Top 10 Advantages of Blockchain Technology
Blockchain technology has been involved since its introduction a few years ago. Humanity first came across blockchain in 2008 after Satoshi Nakamoto published a research paper titled “A peer-to-peer electronic cash system.” Satoshi aimed this technology at enhancing trust in the business world and creating security as well. In other words, we can define blockchain as a technology that reinforces distributed ledger, meant to store data in a way that it cannot be tampered with. Over the years, blockchain technology has made headlines in many countries, making it one of the latest financing technologies. Blockchain follows specific rules meant to improve agreement between multiple parties that don’t know or trust each other for a common good. Blockchain is pushing investors of various sectors, such as healthcare, financial services, manufacturing industries, among others, to embrace it to change the traditional business models that we have today. Business-oriented mindsets that have adopted blockchain are reporting tremendous business results, including enhanced security, high-level efficiency, reduced costs, faster transactions, and many others. This blog aims to explain the top 10 benefits of using blockchain. They include:
Daniel Field, head of Blockchain at UST, taught that blockchain is valuable because there is a single actor required to approve trust among participants. This statement may sound difficult to process, but let me break it down for you. Most of the money that we use today comes from banks. Each country has a central bank that works to regulate the inflow and outflow of money that is circulating within the society. One of the major problems that central banks face is a lack of trust and flexibility. This means that you can go to the bank to withdraw a certain amount of money and the bank cannot deliver. This delay is usually expressed in two ways: you either cannot get your money on time or have a limit on the amount of money you can withdraw per day. A constant repeat of this behavior discourages customers, and this explains why blockchain is so popular. A decentralized system enables trust among people who don’t trust each other simply because they are unknown to each other. This creates an open-source system that is 100% untraceable by third parties, and the government as well. This enables you to perform all your transactions in a way that no one will know the details of your transactions, i.e., name, location, phone number, time, and even where you’ll take that money.
If there is one thing that people value in this world, it is security for their money and property. This is because no one wishes to work hard and store his/her wealth only to make losses in the end. Blockchain technology over the last few years has proven to be much safer than other record-keeping systems. This means that a transaction is only recorded when there is trust and the parties involved have agreed. In centralized systems, for example, the bank does not even consult its customers when keeping these records. And they are the same records that the bank uses to process your future transactions and cause delays. Therefore, such banks can trace you to your house, expose your details, and even be hacked because there is no security system for keeping your details safe. In the blockchain, this recorded information is shared among all other parties involved, instead of sending it to a single computer. This makes it very difficult for hackers to access your details, hence your money can remain secure forever. Again, blockchain technology optimizes security way better by requiring permission to access.
If you have ever gone to the bank to get your credit card, for example, I’m sure you know how much paperwork that one process requires. This manual paperwork handling is time-consuming and increases the risk of human error. Blockchain eliminates all these factors by accelerating transaction speed. Often we hear that “time is money,” and blockchain has defied the odds in proving this statement. An outstanding example of how banks limit the speed of transactions is when people try to transfer money from one bank to another. If this activity lands on a public holiday or during the weekend, there is no way you can conduct the transaction. This is because, in such a scenario, you’ll need a third-party such as a supervisor, to approve your money transfer. Blockchain streamlines transactions with much ease and efficiency. Blockchain usually distributes this documentation to all parties involved at once, and this reduces the time needed to send each copy to each individual. Sharing these documents to everyone eliminates the need for intermediaries, and this explains why it is so easy to move money faster across various places using blockchain.
Every business always looks forward to better ways of reducing its operating costs while maximizing profits. The traditional methods of conducting business today are super costly. This means that businesses end up spending a lot of money in the race of chasing profits, and this shouldn’t always be the case. The idea behind blockchain is to help cut company costs. There are various ways in which blockchain does this. First, it makes it easier to process the transactions. This means that instead of waiting for hours for a transaction to go through, you achieve this in seconds or a few minutes. This enables businesses to run smoothly and continuously with no delay, hence more dividends. Second, blockchain reduces the manual handling of various transaction processes, such as auditing, amending, and reporting. Manual handling translates to additional labor and more business expenditure, which pushes many businesses into more spending. Blockchain also eliminates intermediaries who always stand between businesses and their money by offering direct transactions and, hence, high profitability.
