Amid the popularity of cryptocurrency, blockchain technology has also become a familiar term across multiple sectors. Moreover, organizations from different industries started incorporating blockchain in their daily operations because of its versatility.
If you’re running a data-driven business, there are plenty of ways you can benefit from using blockchain technology. Below, we’ll discuss how exactly it can help your company thrive in this digital age.
The Basics of Blockchain Technology
Blockchain is a type of system that records transactional information about cryptocurrencies. It’s an immutable and decentralized database that keeps records on multiple computers connected by a peer-to-peer network. As a result, the data is more secure and less likely to be accessed by unauthorized parties.
Every block in the network comprises multiple transactions and associating details. Furthermore, every new transaction adds to the registry a record of all entities engaged in that transaction.
Blockchain technology became known due to its link to Bitcoin, the most popular digital currency. In a nutshell, Bitcoin was the first crypto to use blockchain upon its establishment in 2008.
Though decentralized, bitcoin transactions are validated through mining, a process that entails creating new bitcoins by solving complicated cryptographic hash puzzles.
How Blockchain Technology Can Benefit Organizations
The main selling point of blockchain is its heightened security. Thanks to its immutability, a blockchain network provides a higher level of protection for a company’s private information. Hence, it can bring significant value for industries with a lot of data like finance, accounting, health care, and retail.
Accordingly, blockchain networks differ based on degrees of privacy and control. For example, an is a permissioned database suitable for large organizations because the visibility of recorded data can be restricted to a select group.
Since blockchain systems operate on a shared infrastructure, they can preserve data integrity and increase transparency. Blockchain can also modernize complicated data management systems and make data collection processes easier, faster, and less costly.
- Decentralized structure
Blockchain technology’s decentralized nature means that all transactions it records are not governed by a single entity and are instead shared across a network of multiple computer systems.
Because no individual party is in charge of the blockchain, the data cannot be manipulated and modified by one group. Records can be routed through a supply chain that includes manufacturers, retailers, and distributors. This open exchange of information, with no single governing body in charge of the process, helps increase data transparency and promotes accountability.
- Enhanced privacy
You can keep your anonymity when you use a blockchain system. Unlike conventional online databases, blockchain technology conceals the identities of all parties engaged in the transaction.
Moreover, because the process cannot be changed or interfered with at any point along the route, all users can complete business transactions with confidence and integrity.
In addition, the blockchain system can grant parties wanting to access a specific detail of the transaction a set of permissions that don’t compromise the confidentiality of other users.
- Stronger security
Security threats are a major concern for typically every industry. Fortunately, blockchain systems can guarantee the safety and security of your company’s data. They keep an undetectable record of end-to-end encrypted transactions, withholding access to potential hackers.
Furthermore, the technology stores transactional data in multiple computer systems, making it considerably more secure than traditional databases that operate in a single computer system. This setup also makes data recovery more convenient and efficient.
Because blockchain can make processing transactions easier and faster, it reduces the need for manual tasks like data collection, editing, reporting, and auditing. Fewer steps mean lower costs for companies and their clients, especially for financial institutions.
In addition, blockchain technology can help businesses save money by removing intermediaries—such as third-party providers and vendors—since many processes have automation capabilities.
- Improved efficiency
Blockchain outperforms traditional recordkeeping systems in terms of speed. Amazingly, storing a digital transaction in a blockchain network sometimes takes only a second. This is where the transaction per second (TPS) notion comes into play, which pertains to the minimum number of transactions occurring in the system every second.
To properly understand TPS, consider how long a bitcoin transaction takes. The process usually needs about 10 minutes to complete. Because blockchain informs the recording of bitcoin transactions, it can accommodate ultrafast transaction speeds.
- Increased transparency
Due to its decentralized structure, you can quickly view your company’s transactional data and entities sharing a personal node. Users can observe their transactions in real time through blockchain explorers.
The transparent nature of blockchains makes it very straightforward to trace and pinpoint an issue. If anybody attempts to alter the data, you can easily detect it. Furthermore, each entity involved in the transaction process has a copy of all information.
Blockchain allows you to automate business transactions involving smart contracts. These digital contracts can also be recorded on a blockchain. Once the predetermined requirements are met, the smart contracts automatically proceed to the next step of the process.
Indeed, the technology is an excellent way to improve the efficiency of your operations. Because intermediaries do not need to handle manual contracts between parties, you can close transactions immediately after submitting documentation details.
In an age where everything is becoming digitized, traditional data collection techniques may no longer be up-to-date. Accordingly, blockchain technology has successfully revolutionized data-driven sectors in recent years. Thanks to its impressive benefits, it has earned a top spot in the list of technologies businesses should learn and adopt in order to grow.
Integrating blockchain into your operations can effectively protect your data, streamline processes, and reduce running costs.