When Satoshi Nakamoto launched Bitcoin back in 2008, people were introduced to the concept of cryptocurrency for the first time as well as that of blockchain. This was the name of the technology that powered the world’s first cryptocurrency and since then, the two have been associated very closely as all Bitcoin news involved the mention of blockchain. However, it is important to remember that they are not the same thing; bitcoin is a digital currency that can be used for making payments, while blockchain is the technology it uses for offering a decentralized peer-to-peer cash system.
It was a new concept back then, but today, innovators are finally coming to understand the benefits and potential of the blockchain behind Bitcoin. It has changed the way people perceive problems because it can solve some major issues, such as trust in a network. Whether it is finance or medicine, a number of sectors are contemplating how to incorporate blockchain into their infrastructures in order to take advantage of it.
Blockchain technology can offer new opportunities and can deliver a world of benefits for businesses because of its trustless and decentralized nature. It is essential to remember that blockchain solutions don’t have to be limited to the crypto space only. As aforementioned, this technology can provide numerous benefits to businesses in various industries all because of its decentralized and distributed nature. What are these benefits? Let’s take a look at some:
- Greater transparency
The greatest characteristic of blockchain is the fact that it is essentially a public transaction ledger that’s open to viewing for everyone. In businesses and financial systems, this can be helpful in adding a layer of accountability because every business can be held responsible for acting with integrity towards the customers, community and the business itself. There is no centralized authority involved here, which means one person does not control it and this makes it free of manipulation as well.
- Increased efficiency
The decentralized nature of blockchain allows this technology to eliminate the need of a middleman in numerous processes for industries like real estate and payments. As opposed to traditional financial services, people can enjoy faster transactions through blockchain because it allows a digital currency to be used for P2P cross-border transfers.
- Better security
One of the most prominent benefits that blockchain technology has to offer is security. It is far more secure as compared to any other record keeping system you will find because every transaction is encrypted and is also linked to the previous transaction. As the name suggests, you can form a blockchain through a network of computers that come together for forming a ‘block’. Once the block is validated, it is added to a public ledger and as more blocks are added, it forms a ‘chain’.
A complicated series of mathematical numbers is used to form a blockchain and it cannot be altered once it has been formed. This incorruptible and immutable nature of blockchain keeps it safe from hacks or falsified information for that matter. The decentralized nature of blockchain also makes it ‘trustless’, which means that participants can transact safely without requiring to trust a third-party.
- Improved traceability
Every time a transaction is recorded on the blockchain, you can find an audit trail that shows where it originated. This not only helps in enhancing security, but can also prevent fraud. Furthermore, it is also handy in verifying the authenticity of the assets traded. It can be used for obtaining proof of ownership in several industries.
Along with these benefits, you will find that blockchain technology can also help in keeping costs down because no third-parties are involved and there is no centralized authority in play either. Therefore, this technology can have applications in a number of industries. These include energy, finance, real estate, healthcare, logistics, government and more. It has turned out to be a revolutionary technology that got its exposure because of bitcoin and other cryptocurrencies.