One of the major challenges facing the 21st century is the inability to verify data from various sources. For the last decade, companies have suffered under false documentation provided by their employees. This in return has caused such institutions to lose vast sums of money and even their reputation. Research has shown that up to 43% of people exaggerate their academic qualifications while 11% fake the degree qualification. Thanks to blockchain technology because it is now possible to eliminate this problem. One of the many applications of blockchain in data verification is the academic sector. Innovators have come up with a blockchain tool that enables institutions to directly upload the academic qualifications of their graduates, making it easier for job recruiters to trace them. Instead of relying on exaggerated CVs or resumes, you’ll just get the name of the job applicant and the institution he/she studied in. With the help of blockchain tools, employers can then retrieve this information, making it easier for them to determine who is fit for the job. Blockchain stores information in a decentralized way, so everyone can verify these details using zero-knowledge proof. This proof of the correctness of data with no knowledge enhances transparency.
Immutability of Transactions
Blockchain offers the highest form of immutability with money and transactions. Immutability is the inability of details to be erased once recorded on the blockchain. Today, if you try to make a payment using blockchain technology, all your transactions are usually recorded and time-stamped. Once recorded, there is no way you can go back and delete transaction details. This protects you from companies that work hard to steal from their customers, claiming that no payment was made. The 21st century is full of fraudsters who have swindled companies with millions of cash. This happens when a fraudster claims to have bought a product worth enormous sums of money and the company didn’t deliver. What makes companies fall into these traps is that these fraudsters usually produce fake transaction documents that lawsuits use to fine businesses. Blockchain is of great advantage because for each transaction recorded, no fraudster can access it or change this information. Over time, anyone can track this information to provide secure audit information. Sweden is one country that has embraced blockchain in real estate to help keep track of property even if ownership changes.
Quality assurance is key in any institution because it ensures a continuous inflow of customers. Quality assurance enables companies to manufacture products and services that meet their customer’s expectations. This process may seem easy, but not all companies achieve quality control 100%. This has been attributed to the lack of better tools for trade-in enhancing the quality of products and services. Since introducing blockchain, many companies have reported an increased number of customers and return on investments. Walmart, for instance, is one company that has taken advantage of blockchain in serving its customers. Because Walmart is a big company, it realizes many suppliers from different countries for its products. So, for every product that comes in, Walmart’s blockchain system records its supplier and the state of goods. Because no one can delete blockchain recorded information, Walmart uses this stored data to evaluate its suppliers. If the supplier was found to have low-quality products, the blockchain tools eliminate him/her, and the rest are left to continue supplying. How cool is that?
Blockchain is the technology behind digital currencies, such as Bitcoin, Ethereum, and Cryptocurrency. Its integration into cryptocurrency has created a more secure, open, and cheaper way of sending and receiving money. Blockchain never requires you to keep your money within any bank and this has its benefits. Storing money in any bank is never free and requires you to pay for each transaction you make. For any amount of money you transact, the bank cuts its share from your money. What puts many people at bay is the fact that these cuts are usually very high, costing companies hundreds of dollars when transacting immense sums of money. Blockchain offers a faster transfer of money and assets across the globe. Blockchain imposes no tax on any transaction, and this makes it the best international fund transfer.
Tokenization is another important aspect of blockchain. It’s a process that involves the conversion of an asset into a digital token that is then stored within the blockchain. From here, the owner can then share it easily with other people with no intermediary. These assets can either be physical or digital, and they don’t lose their value at any point. Tokenization is the technology behind digital art, whereby you don’t need to have physical art to make money. The best example of tokenization is NFTs, which are simply digital collectible items or pieces of art. Blockchain makes it easier for everyone to see the owner of the art, even if you sell it to hundreds of people. You can rent this tokenized good too over a certain period using special codes that protect them from fraud and copying. For example, if you draw digital art and decide to make it an NFT, after a while, you’ll make a sale. Even if this art is bought by many people, you still keep the original art and everyone can see that you are the original owner. It makes you the virtual owner of the art and smooths business transactions.
What many people love about blockchain is the fact that traceability of information is 100% guaranteed. We can apply this traceability across various sectors, such as healthcare, education, banking, manufacturing, etc. In healthcare, for example, blockchain can improve patients’ profile privacy. This means that patients do not need to carry their medical documents because blockchain decentralizes this information. Again, this information will be secure in such a way that only patients can grant permission to who can access that information. Again, this data can be used to conduct research and clinical trials aimed at developing better drugs for chronic illnesses such as cancers. To learn more about blockchain, click here:
Blockchain is a revolutionary technology that has impacted the world in various ways. It carries a lot of potential that can be used across various sectors, such as banking and finance, education, innovation, and others, to end the traditional methods of doing things. The blockchain market is projected at $227.99 billion by 2028, with a growth rate of 72.9% per year, since 2021. This clearly shows that blockchain’s future is promising and will favor anyone who will embrace it. Some critics have argued that blockchain has high costs of implementation, and that’s true. However, its benefits supersede the disadvantages and, therefore, it’s worth a shot.