Blockchain & Advantages

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Blockchain & Advantages

Blockchain

The blockchain is a distributed database because every block contains multiple transactions it is also called open ledger of electronic transactions that can be programmed to record, not a just financial transaction but anything of value.

It is very secured technology because it create a direct transaction between two parties not required a third party and every person which present in a chain will able to see the transaction and validate it.

Working of blockchain

Step1: Party A sends funds to party B.

Step2: The transaction is configured in a block.

Step3: The transaction is a broadcast across the entire network which validates it.

Step4: The block is added to the chain which records the entire non-reversible history of transactions in a public ledger.

Step5: Party B receives funds from party A.

 

Benefits of blockchain

  • Peer-based communication: Communication is not through a central node, but occurs directly between peers each node stores and forwards the information to all other nodes.

  • Transparency: A blockchain technology is an open source. In this technology, other users or developers have the opportunity to modify it as they see fit. But most important about it being open source is that it makes altering logged data within a blockchain incredibly difficult.

  • Transaction costs: Transaction cost will be less because blockchain allows the party to party business-to-business transactions to be completed without the need for a third party, which is often a bank. Since there no other one involved in transactions that’s why it reduces costs to the user or businesses over time.

  • Durability: When there’s no central regulator, there’s no central point of failure as well. The blockchain is more resistant to different types of malicious attacks.

  • Distributed database:  It is a distributed database, in a block change each entity on a blockchain can access records on the entire database, but no single entity controls the data or the information.

  • Loss of data: All miner has a full copy of the ledger on their system, it is virtually impossible to lose the data stored on a blockchain

  • Provide high accuracy: Since all the execution of contracts and other processes are automated, the errors are much less possible.

  • Increased security: All information is encrypted, something which adds security by its own. Also, the fact that the users can not interfere with the system and change the information stored in the blockchain protects the market from fraudulent activities and various documentary manipulations.

Uses of Blockchain

  • Payment processing and money transfers: The most logical use for blockchain is as a means to further the transfer of funds from one party to another. As noted, with banks removed from the equation, and validation of transactions ongoing 24 hours a day, seven days a week, most transactions processed over a blockchain can be settled within a matter of seconds.

  • Monitor supply chains: Blockchain also comes in mainly useful when it comes to monitoring supply chains. By removing paper-based trails, businesses should be able to pinpoint inefficiencies within their supply chains quickly, as well as locate items in real time.

  • Equity trading: At some point, blockchain could rival or replace current equity trading platforms to buy or sell stocks. Because blockchain networks validate and settle transactions so quickly, it could eliminate the multiday wait time investors encounter when selling stocks and seeking access to their funds for the purpose of reinvestment or withdrawal.

  • Immutable data backup: Blockchain may also be the perfect way to back up data. Even though cloud storage systems are designed to be a go-to source for data safekeeping, they’re not immune to hackers, or even infrastructure problems.

  • Digital voting : Blockchain offers the ability to vote digitally, but it’s transparent enough that any regulators would be able to see if something were changed on the network.

 

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