What is Blockchain Technology?
A distributed database shared among computer network nodes is termed blockchain technology. The public ledger stores data and information in a digital format and is best known for its fundamental role in the crypto industry. Along with this, the technology is also responsible for maintaining a secure record of decentralised transactions on the platform. With the rise and growth in the ekrona app, blockchain innovation offers fidelity and security of the stored data gaining trust, and eliminating third-party access. Another major key factor of blockchain technology that makes it different from conventional databases is its data structure. The platform collects info in the form of groups termed blocks. These blocks hold a certain degree of storage capacities and are closed and linked with blocks, one filled. This continuous filling of blocks data and linking forms a chain of data, which in turn is termed as blockchain.
Advantages of Blockchain Applications
1. They are transparent – A blockchain is a form of distributed ledger where all nodes of the network share a copy of the documentation. The data is accessible and transparent to all reaching a broader audience. Transaction history undergoing changes and regular updates are made public to the audience, hence services become more transparent and trustworthy.
2. Security factor – When it comes to security, blockchain services have proven themselves to be the most acceptable by all means. The shared transaction copy can be updated or modified only via consensus on the blockchain network. Moreover, approved transactions are encrypted and linked with the previous block hence hindering third-party access and interference. The decentralised nature of blockchain services allows it to protect sensitive data in industries such as healthcare, financial, or even government.
3. Efficient – Blockchain services are far more efficient when compared to the conventional paperwork method. The technology can streamline and discipline legacy methods, hence eliminating risks of mistakes and making the feature more efficient and rapid. Along with this, there is completely no need to maintain multiple documents as the concept functions upon one single ledger.
4. Lower cost – Due to third-party access limitations, it saves an enormous amount of business costs. There is no need to establish rules and policies of exchange by a trading partner. This results in lower cost and effort on documentation and revisions since everyone gets to view the version on the public ledger.
Disadvantages of Blockchain Applications
1. Scalability – Cryptocurrency like blockchain can only handle seven transactions per second, whereas Visa can handle 24,000. The scalability issues become prominent when it comes to the practical use of blockchain applications. As each participant node needs to verify the transaction for approval, the bitcoin exchange can consume several hours for the process.
2. Storage – As data blocks are stored on the network nodes, there rises a storage issue. The increased number of transactions increases the database, plus there is completely no way to store data on personal computers. The ethereum blockchain is working to increase the storage and data speed at 55 GB/year.
3. Privacy – Though the data blocks are encrypted and anonymous, it still lies in the hands of network nodes giving everyone access. This creates a possibility of someone tracking the identity of the person via transactional data just like web trackers and cookies. Hence, this gives a clear example of blockchain services security.
4. Security – By security, it majorly means cyber attacks. When bitcoin was launched by satoshi, the developer mentioned the 51% attack he faced.
Types of Blockchain Applications
1. Public blockchain-based services – These services are decentralised and secured by crypto-economics (a combination of economic incentives and cryptographic verification). Some examples of public blockchain-based services are – ethereum based applications such as decentraland, Blockstream etc.
2. Private blockchain-based services – These services require permissions that are kept centralised to a single organisation. Here the access and permissions are strictly restricted to a central authority for controls and modifications. Examples are – Eris industries, Multichain, Blockstack etc.
The wider acceptance of cryptocurrency has certainly led to a number of blockchain-enabled applications being used today. However, before getting into the world of blockchain and cryptocurrency, one needs to understand the pros and cons each innovation comes with.