Blockchain Technology and Its Future

Blockchain has made a hit, recently. There has been a lot of murmur and rumbling among the investors regarding it, and without any doubt it has become a trendiest technology in the past few years. For a layman it might be a baffling term, but those geeking out over this subject might find this blog very helpful. So let’s delve deeper!

What is Blockchain Technology?

Blockchain is a user friendly way of storing and keeping record of the information or transactions. To be more precise, it is a model that stores or keeps transactional data (which can be referred to as blocks) of people in some databases (also known as chain), through a peer to peer network. Blockchain is a safe and secure structure as each and every transaction is sanctioned by the owner’s signature in a digitalized way, so there are no issues of tampering or corruption of data. Through a nexus of computers, the transaction are distributed and duplicated. As blockchain is a digital ledger, it strongly prevents system from being hacked, reverted or manipulated. 

Blockchain technology has been underpinning applications from different sectors for example ecommerce, supply chain, banking and finance, health care, manufacturing etc. Such businesses manage their transactional information through in house teams or through external sources like brokers, financial analyst, or lawyers. This can be costly and time consuming procedure. Blockchain makes your transactions hassle free, transparent and less costly, cutting short this whole long process. Some people confuse this technology with Bitcoin but these two are not the same. Bitcoin currency itself depends on Blockchain to safeguard itself. 

Blockchain is an amalgamation of the below mentioned technologies:

1. Peer to peer network that has a distributed ledger

2. Cryptography keys: There are two keys in cryptography, private and public which makes transaction between two individuals easy and successful. These two parties are connected with each other through a network. Each party possess both these keys which helps them to produce a digital signature and a safe identity. These keys are responsible for the authorization and management of your transaction

3. A system to compute and store data or transactions and maintain network's record

Advantages and disadvantages of Blockchain

Some advantages and disadvantages of Blockchain technology are listed below:

1. Safe and secure: Blockchain's digitalized form of signature has made the transactions secure, without the risk of fraud or scam. Through this unique feature no one can copy signatures, data cannot be corrupted or altered by other users. As more blocks are added to the chain with updated information, it becomes difficult for hackers to make changes to it.

2. System is decentralized: Normal transactions usually require the prior approval of regulatory commission such as the banks or respective government departments. However, in the case of Blockchain transactions takes place mutually, through the agreement of both parties/ the users. This makes transactions faster, efficient, and trouble free.

3. Automated feature: Blockchain allows you to have automated verification as it is programmable and no middleman is involved in this process and payments are made automatically. This feature makes it more systematic and organized in terms of processes and actions. 

4. Fast and efficient: Unlike traditional banking systems which takes days for the completion of transaction, blockchain is a very convenient and a faster alternative. No other financial institutions are involved and it takes few minutes for a successful transaction.

Disadvantages of Blockchain

1. Cryptographic keys are required: One major disadvantage of Blockchain is that it requires both private and public keys. In case an individual loses his/her private key it can be very problematic and you will have to face dire consequences. 

2. Scalability issues: Another problem is associated with scalability. You can make specific number of transactions per node which makes the transaction process long (sometimes several hours to complete).

3. Immutability: Immutability is another disadvantage. Once data is recorded it is difficult to edit or make changes in it.

The four major branches of blockchain are:

1. Public blockchain Network

For this blockchain you do not require any permission. Anyone can freely join it, carry out transactions, or take part in the core activities while their identity remains hidden. Bitcoin, Litecoin and other cryptocurrencies are included in this. In Public blockchain network, there are no issues of corruption, centralization or security glitches. The nodes manage the network and also update the ledger. While the consensus algorithm establishes reliability by validating the information.

2. Private blockchain Network

This is mostly used by large companies and organizations where you require a consent or permission in order to be a part of the network. Private blockchain network relies on third parties for transaction and network administrator handles it. Customization options are available for security and accessibility.

3. Hybrid blockchain network

This is also called permissioned blockchain that grants distinctive access to authorized members. Many companies use this blockchain because it is very efficient. They can also decide who can take part in the network and in which transaction.

4. Consortium Blockchain

Just like hybrid blockchain it is a combination of private and public blockchain networks. But one thing that distinguishes it is that a bunch of organizations have to control and handle one consortium blockchain network. This whole procedure of collaborating with different organization to set up a network can be very complex, but once it’s operating it can provide greater security.

Ways to invest in Blockchain

There are several ways to invest in blockchain technology which can be very fruitful. You can invest in Bitcoin or Penny cryptocurrencies such as Stellar, Litecoin, Ethereum, Altcoin etc. Individuals can also invest is new businesses that are emerging and using blockchain technology. Apart from that, experts are also developing some apps to collect funds by using this technology and you can buy coins which can be a lucrative investment. In future an increase in the prices will be beneficial for you if the app gains popularity among the public.

Scope of Blockchain

There has been a paradigm shift in the financial sector since blockchain technology came into existence, stirring up many individuals who can have a prospective career in this promising field. It is a field that is being accepted globally, mainly because of its data security feature which effectively deals with money laundering and black money related issues. The potential threats to businesses are increasing so they are being touted and lured towards this technology in order to secure their data. Let’s see how it is progressing in different industries:

Cybersecurity

Blockchain has more scope in terms of cybersecurity. Since companies are vulnerable to external threats like illegal seizure of data or data tampering, cryptography encrypts their data. Also, the ledger ensures that sensitive data remains safe and verifiable.

Healthcare

In healthcare niche, blockchain can not only keep a safe record of the patient’s data but also assist in the smooth running of operations such as billing and payments.

Supply chain

The traceability feature of blockchain has revived the supply chain sector. As goods and materials pass through different processes, blockchain keeps a check on all the procedures. It overlooks the expenses, reduces human errors and tracks employment. Thus, minimizing the chances of fraud and enhancing reliability. It also helps in auditing, ensures that there are no time delays and easily maintains transparency. Blockchain can put an end to grey marketing and prevent the loss in company's revenues, too.

Financial Institutions

Undoubtedly, Blockchain has been consistent is delivering what it promised. After assessing the progress of blockchain many financial institutions have started investing in it, particularly because of the way it immaculately deals with the issue of black money. Governments are taking initiative to adopt blockchain technology in order to buff the economy through its transparent ledger system.

IT Industry

In IT industry, there are multiple cases of data loss, theft, hacking or human errors. All these are because of the centralized system, but blockchain addresses them by resisting the hackers and providing better security in terms of cloud storage.

Digital Advertising

Digital advertising has to face fierce competition from its rivals on daily basis. Sometimes failures are due to poor payment structures or domain name scams. Blockchain can help them to efficiently manage their budget and transactions because of its dependable and transparent nature.

On the whole, the hype about Blockchain is real and this technology is mounting because it is reliable and immutable. Since 2017, the blockchain and cryptocurrency are being considered as the most valuable assets in the financial market. The government of many countries are planning to participate in the open market by investing in digital currencies. In the upcoming years, there will be massive demand for experts in the field of blockchain. Though, blockchain is currently in a nascent phase but it has a long way to go and investing in it will not go in vain.

By Shehr Bano