Transactions can be ensured with principles of cryptography, consensus, and decentralization.
Each new block connects to all the blocks before it in a cryptographic chain and it makes it nearly impossible to manipulate the data.
Most businesses need to spend lots of money to manage their current system. Because of this fact, reducing costs is such a priority for businesses.
When we use blockchain technology, there is no need for third-party intermediaries.
Because here in blockchain technology, we just need to trust the data on the blockchain.
When it comes to the validation process of transactions, there is less interaction needed because everyone in the network will have access to a single, immutable version.
One of the great scopes that we can use blockchain technology is in supply chain management.
In the traditional format of supply chain management, it is hard to trace assets.
But, when we use blockchain technology, we can exchange assets and make sure that there will be no problem because we are going to record everything on the blockchain.
Blockchain technology will improve traceability by showing where an asset came from and every stop it made on its journey.
This advantage can help to verify the authenticity of assets and prevent fraud and loss of assets.
Traditional processes are time-consuming, that often vulnerable to human error and the need for third-party intermediaries.
By using blockchain technology, these processes will be automated and also transactions can be completed faster and more efficiently.
The fact that every transaction is stored in a decentralized ledger makes it clear and easy for any node in the network to trust each other.
This way of data storage in blockchain technology provides a highly efficient process with trust.