What is Blockchain?
Blockchain is an online database that is used for the storage of records and information for things such as online transactions, digital & physical assets, product inventory and much more.
Blockchain is known for its security. This is because of its, as the name says, ‘block-chain’ system. Each block is chained to the next, and contains a set of data as well as data from the previous block. This makes tampering with any data incredibly difficult as you would not only have to tamper with that block, but each block before it.
You’re probably wondering why it’s become so popular? Here’s why:
- Decentralization – All blockchain users collectively have control rather than a single person or group, making it much fairer and safer.
- Immutability – Because of its way of storing data, altering or tampering with data is incredibly difficult, making the storage of data safe and secure.
- Digital – Having records digitally stored on a cloud based database is much more organised and efficient than a traditional database.
- Efficiency – Blockchain is able to transfer and update information incredibly quick, as it removes any middle man or third party for things such as transactions.
What is Blockchain used for?
In recent years the banking world has started to implement blockchain into their systems, as the technology aims to improve areas in which are most important to the financial industry.
A big reason is security. Banks are susceptible to hackers and fraud, so this is where blockchain steps in. As every transaction is recorded, and the massive layer of security blockchain provides, this makes hacking much more difficult and lowers the likeliness of fraud.
Another advantage is speed. Blockchain enables cross-border payments to process at a much faster rate than traditional banking infrastructure, and lowers conversion fees.
This isn’t limited to transactions and payments though, as it also speeds up the KYC (Know Your Customer) process. This is the process in which banks gather and verify information about the purchaser, such as the identity and address. This is typically done when someone opens an account, and is manually done, which can be slow. Blockchain is able to speed up and automate this process by sharing the information on its database, improving customer experience and increasing efficiency.
A smart contract is a code, or a program, within blockchain that essentially acts as an automated contract. This allows both users to set terms, that when are once met, will be automatically carried out. This eliminates any middle man, putting the code in control of everything and makes the contract tamper proof. As well as this, all smart contracts are recorded and verified on the blockchain, denying any invalid or false claims.
Documents & Information
Like any other database, blockchain can be used to store and transfer information or documents. This is great for industries such as healthcare, as hospitals can use a private key to store patient information and medical records on the blockchain, without the risk of it being tampered with.
Other information, such as product inventory can also be stored on blockchain and is beneficial to industries such as retail. This is because blockchain’s technology is able to efficiently update information, as well as ensure they are getting the right product from the manufacturer, and keep a secure record of any transactions.
Pros & Cons
- Faster transactions
- Lower transaction fees
- Power to the user
- Better traceability
- Increased transparency
- Energy consumption
- High cost for the technology
- The technology hasn’t matured enough
The future for blockchain is bright and is heading in the right direction, and with the technology constantly adapting and improving, we at TechChaps look forward to following its journey and seeing where it goes next. With the technology already being adopted by many industries, and more to follow suit, the future for blockchain is definitely exciting!
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