This post will show you the benefits of blockchain technology in any industry.
Overview of Blockchain Technology
A blockchain can be best understood as a digital ledger of transactions that is supported by a network of computers. The information stored on the blockchain is generally listed under a growing list of blocks that record the data of all transactions and are linked together in a chain using cryptography.
Each transaction recorded on a blockchain is independently verified by peer-to-peer computer networks, time-stamped, and added to the chain. Once the data or transaction is recorded, there is no way to alter the data.
The very nature of blockchain technology makes it very difficult for malicious actors to hack into it and access/ modify/ delete data stored on the blockchain. The technology also offers a convenient way for users to connect with each other without the need for any third-party intermediary such as a government, or a bank.
The use of Blockchain technology has been popularized by the growing popularity of cryptocurrencies such as bitcoin, ethereum, dogecoin, and more. However, the nature of blockchain technology makes it highly suitable for industries that deal with highly sensitive information that must be protected at all costs.
Banks and financial institutions have started to use blockchain extensively and the technology also has use cases in law, real estate, healthcare, and other industries that operate on the basis of the recording and authorizing a series of transactions. To understand the applications of Blockchain technology for your local business, please contact Managed IT Services Houston.
Top 5 Benefits Of Blockchain Technology For Business
1. Improved Trust
Going even beyond the safety of the data stored on the chain that’s guaranteed by Blockchain technology, one of his principal benefits include the transparency and trust it can create between users. Currently, there are almost no other technologies that can generate this level of trust. Due to the level of transparency guaranteed by Blockchain transactions, people connected on Blockchain networks are much more willing to engage in transactions, business dealings and data sharing.
Whether you’re sharing data or making payments, blockchain has the ability to facilitate transactions among people who have little reason to trust each other otherwise. The value of this benefit has become evident in early blockchain use cases including cryptocurrency transactions between parties that are completely unknown to each other or at least, do not have any direct relationships.
Blockchain users also like the fact that there are no regulatory authorities like the government or the Federal Reserve involved in controlling the technology or its use cases such as cryptocurrencies. No one government or regulatory authority can suddenly decide to shut down the Blockchain or decide on its functioning unilaterally.
The lack of intermediaries also reduces the cost associated with Blockchain transactions as there are no fees involved with third-party transactions. There is also the added benefit that blockchain is open for business 24*7*365 unlike banks or other financial institutions.
2. Better security and privacy
As already mentioned before, one of the primary reasons users are so excited about Blockchain technology is because of the degree of security and privacy it offers. There are many benefits to creating transaction records that effectively cannot be altered, and are secured with end-to-end encryption. This effectively mitigates all scope of fraudulent transactions and unauthorized activities.
Since the structure of the blockchain is essentially decentralized, the data is actually spread across a network of systems/ computers and not stored in a central location or server that can be compromised easily – as in the case of many other prominent technologies today.
Since the data stored on Blockchain transactions are effectively anonymized, blockchain also facilitates better privacy for users. The system also offers in-built information and access management since it requires users to have the right permissions in place in order to have access to the data and prevent any unauthorized access. To know more, please refer to IT Support Houston.
Another key benefit of the Blockchain technology is that it operates on a completely decentralized structure. This means that there is no central actor or controlling authority to unilaterally make decisions about the technology or inspire trust in it. This is the democratic potential of the technology that excites many users.
This essentially enables a fair medium of exchange for both payments and data between unknown entities since neither can control the technology fully. With no single person or entity in charge of the silicate in the transaction, blockchain enables an ecosystem of businesses to use the technology fairly and responsibly with a high degree of transparency.
As businesses increasingly adopt blockchain technology, there could be use cases where supply chain management becomes highly transparent and convenient due to the easy and fair exchange of information.
4. Visibility and traceability
Critical among Blockchain’s ability to improve transparency in transactions is its ability to empower users with tracing all transactions to their sources. This can lead to significant benefits in use cases such as logistics, pharmaceuticals, farming and retail inventory management. IT Consulting Houston suggest that the use of Blockchain can make it easy for companies and authorities to verify the origin of products and to confirm if the products are counterfeit or original.
5. Improved cost-efficiency
Thanks to the significantly improved efficiency in processing transactions, Blockchain Technology can also bring down Business and operational costs for companies. Apart from the significant reduction in manual processing of transactions, and significantly reduced scope of error, blocking makes it easy to gather and amend high volumes of data as required and creates transparency in critical reporting and auditing processes.
This is especially evident when looking at how financial institutions leverage Blockchain. The technology enables finance companies to effortlessly streamline all clearing and settlement processes that lead to significant cost savings. Since the technology also removes the need for intermediaries in transactions, such as vendors and service providers, it also removes all associated processing costs.
Note: This is a guest post by Scott Young.