Speaking of blockchain, you must be familiar with this term if you have been into banking, investment, or cryptocurrency over the past decade. It is the record-keeping technology behind the Bitcoin network. The basic idea behind the blockchain is, as the name suggests, its a chain of blocks wherein the Blocks store information about transactions like the date, time, and dollar of your most recent purchases.
Various applications of Blockchain →
With blockchain, real-time transactions became easier, even for cross border payments, which earlier took approximately five days.
A few examples of real-life uses of Blockchain include:-
- Payment processing and money transfer
- Monitoring supply chains
- Digital IDs
- Data sharing
- Copyright and Royalty protection
- Immutable data backup and many more.
After an overview of blockchain and it’s uses, we would now switch over to the positive and negative sides to see whether it is a boon or a bane as a technology.
Boon or Bane?
Blockchains are mostly designed in the form of decentralized databases that work like a distributed digital ledger. These digital ledgers track and pool the data in the chronologically organized blocks, linked through cryptographic proofs. Blockchain came with various advantages in numerous industries, providing high security in a trustless environment. Yet the decentralized nature of the blockchain brings along various disadvantages too. Let us have an overview of the two sides of blockchain technology.
Talking about the positive side first:-
- It is a distributed ledger technology -
The distribution of data over thousands of nodes makes it highly resistant to technical failure as well as malware.The database is cloned and stored on each network node which leaves no single point of glitch.
- Difficult modifications -
Once stored in the blockchain, the data is highly difficult to change or remove, making it the best technology to store financial records or any other that requires an audit trail.
- Transactions verified through ‘mining’ -
Unlike the traditional payment system which is dependent on the two parties as well as the intermediary, the blockchain technology verifies the transaction through mining. This indicates that the transactions are verified through a distributed network of nodes.
Switching over to the contrary:-
- A few potential attacks -
The bitcoin blockchain is protected by Proof of consensus algorithm which has proved to be really efficient over the years. But not to forget the other face, there are theoretical chances of a few attacks. Amongst these 51% attacks are most discussed.
Yet not forgetting the term “theoretical possibility”, the security of data on the blockchain is directly proportional to its size.
- Difficult to modify data -
Difficulty to modify stored data counts another downside of the blockchain technology. It is so because changing the data or the code is often in demand and requires you to drop a particular chain and take up another one.
- Importance of private keys -
The public-key cryptography in blockchain provides ownership of the data to its users. Each blockchain address has a private key that needs to be kept secret while the address can be shared. The users need these private keys to access their funds which will be lost too if the key is lost, and there’s nothing that can be done about it.
- High storage requirements -
The blockchain ledgers tend to grow extremely large over time, and at present require 200 GB of storage. This surpassing growth creates a risk of losing nodes if the ledger becomes too large for the users to download and store.
Having known both sides of the blockchain technology we can draw a conclusion that it does have some unique advantages despite the downsides. Yet having a brighter vision of blockchain technology in upcoming years, W3villa offers blockchain consultation services.
Here are the key benefits of W3villa’s Blockchain Consulting service that you can enjoy:
- Advice regarding the programming of scalable and distributed applications and several other custom-built protocols.
- Help your company develop a network allowing several devices to interconnect and prevent threats of spoofing.
- Our expert Blockchain consultants help you understand the crypto industry in an efficient manner, specifically the areas for your company to perform well.
- Our consultation services help you predict the forthcomings to help you invest accordingly.
Talking about the present time, blockchain has numerous diversified utilizations. Despite its famous connection with the cryptocurrency world, various other use cases of blockchain technology are already discovered. The fact being the emergence of new applications of blockchain every day, it’s necessary to understand blockchain and it’s uses that can remold the business and investment world.
Definitely the most famous connection for blockchain is with cryptocurrency. Each blockchain platform offers different services, like MintMe Coin, that offers a fully functional, smart contracts enabled blockchain platform.