What is Blockchain good for? If you’re technology-savvy and you like to read things related to digital transformation, you’ll for sure have seen or heard tremendous hype about Blockchain. Putting aside the hype and sorting out some teething problems in the technology, you can expect that blockchain technology will stand a chance of revolutionizing most industries, just like the same way the internet and even big data have done.
In this post, we look into the practical advantages that blockchain technology may bring to businesses and put a case as to why you may, shortly, consider a blockchain instead of a normal database.
What precisely is Blockchain?
Before we can move on, let’s find out what Blockchain means and how it works. Essentially, a blockchain is a file of a computer for data storage. Or, to be more technical and precise, it is an openly shared database. The data is shared, i.e., duplicated across various computers, and the entire Blockchain is fully decentralized. As such, no individual or entity, like a corporation or a government, has control over this technology; this is the opposite of the well-known central databases that are often administered and controlled by entities and businesses.
So, how does Blockchain work? In simple terms, the file is constituted of data blocks, where every block is connected with the preceding block, which forms a chain as a result. That is where the name “blockchain” was created. Again, the data itself, every block also has a record of the day when the data was created or even edited, which in the long run makes it crucial for ensuring that the up-to-date record is maintained in the system and can never be corrupted whatsoever.
Since the entire Blockchain is copied across various computers, all users can see the whole Blockchain. Records of transactions are processed not necessarily through a single administrator but rather through a network of different users who approve the data and gain a consensus. If that rings a bell in your mind, it’s since bitcoin works in the same way. As a fact, Bitcoin is the top and actual example of Blockchain.
Benefits of Blockchain
Let’s now turn our heads to some key benefits of Blockchain.
-You’ll receive a history of your undertakings, not just a snapshot in time
As compared to the normal database that gives you a snapshot of data that is up to date in a certain period, Blockchain works similarly; however, the Blockchain offers you information of any past transaction in detail and in an accurate way. In other words, we say, data is attached with history. You can always study your past transactions to decide your future endeavors.
-There is no one central place of attack
As we’ve mentioned before, Blockchain is a decentralized way of storing data and information; in that regard, chances of data loss are stopped, and data being corrupted or hacked is removed. Security is top-notch when it comes to Blockchain. You can always access your data without having a fear of losing data to third parties or encountering any other theft-related issue. Unlike a centralized database, blockchain doesn’t offer any single-entry point for hackers to incept or corrupt data. This option may be beneficial for keeping transactions securely.
-No centralized control
Since the Blockchain is decentralized and shared in various platforms, it doesn’t need any point of administration and all the infrastructure and costs that are accompanied. Again, you’ll not need signatories or permission to conduct a business in such a decentralized form of business.
When are you going to use Blockchain?
Blockchain is, of course, exciting and can change the way we do business operations. However, that doesn’t imply that it is the solution to all business problems. Below are some ways you might opt for Blockchain over platforms like a standard database:
-When you need to secure and manage digital relationships or keep a decentralized, distributed system of record
When you need to keep a long, open record of assets, for instance, to store land or property rights, Blockchain might be the ultimate solution. Smart contracts, in specific, are best for aiding digital transactions and relationships. With it, automated payments can be dispersed when the parties involved in the transaction agree that all their conditions have been met.
-Anytime the gatekeeper or a middleman is time-consuming or expensive
For instance, many accommodation providers now have to talk with guests through a centralized aggregator system, such as Expedia or Airbnb, who in turn, takes over the booking process. Blockchain might change all that for good. For instance, travel companies like TUI are very convinced of the potential of Blockchain; it is developing an easy way where hoteliers can connect with customers directly, to enable them to transact through Blockchain in a consistent, safe, and easy way, as opposed to using a central booking platform.
-When you need to keep track of secure transactions, particularly between many partners
Of course, a traditional database can be good for keeping simple transactions between two entities; however, when things get out of hand, Blockchain can be the best solution for reducing bottlenecks and quickening relationships. Also, the extra security of decentralized platforms enables Blockchain to be the best for transitions overall.
-When the data is inconsistent flux, yet you want to keep a record of the action done in the past
Blockchain is a safer and better method of recording activity and keeping data fresh while keeping a record of its activity. The data can never be corrupted by anyone or deleted accidentally, and you gain from both immediate up to speed data record and a historical data trail.
What is Blockchain good for? In a nutshell, if you’re satisfied with your current database, there is no need to switch to blockchain technology. After all, Blockchain is still a work in process and undergoing some development. However, the benefits shown above have demonstrated that Blockchain is worth considering for now and future purposes to record data and store it securely. Blockchain is becoming big and better!