What are Blockchain Technology and its importance?

Blockchain is a series of data linked together. Every single transaction is linked to the chain using cryptographic principles in batches, making blocks. The blocks are connected to each other and have unique identifier codes (called hashes) that connect them to the previous and the subsequent blocks. This forms a blockchain, usually in the form of a continuous ledger of transactions. It isn’t owned by any one individual. The series is managed and stored across several computer systems. Each ledger is shared, copied, and stored on every computer
connected in the system.

This decentralized nature of storage provides security, since changing the details of one record will cause the hash of that block to change, disconnecting it from the next one and causing the latter’s hash to change, and further such disruptions. Since the data is stored on multiple systems, any person looking to change the details on one system will have to do it for every other system as well.

Importance of Blockchain

Blockchain technology has been the backbone of bitcoin and other cryptocurrencies. The transparency and the security offered by the technology are some of the main reasons why cryptocurrency has become so popular. This technology is increasingly being adopted in the retail, manufacturing, and banking sectors due to its benefits, like eliminating middlemen, providing data security, reducing corruption, and improving the speed of service delivery. It can be particularly useful in maintaining government data related to public transactions. For instance, if all land records are moved on a blockchain, with each subsequent buying and selling of a property being recorded as a block that can be publicly accessed, corruption can be arrested, and governing will be made so much easier. Similarly, hallmarked gold jewelry can be moved on an open-source blockchain ledger, which can be maintained by jewelers and viewed by consumers.

However, blockchain technology must be adopted in a gradual manner. Bitcoin and other cryptocurrencies have seen wild fluctuations in value, due to the lack of regulatory supervision. The open nature of the technology implies that anyone can adopt it, which is partly why the government is hesitant to go ahead and use it. Scalability, transaction speed, and data protection are key technological hurdles, along with the difficulty of integrating the technology into existing financial systems. Many legal and regulatory challenges are also involved.

Blockchain is a developing field and its practical uses are being explored in many areas. You may want to adopt this technology in your business if you are a B2C company and want to improve the user experience or enhance transparency. There is a possibility of some data, such as banking transactions, land records, and vehicle registration details, moving on the blockchain platform in the future. Example: Even recent entrants like Uber and Airbnb are threatened by blockchain technology. All you need to do is encode the transactional information for a car ride or an overnight stay, and again you have a perfectly safe way that disrupts the business model of the companies which have just begun to challenge the traditional economy. We are not just cutting out the fee processing middle man, we are also eliminating the need for the match-making platform.

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