In the last few weeks we have seen the technical components of blockchain:
Moving on from the technology, we are going to continue with exploring all the benefits of blockchain.
Let’s see in a few sections the biggest benefits of blockchain can bring us:
IMPROVED CONNECTION AND TRACKING
With the distributed ledger technology blockchain can simply and efficiently track all of the transactions on the network. It can means that for example products or transactions can be easily traced along their journey, increasing trust and transparency along the way. Companies from distinct parts of the globe can connect, check each other information and have perfect trust in each other to cooperate.
SECURE AND PRIVATE
As each transaction is connected to be the previous block the blockchain cannot be edited, corrections are only made via making new transactions. Permissions prevent unauthorized access, while consensus makes sure that just safe data is approved. The encryption techniques used in blockchain hide information securely. The data and the blockchain itself is not stored on a single computer, but on a distributed system of computers, which makes it harder to hack. Data partitioning techniques make only that data visible to selected parties as defined by the owner. It doesn’t mean, that a blockchain cannot be hacked- it only means that the technology provides better security than our current systems.
Transactions on the blockchain are visible by every entity, and all transaction are in one place. It means that there are no errors with individual accounts and reconciliations. The consensus mechanism ensures that everyone agrees with the transactions present as well. Transactions cannot be deleted, changed, or lost, so the ledger remains entirely complete and secure. Blockchain ensures that transactions are visible, trusted, and accurate.
Blockchain technology can streamline complicated transactions between multiple parties. With the reduction of individual ledgers and paper-heavy processes, blockchain increases efficiency within the company. As each party on the blockchain has and sees the same information trust is elevated between parties. While the technology is still developing, more and more blockchains are achieving more important transaction speed in streamlined processes. For example, an international bank transfer, which would take a couple an of days through several third parties and big cost can be done on a blockchain with much higher efficiency in a matter of seconds.
Blockchain technology reduces cost with three major elements. Firstly, the blockchain reduces cost by eliminating the need for costly third parties. Secondly, with elevated trust between international parties blockchain allows new business opportunities, and can increase competition with less cost. Lastly, by reducing paper-heavy processes and collecting data on one single ledger the cost of administration can become less.
Blockchain brings a new horizon of a decentralized power structure, where members of the network transact directly with each other without the restrictions, rules, and costs of a third party. Decentralization is the biggest benefit, which has the potential to change the structure of businesses today, while now it also poses plenty of questions and concerns.
Blockchain technology is only in its baby shoes. We can expect the technology to rapidly develop, and open up the possibility to way more benefits in the form of new business models.
Stay tuned for next week to find out the main functions of blockchain, and which areas will it change! Don’t forget to share Flash Learn, and give love on our social media pages!