Why is Blockchain Technology Important and Why Does it Matter
Blockchain technology’s rapid advancement shows no signs of slowing. Many seemingly impossible things have turned out to be false over the last few decades, such as high transaction fees, double spending, net fraud, recovering lost data, and so on. All of this, however, can now be avoided thanks to Blockchain Technology.
What is Blockchain Technology?
Blockchain began in 1991 as a method of storing and securing digital data. Blockchain is an open ledger that multiple parties can access at the same time. One of its main advantages is that the recorded information is difficult to change without the agreement of all parties involved. According to IBM, each new record is converted into a block with a unique, identifying hash.
A blockchain is formed by connecting the blocks into a chain of records. Blockchains are used in the Bitcoin cryptocurrency.
What Are the Benefits of Blockchain Technology?
Here is a list of key advantages of incorporating Blockchain technology into your business:
- When a transaction is recorded, it cannot be modified, since it is an immutable public digital ledger
- Blockchain is always secure due to its encryption feature
- The transactions are completed instantly and transparently because the ledger is automatically updated.
- Because it is a decentralized system, there is no need for an intermediary fee.
- Participants verify and confirm the transaction’s authenticity.
Building Trust in Government
According to a Pew Research Center study published last May, American trust in government is at an all-time low. Only about a quarter of Americans believe the government in Washington will do what is right “almost always” (2%) or “most of the time” (22%). Only 18% of Americans believe the government does the right thing most of the time.
One of the negative consequences of digital transformation has been an increase in personal data theft. Hackers are targeting government databases. The 2017 Equifax database breach exposed millions of Americans’ names, Social Security numbers, birthdates, addresses, and driver’s license numbers. According to Booz Allen Hamilton, blockchain data structures strengthen network security by reducing single-point-of-failure risk, making database breaches more difficult.
Increasing Government Accountability
Blockchain could reduce government redundancy, streamline processes, reduce audit burden, increase security, and ensure data integrity in specific applications. GSA’s FastLane process, which manages incoming vendor proposals, is one that could be simplified. According to Booz Allen Hamilton, it currently takes 40 days to process incoming submissions.
Reducing Government Corruption
While blockchain will not eliminate crime, the World Economic Forum (WEF) has identified five use cases for blockchain to address shortcomings in government systems.
- Public Procurement / Government Contracting
According to the World Economic Forum, government contracting is the largest area of government spending with the highest potential for corruption worldwide. A blockchain-based process can facilitate third-party oversight of transactions and provide greater objectivity and uniformity by automating contracts. Transparency and accountability of transactions and participants would also improve.
- Land Title Registries
The blockchain can help some countries improve the efficiency of their land title registries, as we previously mentioned.
According to the World Economic Forum, Honduras and India are collaborating to use blockchain to expand property rights and improve transparency in a process known for corrupt practices.
Land registries based on blockchain technology could provide a secure, decentralized, publicly verifiable, and immutable record system for people to prove their land rights.
- Electronic Voting
Because of concerns about election security, voter registration integrity, poll accessibility, and voter turnout, governments are considering blockchain-based voting platforms.
The information security properties of blockchain could help combat election tampering and increase poll accessibility.
- Beneficial Corporate Ownership Registries
Secretly operated companies, according to the World Economic Forum, provide opportunities for money laundering, influence peddling, and influencing government investments.
Blockchain technology can be used to create central registries that can be used to track conflicts of interest and criminal activity.
It may also enhance transparency and disclosure.
- Grant Disbursements
As a result of the millions of dollars granted to various institutions, the opaque donation process is ripe for inefficiency and corruption. Blockchain technology has the potential to reduce the number of actors and managers while also streamlining and improving verification.
How Will Blockchain Disrupt Industries?
Blockchain technology has benefited several industries, including Unilever, Walmart, and Visa, in terms of transparency, security, and traceability. Blockchain will revolutionize and redefine many industries due to the benefits it provides.
Here are the top 5 prominent industries that will be disrupted by blockchain technology in the near future:
- Cyber Security
- Supply Chain Management
Banking charges transfer fees, which can be both costly and time-consuming for customers. Furthermore, sending money overseas becomes more difficult due to exchange rates and other hidden costs.
Because of blockchain, a middleman is no longer required.
By providing a peer-to-peer payment system with the highest level of security and the lowest fees, blockchain is upending the banking system.
- Blockchain technology enables instant and borderless payments across the globe
- Crypto (like Ethereum, bitcoin) removes the requirement for a third party to perform transactions
- Blockchain records all the transactions in a public ledger which is globally accessible by btc users
Cyberattacks used to pose a significant risk to the general public.
Several organizations were collaborating on an effective solution to prevent unauthorized access and tampering with data.
- Because of the peer-to-peer connections, where data cannot be tampered with, blockchain detects malicious attacks quickly.
- A cryptographic algorithm is used to verify and encrypt all data stored on the blockchain network.
3. Supply Chain Management
Due to the lack of transparency, supply chain management often had challenges like service redundancy, lack of coordination between various departments, and lack of reliability.
Blockchain technology allows for product tracking by facilitating traceability across the entire supply chain. Blockchain allows multiple supply chain partners involved in the supply chain management system to verify and audit transactions.
- In a decentralized distributed ledger, blockchain records a product’s transaction (history, timestamp, date, and so on).
- Each transaction is saved in a block.
- Anyone can use blockchain to verify the authenticity or status of a product being delivered.
Patients in the healthcare system can instantly connect to other hospitals and collect their medical data. Aside from the delay, because the information is stored in a physical memory system, there is a high risk of data corruption.
- Blockchain eliminates centralized authority, resulting in instant data access.
- The blocks are linked to each other in this case and distributed over the node. Hackers are therefore less likely to corrupt the data this way.
Rigged votes are an illegal practice that occurs in the majority of traditional voting systems.
Furthermore, citizens who want to vote must wait a little longer in line and vote at a local authority, which is a time-consuming process.
- Voters are permitted to vote without having to reveal their identity in public.
- It is known by the officials that each ID can be attributed to only one vote, so the votes are counted with high accuracy
- It is not possible to remove votes once they have been recorded in the public ledger.
Fundamentals of Blockchain
1. Public Distributed Ledgers
- The blockchain is a decentralized public distributed ledger that records transactions across multiple computers
- The distributed ledger is a database that is shared among users of the blockchain network.
- Blockchain prevents unauthorized access by employing a cryptographic algorithm (SHA256) to keep the blocks secure.
- Each user in the blockchain has their key
3. Proof of Work
Proof of work (PoW) is a method of validating transactions in a blockchain network that involves mining, which is a complex mathematical puzzle.
In Blockchain, miners are rewarded for using their resources (time, money, electricity, and so on) to validate new transactions and record them on the public ledger.
Blockchain technology will advance further in areas such as business, finance, law, medicine, and real estate. Whether you’re a seasoned Blockchain developer or just starting out, enrolling in our Blockchain Certification Training program will help individuals of all levels of experience learn Blockchain developer techniques and strategies.
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