Blockchain: Pros and Cons. What industries can get benefits? How exactly?
What is Blockchain?
Before discussing the pros and cons of blockchain we should first discuss what is blockchain. Top 5 Emerging Technologies to watch in 2021.
Blockchain is also known as distributed ledger technology is a type of database launched in 2008 by a group of people using the name Satoshi Nakamoto for using it as a public transaction ledger of the cryptocurrency bitcoin. It is based on peer to peer network which allows it to be globally functional without any third party element between the server and the client.
It’s just like a database and stores the data in blocks which are then chained in a global network of the chain known as a blockchain. As everything has its merits and demerits and blockchain even emerging as a digital asset has its cons as well as pros as well.
First we will discuss the pros of blockchain.
Pros of Blockchain:
No Third Party
Blockchain uses a distributed system meaning that there is no need of third party to include between a customer and retailer like credit cards or another kind of organization which acts as a middle man to keep your currency secure and safe from fraud.
For example, when you use a credit card to buy something some amount of fee is also deducted by credit card for their services. But with blockchain user just need to connect with the peer which will be a retailer in this example and just do the transaction without wasting any extra money.
Even when you are using highly trusted companies. You do not know their policies and how much they actually deduct from your account or even do some kind of fraud without you knowing. But with the use of blockchain, there is no danger of fraud. Because all the contracts and accounts are chained in a highly complex chained data. Which cannot be tampered without changing all the blocks included in the chain. Blockchain security: What keeps your transaction data safe?
One of the best pros of this technology is that it is transparent. For example, one application of blockchain with which you are highly familiar is bitcoin. It is highly transparent meaning that all the transaction of bitcoin are public and can be tracked and stored in the bitcoin network. Any person who has a wallet of bitcoin can see the balance of any user with his address. So he can verify his account and transaction details.
Cons of Blockchain:
One of the current cons of blockchain is that it is newly developed and is mostly know to people who are more prone to technology and common d people do not know how the use of blockchain. So it will take more time for its application to spread among masses.
Blockchain users get their private key which is act as password for their accounts which are provided to them via public key cryptography. Each blockchain address has a private key meaning if you lose that key you will lose the data and there are no means to access that data.
This terminology is used when an entity gets hold of 50% of the network hashing power. With this, they can alter or disrupt the network intentionally using the ordering of transactions. As this is a theoretical possibility so no such attack has been made as such up till now. And chances will drop even further with the growth of the network. But if someone appears to have the finance to buy half of the transaction such an attack can be made.
Organizations benefitting from blockchain:
One of the best features of blockchain is its transparency to others. So the government can benefit from it by using it in its transactions as well as all other documentation. Which can be also be easily seen by the public resulting in transparency to corruption which is one of the biggest sources of anxiety for any government.
All the individual developers or smaller companies have to use some third party like fiver to get to buyers for security reasons. But with the introduction of blockchain, there is no need for such third party elements. The transaction can be made between sellers and buyers directly and securely.
Using blockchain eliminates the danger of tampering the contracts as well as estate documents. Then there will be no need to secure these contracts and also exchange of a large sum of money can be done in a small amount of time without delay and inconveniences. Individual people can do business in real estate without feeling the danger of land mafia capturing their land through false documents.
There is not enough transparency in charity organizations. Because of which whether our charity reaches the concerned individuals is still a question but with the use of blockchain. The donor can track the usage of his donations which increase the accountability and root out corruption. Moreover, no extra cost on the management side of Charity Company. So all of the donor’s contribution can go to charity.
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