When it comes to technological advancements, Blockchain is all set to revolutionize industries. Talking about digital transformation, just like we witness the hype around big data or the internet, Blockchain is the new name we are overhearing.
Blockchain is a decentralized, distributed, and immutable ledger consisting of records accessed by members with permission. The Blocks of data cannot be altered without the members’ approval.
According to Gartner Research, by 2025, Blockchain-generated business value is estimated to grow rapidly and reach up to $176 billion.
If you want to know the advantages the blockchain offers, keep reading!
In this article, we have compiled the substantial benefits that blockchain technology can bring to businesses.
- Enhanced Security
Data is valuable, and every transaction that includes sensitive information demands protection. Each previous transaction is linked to the next one in the Blockchain and is encrypted, making it a highly secure record-keeping system. All validated transactions are immutable, and once they are recorded, it is impossible to be altered.
Blockchain makes it difficult for hackers to view data, as it forms a “chain” of Blocks. It stores data across a network of computers rather than a single server. Such ability in Blockchain helps prevent fraud and unauthorized activity.
- Increased Efficiency
Blockchain eliminated the need for third-party or intermediaries and replaced the manual processes, making managing transaction processes much faster than conventional methods. Although, the speed of blockchain-based systems may depend on various factors, such as data block size, network traffic, and more. However, experts believe that Blockchain facilitates faster transactions.
Since the Blockchain records the transactions, it allows retailers to trace the exchange of goods, assisting in inventory management. An audit trail exists to trace the origin of goods, and it makes it easy to verify the authenticity of the traded assets and improve security. It can be used to track the supply chain from manufacturer to distributor, preventing fraud in exchange-related businesses.
- Cost Efficiency
Blockchain has one of the critical uses in the finance industry. They use it to automate their process, increase speed and efficiency, at the same time reduce costs. Blockchain offers easy reporting and auditing processes and facilitates manual tasks. It provides a streamlined process and eliminates mediators, making it cost-effective.
One of the prominent characteristics of Blockchain is that its ledger for public addresses is open to viewing. The transactions are recorded identically in multiple locations with a permissioned access view. Immutability recorded data and time- and date-stamped provide the ability to the members to view the transaction history.
Immutability is one of the main characteristics of Blockchain. It means that once recorded, data cannot be modified or deleted. All transactions are immutably recorded in the Blockchain, are timestamped, and date-stamped, collecting a permanent record. It also offers a reliable and secure information audit, used to track the information over time.
Blockchain allows the transaction to be automated with ‘smart contracts.’ It increases the efficiency and speed of the process. It automatically executes the next step of the transaction once the previous transaction is completed. Automation in Blockchain reduces human intervention and dependency on third parties to authenticate the contract terms.
Blockchain works on the decentralization approach, which means its operation decision-making responsibilities are divided into a hierarchy. There is no center party acting in Blockchain as it enables sharing of data within the business ecosystem. For example, it is used in supply chain management, where there is a system chain from suppliers to producers, distributors, and retailers.
- Innovation Set in Motion
Business leaders of multiple industries keep exploring new ideas and technology that can provide them with embedded solutions. And, implementing blockchain technology in the system resolves a lot of solving obstinate queries. Blockchain-based techniques can assist organizations to work smarter and innovate faster.
- Build Trust
Blockchain offers several business benefits, such as reducing cost, increased efficiency, enhanced speed, and automation. By reducing paperwork, the need for third parties, and errors in transactions, Blockchain is emerging as a trusting technology in today’s world.
Trust in blockchain technology is established with decentralization, enhanced security, greater transparency, and instant traceability. Blockchain transmits accurate and timely data. It is a members-only network; thus, it also maintains confidentiality.
Industries Using Blockchain Technology
Multiple industries use the application of Blockchain technology, such as:
- Banking and Finance: Due to increased speed and enhanced security and efficiency, this technology is influencing Fintech.
- Healthcare: It is used to secure and retrieve a large record of patients’ information.
- Government: Due to guaranteed high service availability and security, the government can rely on blockchain technology.
- Supply Chain Management: It uses its application due to the advantages like cost-effectiveness and traceability.
- Accounting: Blockchain technology provides automation in money transactions, reducing human error and preventing data tampering.
- eCommerce: It manages user activities like payment processing, product searches & purchases, and customer care.
- Transportation and Logistics: It increases efficiency, transparency, traceability and provides order authentication and tracking.
Challenges in Blockchain Technology Implementation
The blockchain development company has been exposed to several challenges during the implementation. Some significant challenges organizations face in blockchain technology implementation are that it is too complex to integrate and lack a well-versed technical team in this field.
For blockchain-based applications, it is required for everyone within the process ecosystem to use the system. Thus, it is not feasible for many organizations to replace their existing systems.
Blockchain is an emerging technology, and people are still having a hard time trusting. The lack of trust people have in the security of this technology or the other parties on a blockchain network is another significant challenge.
Blockchain technology is beneficial to almost every industry, and some main sectors that can benefit the most are Real Estate, Logistics, Healthcare, Finance, and Government.
In this article, we converged on the significant benefits of blockchain technology. Many industries are actively implementing this technology application for assistance in their processes. Now that you’ve realized the potential of this tech, you can make well-informed decisions for your business.
Brian Comel is a software developer in Sparx IT Solutions. His current focus is on blockchain technology and cryptocurrency. In his free time, he writes meaningful blogs & articles and spreads his wisdom on advanced technologies.