Blockchain is popularly known as the underlying technology behind Bitcoin and other cryptocurrencies. The concept of blockchain technology was first discussed way back in 1982 by Cryptographer David Chaum and then the concept was further refined by Stuart Haber and W. Scott Stornetta in 1991.
The first decentralized blockchain only came up with the emergence of Bitcoin as the first cryptocurrency in the world in 2008. It is important to note that blockchain is much more than just Bitcoin or cryptocurrency. It has far-reaching potential in various industries like healthcare, logistics, etc.
Here is all you need to know about blockchain technology:
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What is blockchain?
Blockchain is a decentralized technology platform on which the information is stored as nodes across a network of systems spread across the world. The key difference between a typical database and a blockchain database is in the way the data is structured. While the data is structured in a usual database in the form of tables, in the case of blockchain, the data is structured in blocks that are linked together in chains.
How does blockchain work?
The objective behind blockchain technology is to allow for the recording and distribution of digital records. However, the technology does not allow anyone in the network to edit the records. It is based on distributed ledger technology (DLT) and has been able to find use cases in many fields which require record-keeping of important information and documents like logistics, healthcare, banking, financial services, etc.
Blockchain stores data in blocks and as soon as one block is filled it is linked with the other filled blocks using cryptography. As a result, blockchain is made of two words – block and chain. The unique advantage of blockchain technology is that the data is stored across a network of systems which can be verified by any system in the network.
It is due to the strong technology base that it is almost impossible to recreate, edit or duplicate the information stored on the blockchain platform.
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What is the use of blockchain technology?
Blockchain has proved its effectiveness with the launch of Bitcoin. The cryptocurrency has been adopted by a large number of investors across the globe due to its strong technological base. As a result, blockchain has found strong use cases in many industries. The use of blockchain in the banking and financial services sector is a no-brainer. Here are some key industries in which blockchain technology can be adopted:
Banking and financial services: Banking and financial services can take the most benefit from blockchain technology. Blockchain can not only bring efficiency to banking and financial services systems across the world, but it also has the potential to disrupt the status quo in the global industry and set new rules of operation.
Healthcare: Blockchain has strong potential to be the technology that stores medical records of the patients safely. With blockchain technology powering it, patients can be assured that these records are safe, cannot be edited, and can only be accessed by someone who has privacy access.
Property records: The current system of property records is cumbersome and inefficient. Blockchain has the potential to solve this problem and emerge as a solution that makes property bookkeeping smart, efficient, and accurate.
Supply chains: Blockchain can be an important factor in the supply chain industry where tracing the origin of products and their ingredients is of importance. As records in the blockchain cannot be edited, it has the potential to solve the issue of tracking and tracing in the supply chain industry.
Voting: Blockchain could well be used to facilitate a modern voting system in any country. As these records cannot be duplicated, blockchain has the potential to provide a modern solution to the issue of recounting, duplication, and time is taken to count the votes.
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Advantages & Disadvantages of Blockchain
Here are some of the key advantages & disadvantages of blockchain:
Advantages
- Improved accuracy
- Transparency solution with distributed ledger technology
- Decentralized hence harder to edit, recreate or duplicate records
- Accurate records and data
- Results in cost reduction by eliminating third-party verification
Disadvantages
- Still in its early days
- Linked with dark web activities
- Unregulated so far
- Limitations of data storage
