Most likely you’ve already heard or read the term blockchain somewhere and know there is a huge buzz going around it in the technology domain. The technology that was invented to power Bitcoin in 2008, is now being used for almost everything. However, despite all the news and predictions are made around it by experts, it seems that a lot of people aren’t much aware of what blockchain actually is, what are the key advantages of using it and what are its biggest features? In this post, we’re going to explore all these things about blockchain and why you should learn this technology. Let’s delve deeper.
At its simplest form, blockchain is a distributed, encrypted database which records data. It’s a distributed ledger where a transactional record is incorporated by a block and all the records in the database are connected simultaneously with the hash capacity. Once the users create records, a group of computer verifies them and the couples them up with the preceding record present in the chain. In this decentralized database, transactions are protected by powerful cryptographic algorithms and the network status of a blockchain is maintained by consensus algorithms. This technology promises to change the way we buy and sell things, share information, and verify information’s authenticity. And because of its ability to accomplish all these in efficient, transparent, and secure ways, blockchain is being steadily adopted by almost every domain — from individual and business to government.
You can get a clear understanding of blockchain’s ability from the prediction made by Gartner that by 2025, it’ll lead to $176 billion in added business value. In order to understand the reasons behind this prediction, we need to take a look at the key features of blockchain and the key advantages of using it. But before that, let’s have a quick look at the working process of this technology.
A block refers to a record of a set of new transactions that can mean anything — from medical data to the location of cryptocurrency. Once a block is completed, it gets added to the chain, resulting in a chain of blocks or a blockchain. As the newly-created block appears as a part of the ledger, the next block cryptographically links itself to this block. At this stage, the transaction receives its second confirmation. Then transactions are reconfirmed each time with the creation of a new block.
Though blockchain is generally associated with cryptocurrencies, with Bitcoin in particular, there is much more to it. For a huge number of tech companies, this technology has become an integral part of their business operations. Here’re three key features of blockchain.
The ability to create immutable ledgers is one of the most important features of blockchain. Any database which is centralized stands a huge risk of getting hacked and they have to put trust in third-party in order to keep the database secure. In a blockchain, the ledgers are kept in the never-ending status of forwarding momentum. Here, you can only add data with time-sequential order and it’s almost impossible to modify that data and thus, blockchain is considered practically immutable.
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This is probably the biggest feature of blockchain. Here, the ledger is updated through consensus, which is the biggest power of decentralization. In order to update the ledger, no central authority with controlling ability is needed. Instead, every update made to it is validated against stringent criteria in accordance with the blockchain protocol. And the update is only added to the blockchain once a consensus has been reached among all the participating nodes/peers on the network.
3.3- Increases capacity with greater security
The most remarkable thing about blockchain is that it enhances the capacity of the entire network. The key reason is there are lots of computers working together that in total provide a great power than a limited number of devices with limited capacity. It’s a general consideration that with more operational capacity, there comes more security risks. But with blockchain, this statement doesn’t hold true. Despite the huge capacity, this technology offers greater security because it’s just not possible to shut the system down. While the highest level of systems stand a huge risk of getting hacked, the blockchain network is extremely secured by a significant number of computers (widely known as nodes) that confirm every transaction that takes place on this network.
As we’ve mentioned earlier that while the huge success of Bitcoin gave the world an idea of the power of blockchain technology, it can immensely benefit a lot of other sectors. Let’s have a look at the key advantages offered by this technology.
4.1- Fraud prevention
You may already know that a huge number of frauds revolve around altering, manipulating, deleting financial records etc. With blockchain, it becomes extremely difficult to perform fraudulent activities. Here, every transaction gets recorded at the time it takes place and then it gets encoded to avert anybody from interfering with the records.
4.2- Improved data security
Some data breaches happen because of poor security management. Databases or networks get left unsecured and that results in compromised data security. Often, the old ways of securing networks and data fail to keep pace with advanced hackers. The distributed nature of blockchain together with native encryption makes it extremely tougher to crack. In addition, data security gets bolstered by digital signatures that need several users to authenticate data access.
4.3- Instant transactions
Often the growth of a business gets heavily impacted by time-consuming contractual transactions. This is particularly true for businesses that process a huge amount of communications on a regular basis. With smart contracts offered by blockchain, businesses can automatically validate, sign, and enforce agreements. This eliminates the need for interference by mediators and hence, saves the business time and money.
4.4- Improved transparency
Traditional financial transactions sometimes get enveloped in mystery by financial institutions. While the financial institutions have good reasons for doing this, sometimes a deal may be slowed down by this. When utilizing a blockchain platform, once the payment is issued by a party, the other party can instantly check the transaction record without having to depend on any financial institution.
We’ve already mentioned that blockchain is being heavily utilized by a significant number of major industries. Let’s have a look at the most prominent ones among them.
In the healthcare industry, blockchain plays a crucial role in terms of increasing security, privacy, and interoperability of information. It also eliminates the need for interference of a third-party while avoiding the overhead costs.
5.2- Financial services
In this section, blockchain has already been implemented in different innovative ways. From simplifying and streamlining the processes to eliminating the need for intermediaries or brokers in order to ensure effective management of transactional data and transparency — blockchain helps the industry in almost every aspect.
The retail is one of the biggest industries where blockchain is heavily implemented, from preventing fraudulent transactions to ensuring the authenticity of costly goods to enabling virtual warranties, and many more.
Government sectors are also leveraging the power of blockchain. The proper sharing and linking of data using blockchain enable efficient management of data between departments. It also improves transparency and offers an efficient way to monitor, as well as, audit the transactions.
Blockchain is one of the biggest candidate-short industries that are in high demand. If you want to step into this cutting-edge field, this is probably the best time for you to get certification in blockchain technology. Let’s have a look at the key reasons why you should do it.
6.1- Premium salary
The paucity of blockchain professionals will soon spread across every domain — from marketing and finance to logistics, and many more. The organizational structures, functions, governance structures etc are changing at a fast pace for the majority of the businesses. In this scenario, even a fundamental blockchain certification can increase your pay heavily. There’s a good number of courses on blockchain are being offered by some premium institutions like Magnimind Academy. Instead of throwing money around speculations in different fields, you should go ahead and obtain a blockchain certification right away.
6.2- Huge flexibility
Blockchain is playing a crucial role in terms of helping a lot of industries already. These include banking, healthcare, energy sector, retail, and many more. By observing the trend of adoption of this technology, it can be safely said that this scenario will become even larger over time. So, with a blockchain certification in your hand, you can rest assured of having plenty of premium job opportunities across industries.
As with any major technology, blockchain also comes with some disadvantages. However, the huge potential of this technology can easily make businesses to overlook them. It may still have a long road ahead toward mainstream adoption, but a huge number of industries are gearing up to accomplish this. Over the next few years, we can expect to see a lot of organizations experimenting with new blockchain applications in order to make the most out of it.