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We have all heard about blockchain technology, but do we know what it is? Well, in layman’s language, blockchain is defined as a shared ledger that is used to record transactions, track assets, and build trust. Today, every business, be it on a small or large scale, is adopting blockchain technology to make the processes swift and smooth.
If you wish to know more about blockchain technology or make a career in it, then it is best to apply for a Certified Blockchain Professional Training course. The course will provide you with an in-depth understanding of blockchain concepts. With practical training and hands-on experience, candidates will be able to become successful blockchain developers.
Let us now go straight to what blockchain is!
What is Blockchain Technology?
Blockchain technology is a manually unchangeable ledger that helps in the process of tracking assets in the business and recording transactions. An asset, which will be tracked, can be tangible (car, land, cash, etc.) or intangible (copyrights, branding, patents, etc.). Anything can be tracked and known to a person via a blockchain network. With this technology, the risks are reasonably reduced along with cutting costs.
Why is Blockchain Technology Important?
Do you know why almost every business is adopting blockchain technology? See, businesses run on information. The faster the information is received, the more it is accurate. Blockchain technology is one of the ideal methods because it is completely transparent when it comes to receiving information. It provides immediate and shared information that can be accessed only by reliable members of the organization.
Blockchain technology makes all the processes of the company very easy. The processes include tracking orders, payments, accounts, production, and much more. The members of the organization share a single access point so that they can access all the information and details of end-to-end transactions. This gives them confidence as well as new opportunities to function efficiently in the organization.
Primary Elements of Blockchain Technology
Certain elements in blockchain make it popular among developers and organizations. Have a look at some of the key elements of blockchain technology.
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Distributed Technology
The main members of the company have access to the distributed ledger and records depicting transactions. With the help of this shared ledger, transactions will be recorded only once resulting in the elimination of the duplication of effort.
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Records are Immutable
No participant in the organization can corrupt or tamper with the data transaction taking place. A new transaction is added when a transaction does not record properly. This is how the new and the previous transactions are visible.
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Smart Contacts
In order to make the process of data transaction rapid, a set of rules called the smart contract is stored in the blockchain and automatically executed. A smart contract is used for defining conditions in order to undertake bond transfers.
Blockchain technology includes these three key elements that help organizations undertake the process swiftly. Let us now discuss how blockchain works in the company.
How Does Blockchain Technology work?
Blockchain technology has a step-by-step process of working. Let us look at it in detail!
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Block of Data
The transactions undertaken by the company depend upon the movements of the tangible and intangible assets. The block of data is used for recording the information that might help the organization in keeping records.
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Connection of Blocks
The blocks of data create a chain-like structure and move from one place to another as the ownership changes. These blocks record the sequence of transactions, thereby linking the blocks to prevent them from being corrupted or altered. This sequence also prevents one block from entering between two already existing blocks.
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Creation of a Blockchain
Each block adding up to the chain results in the strengthening of the previous block. This creates a blockchain, wherein the transactions are recorded and are free from tampering. A strengthened blockchain removes the possibility of the alteration of data by a malicious hacker. Thus, blockchain technology is one that you can completely trust.
As a developer, one works with blockchain technology in order to make the company’s recording of data smooth and efficient.
Let us now discuss the benefits of blockchain technology.
Benefits of Blockchain Technology
Blockchain technology is used in various kinds of industries to prevent data from hacking. Blockchain technology is the one behind the success of the organization as it is transparent, has greater security, and reduces costs. Well, that’s not all! Have a look at the benefits of blockchain technology below to understand it deeply.
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Transparency
The history of transactions is becoming transparent because of the use of blockchain technology. Being a distributed ledger, blockchain allows the participants to share the documentation. This shared documentation can only be changed and updated via consensus, i.e., everyone must agree to the alteration done to data. When one record is changed, it leads to the alteration of subsequent records. Therefore, the data on a blockchain is more accurate, transparent, and consistent.
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Greater Security
There are many instances where we have seen that blockchain technology is more secure than others. It is very difficult for malicious hackers to corrupt and compromise data. Every industry wants to protect its data, and this is the reason why blockchain is used everywhere. It gives an opportunity to change confidential data, thereby helping to prevent fraud and unauthorized activity.
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Enhanced Traceability
If any organization deals with the products traded through a supply chain, then it can be hard to trace the item back to its origin. Exchanging the goods via blockchain technology provides an audit trail of the products, wherein the members know where the asset is. This helps in preventing fraud and maintaining the authenticity of assets.
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Improved Speed and Efficiency
Traditional paper-heavy processes are subjected to human error and often require the interference of a third party. By streamlining the process with blockchain technology, transactions can be done at a faster pace. One does not have to reconcile the records again and again. This helps in reducing the clutter, thereby making it easier to trust the technology.
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Cost Reduction
Almost every business strives to reduce costs in some way or the other. With blockchain technology, one will not need third-party members as they increase the costs to a great extent. One can easily rely on blockchain technology for trading and recording transactions so that the middlemen are removed, and the costs are reduced.
Having known about the advantages, let us look at some reasons why blockchain mustn’t be used!
Why Must One not Use Blockchain Technology?
No doubt, there are a lot of benefits of blockchain technology. But along with this, it is also important to look at the disadvantages as well. So, here they are!
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Scalability Issues
There are problems with scalability in blockchain technology. In simpler terms, as the number of members using the technology increases, the chances of slowing down the network is more! There have been many solutions for increasing scalability, but they are still not at par with the centralized systems. For instance, look at the transactional history of Bitcoin and VISA. Bitcoin can do only 4 transactions per second, whereas VISA can do 1700 transactions per second. This is how blockchain technology must scale. Right now, there are scalability issues, but many solutions are being devised that will cover them soon!
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Consuming Energy
Blockchain technology consumes a lot of energy. Every time a transaction is recorded, the miners and developers need to solve certain issues. For instance, if you take up Bitcoin’s blockchain technology, then this issue will persist till it is solved by an algorithm. Thus, blockchain technology requires a lot of energy for undertaking operations.
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Blockchain Cannot be Reversed
Data immutability is one of the reasons why blockchain shouldn’t be used! Blockchain technology can be controlled by a single entity if a person owns more than 50% of the nodes. This makes the technology sensitive and vulnerable. Another problem with the technology is that once written, it cannot be removed or reversed. Also, this hampers privacy as the recorded transactions can be used by other members as well.
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Cost and Implementation Issues
The cost and implementation problems are huge in blockchain technology. The technology requires a lot of investment which increases the costs to a large extent. As a member, you also need to take care of the maintenance cost as well. So, if you are planning to adopt blockchain technology – think again! Before adopting it, it is best to have huge funds to carry out different costs in the company.
So, these are some of the reasons why one must not use blockchain technology. Well, it is essential to note here that the benefits outweigh the disadvantages.
Look at the positive side of the technology and operate how the company yields profits from it.
Conclusion
There are more advantages than disadvantages of blockchain technology. If you are keen to become a blockchain developer, it is best to take up a blockchain developer training course. Candidates having a keen interest in using blockchain must take up the course as they will learn various concepts that will help them in providing an in-depth understanding of the entire Blockchain concept.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.