Blockchain has made incredible waves as a buzzword in the technology scene due in no small part to its association with the cryptocurrency trend of the late 2010’s. While it was instrumental as the technology behind cryptocurrencies, however, blockchain’s advantages can be easily panned to other software applications as well.
What is blockchain?
According to Internet Society, “blockchain technology enables distributed public ledgers that hold immutable data in a secure and encrypted way and ensure that transactions can never be altered.” To put is simply, instead of centralizing data, it allows data to be spread across a network in secure “ledgers” of transactions. That means no one has any complete control over that data.
The positive implications of this are clear, as we enumerate below.
One primary benefit of the “distributed ledger” of a blockchain system is that data is “immutable” (or not possible to modify) which effectively protects its integrity. Since no one has unrestricted or centralized control over the data, no one can alter transactions to their advantage. Likewise, the permanence of data and transaction records makes it unlikely for fraudulent activities to happen within the system.
As the data is distributed across several nodes, it is not easy for anyone to gain access to all of your data. If one node is compromised, only an unintelligible portion of the data will be present. Likewise, the encryption and other security measures used in blockchain systems ensures that even the bits of data in one node cannot be easily read or modified.
The decentralized nature of a blockchain system also makes sure that data is accessible without relying on a service provider’s availability. While a distributed server setup can achieve a similar effect, distributed servers are often owned by the same provider and is consequently still subject to the technical malfunctions and limitations of the provider.
Related to the other benefits, the nature of blockchain to have data shared across several nodes results in a system where you don’t need to entrust any particular 3rd party – credit card companies, banks, or payment processors – with keeping your data safe and maintaining its integrity. The distributed ledger transfers that power to the system itself, which independently verifies transactions through the multiple nodes in the network. This particular characteristic of blockchain is what made the technology ideal for cryptocurrency, which is built on the foundation of not requiring a central authority to control the exchange.
Beyond the cryptocurrency world, blockchain technology has started gaining even more ground as its use is spreading to many industries including real estate, asset management, and other areas where transaction integrity is crucial. Governments, as well, are learning of its applications. According to VentureBeat, both the U.S. and China are now finding more practical ways to use blockchain technology to prevent information leakage and Internet fraud.
READ: Technology Trends That Will Continue To Grow In 2020
If you’re looking for a means to capitalize on blockchain technology to build a better, more reliable software system for your business, we have recently signed a partnership with ProximaX, a leading blockchain platform provider, to develop and integrate their solutions into our software systems. Contact us today for a FREE consultation.