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The technology for storing databases have evolved over the years. We have gone from storing non-transferrable offline data to being able to store, access and manage data from anywhere at any time of the day in real-time. The current conventional methods of storing and processing digital information has advanced drastically over time to harbor a plethora of desirable features. Yet, they are slow, unreliable and non-transparent.
Satoshi Nakamoto, a pseudonym came up with a revolutionary solution to the problems our data storage and processing technologies pose.
Blockchain technology is a decentralized records system that is most popular for conducting cryptocurrency transactions. Popularly known as a “digital ledger”, it can also store large databases of any data type. Unlike the traditional client-server model, the new technology functions peer-to-peer. By providing strong security, reliability and efficiency features, it is increasingly esconcing itself in today’s businesses. It has led to a surge in blockchain technology development companies.
The core features that blockchain technology is popularly known for are
The remarkable facets of blockchain aim to prevent a hoard of information exchange mishaps from taking place. It also improves various aspects of the complex processes involved in conducting transactions. Such characteristics of the new technology has made businesses seek blockchain technology development.
1. Decentralization
Being decentralized, the functions of blockchain do not solely rely on a single party. Contrary to how regular fiat currency transactions take place - wherein the payment passes through a gateway to the receiver, blockchain technology conducts transactions directly from the sender to the receiver.
There is no monopoly over the list of records. Each block or node of the blockchain is connected with each other via individual computers. It eliminates the need for a third party member, or as compared, a payment gateway. A cryptographic hash of the previous block on each node keeps data securely stored. The absence of an intermediary in facilitating transactions results in the nullification of any transaction fee.
2. Immutability
Blockchain’s second most acclaimed feature is its immutability. Once any data is stored in the nodes of a blockchain, it cannot be tampered with. Users can access the nodes to edit certain aspects of transactions, with the help of a private key. Even then, the blockchain creates a copy for any edits made, retaining the original transaction file. The transaction information that nodes contain includes the date of the transaction and its amount.
The immutable feature prevents various fraudulent activities that data is usually vulnerable to, both from within the business and from external sources. Common manipulative cases such as embezzlement and forging fake accounts on financial books can be eliminated with the use of blockchain technology. This is an imperative feature that enterprise blockchain solutions provide.
3. Transparency
The transactions or data stored in blockchain can be viewed by multiple parties who have the address to the information they want to view from any geographic location. Otherwise, the databases, being cryptographically represented, are displayed as codes such as “1FU1eskFLkBzoz9vpKYEmvTT6LbyCV7PZE”. As the nodes display information in the form of encrypted codes, the identities of people are masked.
Blockchain technology has the answers to curb the usage of paper in the paper-intensive trade industry by being a “digital ledger” that can be shared with anyone in the world.
4. Advanced Automation
Smart contracts are the most sought after checking feature that blockchain technology provides. Blockchain can verify and authenticate transaction contracts automatically. Therefore it provides advantages such as
Curb in Expenditure - Automated verification processes diminishes operation costs.
Validation of Identities - Instant validation of identities to allow transactions to occur.
Cutting Down on Fraud - The transactions that happen in the blockchain are trackable and not reversible.
Smart contracts, a must-have feature through blockchain technology development, make Knowing Your Client (KYC) processes seamless and quick.
5. Cryptocurrency
Cryptocurrency is an increasingly popular form of currency that harnesses the core features that blockchain technology provides. That includes all of the above - transparency, immutability and transparency.
How Does Blockchain Work?
When a transaction or a file transfer has to be made, the request is broadcasted to a peer to peer network, which are a bunch of individual computers. The group of computers together validate the transaction and the requester’s status using complex algorithms. If it checks out, the information is added as a new block to the “digital ledger” and so the blockchain grows.
The Impact of Blockchain in Businesses
The desirable properties that blockchain possess can be of great benefit to various industries. As the new technology flaunts advanced security, reliability and efficiency measures that strongly circumvent any possibility of security breaches, it is rapidly becoming the preferred technology to store data and conduct transactions. Industries that have begun harnessing the capabilities of blockchain technology are
- Banking & Finance Industry
- Medical Industry
- Recruitment Industry and more.
Get started on developing your very own blockchain and experience enhanced accessibility, anonymity, fairness and security. At Blockchain App Factory, an enterprise blockchain technology solutions and services provider, you can avail industry-standard solutions that can scale your business to new heights.
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