The real value of the blockchain is that it decentralizes data without relying on one controlling authority. It makes true disintermediation reality. Blockchains denaturalize data storage without central authority such as bank or government, help protect the data from hacking.
Blockchains disintermediation adds an additional layer of security that is not possible in any other way. When a single server is storing the data, a lot can happen, but when blockchain technology is applied, the data is almost tamperproof.
The decentralized nature of the blockchain makes it impossible to manipulate data. A government can easily manipulate a centralized computer, but with blockchain, data is stored on numerous computers and data manipulation is almost impossible. The technology also reduces human error.
The users are more empowered with Blockchain technology because the users control both the information and transactions. The users decide the rules of the transactions, not an intermediary.
Improvement in data quality
Blockchain data is widely available, accurate and of consistently high quality.
The technology is much more reliable because the network does not rely on a single server. Instead, the network is reliant on several nodes. Even if the 90% of the nodes within the system went down, the others would still function and provide accurate data.
The blockchain outlasts a traditional network because the system relies on several nodes and not a single server.
As mentioned earlier, any user can see any changes made to the network. So there is nothing hidden within the blockchain.
Once transactions have been verified and added, they cannot be altered or delet- ed. The blockchain is a permanent record.
A decentralized, central ledger makes everything lot simpler and helps avoid clutter.
Transaction speed improved
Because of the verification process, there is some delay in getting the transactions added in the blockchain, but it is still faster than the traditional systems.
For example, think of a financial transaction. When transferring money from bank to bank, the transaction must first be checked and authorized internally by the sending bank and then passed onto a clearinghouse before being transferred t0 the receiving bank and finally added into the account.
All these steps take time, and if there are holidays, then it will take even more time. With the traditional system, the transaction is done only during business hours when the banks are open. However, with the blockchain, the transactions are quicker because they are done directly and can be processed at any time.
The cost for running the blockchain technology is cheaper because the computing power required to run the network is divided amongst users. The simpler verification process means that the cost of security is lower.
The technology can be used for different applications. For examples, you can use it to facilitate financial transactions or use it to create a ledger for property ownership. It even could be used in healthcare to allow better access the patient healthcare records.
Let’s discuss how it can be used in real life. Imagine you have gone to your doctor’s office for a regular checkup. In a traditional system, all your files are kept with the doctor, and only they can view it.
If you changed doctor or get admitted to another hospital, the authorities or other doctors have to get the records from the previous doctor. However, with blockchain, your doctor could update your medical record to the system. If you changed doctors or get admitted to a hospital, the authority just needs to access the network and find the necessary files.
Also, medical companies could connect to the network to access relevant information. This will allow them to make the payments of medical claims faster, less expensive, and less vulnerable to fraud.
Governments can also benefit from using blockchain technology. The network could be utilized for easier exchange of information between different departments.
The transparency and verification process of this system could be useful in pre- venting corruption.
The legal system can also benefit from using blockchain technology.
Blockchains can contain copious quantities of data securely. Smart contracts are protocols that allow the facilitation and enforcement of contracts. Blockchain will remove the need for an intermediary in any aspect of work.
An open-source system
The blockchain is open-source and viewable to all the users. Open-source brings transparency and trust to the system.
Features that set Blockchain apart
Blockchain has characteristics, which mark it as something transformative, even transformative than the World Wide Web. Blockchain at its core is basically a database. One that is especially good at dealing with transactions about assets, whether they are abstract like customer data or physical assets such as cars or financial assets.
Here are the key characteristics, which make the technology different:
6. Immutability of the data: creating immutable ledger is one of the main value propositions for blockchains. History shows that any centralized database can be hacked and usually needs a third party to keep the information authentic.
Blockchains uses hashing power of thousands of computer to confirm every new transaction and prevent any hacking attempt. Once you finish a transaction, it can’t be changed or reversed. You can never hide the original transaction, but you can subsequently record another transaction about that asset to change its state.
This process is called the provenance of assets. This means that you will know an entire history of an asset. To change the blockchain or the history of the transaction of any cryptocurrency, one needs to control at least 51% of the hashing power.
7. Better security: there is no single point of failure to shut down the network, so the blockchains tend to have better security. For example, Bitcoin has never been hacked, (but it is possible to hack a person if the private keys are not fully secure) but even the highest levels of financial systems are vulnerable to hacking.
Many computers run nodes and confirm transactions on the network to provide security to the blockchain. To reward miners (aka cloud mining)for securing transactions on the ledger, public blockchains use the currencies they produce as a reward.
8. Increased capacity: increasing the capacity of an entire network is one of the remarkable things about peer-to-peer technology. Thousands of computers working together can provide greater power than a few centralized servers.
Foldingcoin – a good example of the power of blockchain technology. Stanford University start- ed this project and built a distributed supercomputer that mimics protein folding for research. Usually, a multi-million dollar supercomputer is needed to simulate a protein folding. However, the Foldingcoin project builds it by using the cheap distributed network.
9. The blockchain is designed to be distributed and synchronized across various networks. This aspect makes it perfect for multi-organizational business networks such as financial consortia or supply chains. It will encourage companies and organizations to avoid their firewalls and exchange data.
10. It is not possible to do whatever you want with data. Data stored in the blockchain as smart contracts give confidence to every participant that everyone is playing by the rules.
11. Faster settlement: international transactions with fiat currencies are very slow, and it takes days to complete transactions. On the other hand, blockchains can generally settle money transfers instantly. This saves time and money for the whole financial industry.
12. To make a transaction valid, all parties must agree. For example, if you decide to sell a car, the car should belong to you, or you won’t get any agreement.
This process is called consensus and helps to avoid fraudulent transactions.