You’ve probably heard of Blockchain technology, but do you really know what it is and how it works? Blockchain is a technology that enables the secure exchange of information, it is a technology that has the power to forever change our relationship with the digital world.
In this article you will learn what Blockchain is and what it is for, read on.
What is Blockchain?
Blockchain is one of the major technology stories of the last decade. Blockchain technology is an advanced database mechanism that allows information to be shared transparently within a company’s network.
A blockchain database stores data in blocks that are linked in a chain. The data is chronologically consistent because the chain cannot be deleted or modified without network consensus.
By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new kind of Internet. Originally devised for the digital currency Bitcoin, the technology community is now finding other potential uses.
Blockchain enables the permanent, immutable and transparent recording of data and transactions. This, in turn, makes it possible to exchange anything of value, whether it is a physical item or something less tangible.
What is the Blockchain for?
Blockchain technology has proven to be a disruptive technology that primarily offers never-before-seen levels of security necessary and desired for any type of industry, making it an incredibly versatile technology.
Like any disruptive technology, there are advantages and disadvantages to its application. Let’s take a look at some of them.
Advantages of the Blockchain
Network distribution: This point provides, at the same time, several benefits since, by having this network distributed, in the first instance, no one owns the network, so that different users have multiple copies of the same information at all times.
Also, this characteristic makes it resistant and resilient to any type of failure, since the fact that a node fails does not imply generalized failures in the network.
Descentralización: These use blockchain to automate payments and transfers based on a predetermined set of conditions.
With these, an electricity bill can be paid once consumption reaches a certain amount. The transaction would be sent securely to the power company and verified via blockchain.
Speed and efficiency: Blockchain is fast and efficient, manual data entry is tedious and error prone. Most organizations maintain multiple systems of record for different tasks, which is time-consuming to review separately. With blockchain, all of this information is stored and verified as it is generated.
Verification: Each blockchain uses a consensus mechanism to validate transactions before they are added to the database in the form of blocks. These consensus mechanisms make it virtually impossible for hackers to insert fraudulent information.
New generation of applications: Blockchain is the foundation for a new generation of decentralized finance applications. New applications in finance, entertainment, video games and other fields are emerging from the fertile ground that is blockchain technology.
Disadvantages of the Blockchain
Private keys: Excessive security can also be a great disadvantage, in the particular case of private keys, as has been documented on many occasions, once lost, it becomes almost impossible to recover these keys, causing a problem.
High implementation costs: Just as this technology represents low costs for users, unfortunately it also implies high implementation costs for companies, which delays its adoption and massive implementation.
Shortage of blockchain-ready software engineers: Blockchain technology is new and complex. This means that blockchain-ready software engineers are in short supply. That makes blockchain-based applications expensive to develop and maintain.
Unemployment: Efficient blockchain-based applications could replace workers in some sectors, contributing to unemployment statistics.
Blockchain and its applications are one of the most important technological advances of recent years. And although it is still a very young technology, its growth and applications are making us find new utilities and it is beginning to mature in many environments and services.
The indisputable benefits of blockchain technology make mass adoption practically a certainty. In the long run the advantages of blockchain technology will outweigh the disadvantages with certainty.
If you need help with a software project, please do not hesitate to contact us. We will strive to create the perfect solution for your needs.