For some years now, the term blockchain technology has tremendously gone viral. When you come in contact with such a term, you may be asking yourself, “What is blockchain technology? What’s its benefit? and whether or not it has real-life applications?”
In this article, we will briefly discuss blockchain and the benefits of the technology.
What is Blockchain Technology?
Blockchain is an advanced database mechanism that authorizes the sharing of information with total transparency within a peer-to-peer network. The technology allows the participants of a network to reach a common consensus, which allows the data to be stored permanently.
Blockchain technology works by establishing a decentralized ledger, with each block in the chain containing a record of transactions that are validated by a network of computers known as nodes. Once added to the chain, a block cannot be changed, resulting in a tamper-proof and transparent ledger.
Blockchain has become very vital due to the role it plays. It can be used to create a ledger that can not be altered for payments, accounts, tracking orders, and other transactions.
There are four types of blockchains which are: public blockchain, private blockchain, hybrid blockchain, and consortium (federated) blockchain. Each blockchain network has its peculiarities that drive its uses.
Benefits of Blockchain Technology
Blockchain creates a decentralized, tamper-proof system to record transactions. The use of blockchain technology is more suited to some enterprises and sectors than others. Some of the sectors and enterprises that make use of this technology include financial institutions, healthcare, energy companies, media and entertainment, and government agencies.
For instance, in a property transaction, blockchain creates a ledger each for the seller and also for the buyer. However, the importance of blockchain technology cuts across its uses in all these sectors and enterprises. The benefits of blockchain technology to different industries are described below:
Retail
Blockchain provides a platform for retail companies to track the movement of their product between the supplier and the buyer.
Major trading companies and consortiums are realizing the transformative impact of blockchain in facilitating global supply chains, managing trade finance, and unlocking new business models.
Media and Entertainment
The blockchain system is used majorly by media and entertainment companies to manage copyright data.
Blockchain technology can track the life cycle of any content, which has the potential to protect digital content and facilitate the distribution of authentic digital collectibles. Blockchain technology also helps media and entertainment companies to manage copyright data. The benefits of blockchain to this sector also include peer-to-peer sales and content distribution, streamlined royalty payments, and usage-based billing models.
Finance Institutions
Financial institutions such as banks and stock exchanges, use blockchain services to manage online payments, accounts, and market trading. Some financial trading companies also use blockchain technology to build more efficient interbank payment accounts.
Blockchain makes the verification of all transactions easy, by ensuring an accurate process of transactions by the banks.
Energy
Blockchain systems ensure confidentiality and transparency in transactions, which is why blockchain and energy companies make good teams. Blockchain technologies facilitate the trade and purchase of energy directly from the grid rather than from retailers. Blockchain has also proven to be a helpful tool for using and transferring electricity on a local loop. It has positioned itself as the technology that could propel the growth of the energy sector.
Healthcare
Blockchain’s distributed ledger technology enables the secure transfer of patient medical records, strengthens healthcare data security, manages the medicine supply chain, and also aids healthcare researchers to unlock genetic code.
Some of the examples of blockchain technology that are used in the healthcare sector include Akiri, BurstIQ, Medicalchain, Guardtime, Avaneer Health, ProCredEx, Coral Health, Patientory, Chronicled, and also Embleema.
Conclusion
Blockchain technology has the potential to transform a wide range of businesses by allowing safe and transparent data sharing, cutting costs and middlemen, and increasing trust and efficiency. The benefits of blockchain technology are wide and diverse, ranging from banking to healthcare, supply chain management to real estate.
As the years have gone by, we have seen blockchain technology evolve to create novel applications such as decentralized autonomous organizations (DAOs), smart contracts, and more.
Blockchain technology, with its promises of decentralization, transparency, and security, is set to alter the way we live, work, and communicate with one another. Being a part of this technological revolution is an exciting moment, and the opportunities are limitless.
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