Blockchain may be considered one of the most important technological advancements of recent years. It helps enhance information security by creating decentralized databases. Blockchain solutions are applied everywhere, from the financial industry to healthcare facilities. Lots of executives mention this technology as a primary area for investment in the upcoming years. But what makes this technology so appealing? Let’s find out!
What Is Blockchain and How It Works?
Before discussing the advantages of blockchain, it’s essential to understand the technology behind this concept. Blockchain is just another way of storing information – a file that keeps some data. However, this file is different from, say, a .txt text document that you can create and store on your device. Once a record, or block, is created using blockchain technology, it automatically receives a timestamp, which prevents retroactive access and any modifications to the stored data. New blocks with related information are linked to the existing ones, thus forming a chain. All rings of such chains become interconnected, making it impossible to modify one block without changing all the others.
Decentralization is often regarded as one of the main advantages of blockchain. Since calculations are performed not on one particular server but multiple independent machines, there’s no entity or person capable of modifying the data stored this way. Hence, information stored in such chains can’t be modified without a consensus of all users of the network. A price of 1 Bitcoin, for instance, isn’t influenced by banks, governments, or organizations; it’s determined by people who agree to assign a certain value to the cryptocurrency.
Advantages of Blockchain in Business
This technology offers numerous benefits to business owners and customers. To obtain a general idea of its capabilities, check out the following notable blockchain use cases:
- Smart contracts. Smart contracts are an outstanding tool for managing legally relevant events. They help reduce expenses on intermediary services and enforcement costs, fight fraud and malicious exceptions.
- Simple and affordable international payments. Unlike traditional bank services and wire transfers, cryptocurrencies involve no transaction fees. The decentralized nature of cryptocurrencies presupposes the complete absence of regulatory organs; so, there’s no one able to charge any commissions.
- Simplified auditing. Blockchain solutions make accounting simpler through automating data collection and processing. Besides, blockchain helps reduce the influence of human factors on mistakes in accounting.
- Personal data protection. Being completely decentralized, blockchain is a perfect tool for handling sensitive information, be it health records or financial statements. There’s no better tool to secure your data from unauthorized access than storing it in multiple locations using a blockchain solution.
Industries that Use Blockchain
The technology in question is extremely flexible, which makes it suitable for use in any field. Medical facilities utilize the blockchain to ensure that personal information of patients is well-protected. Media organizations use it to secure their content and decrease transaction costs. Blockchain also allows for near-real-time monetization, which helps creators save from 40% to 80% on payment processing. Whichever industry you are working in, you’ll need a reliable partner to provide proper software. Consider reaching out to Innovecs or a groundbreaking blockchain solution.