The blockchain is mainly a decentralized database that can be stored on several computers as identical copies. It is decentralized and highly secured because no single user can remove an entry in it. So, if they want to do it, they have to change all the nodes, which is practically impossible.
Because of its highly encrypted and secure nature, this technology has been used as the foundation for Bitcoin, considered the world's most popular cryptocurrency. The applications of this technology are limitless. As per the statistic, the market for Blockchain technology is expected to be worth $20 billion by 2024.
The blockchain mainly solved vital issues such as trust in a network. So, as it is a trustable technology, any organization can solve a business problem with this. Many blockchain development companies are now available in the market to help these organizations.
How Does Blockchain Technology Work?
There are several blockchain solutions companies available to solve any issues of blockchain technology now. But, at first, any organization needs to know how this chain works. The blockchain mainly consists of three essential concepts: blocks, miners, and nodes. So, let's discuss these three concepts below:
Each chain consists of several blocks with three essential elements.
- The data
- A 32-bit whole number is called a nonce. The nonce is generated automatically when a block is created, causing the block header hash.
- The hash is again a 256-bit number that is wedded to the nonce. It has to start with many zeroes (which means extremely small).
A nonce will generate the cryptographic hash when the first block is created. Then the data in the block will be considered signed and forever tied to the hash and nonce unless it is minded.
Miners create new blocks via the mining process. Every block in a blockchain has its hash and nonce but also references the previous block's hash in the blockchain. So, mining is not easy at all. Miners generally use special software to find a nonce to generate an accepted hash. If they see it, their block will be added to the chain. After that, when the block is minded successfully, and the change is accepted by all of the nodes on the network, the miner will be rewarded financially.
Decentralization is the most critical concept in blockchain technology. No one can own this chain; it is a distributed ledger connected to the chain through these nodes. It is an electronic device that generally maintains blockchain copies and helps the network to keep functioning. As blockchains are trusted and transparent, every action in the ledger can be checked and viewed easily. A unique alphanumeric identification number is given to the participants, which shows their transactions. So, it helps to maintain integrity and trust among users.
Blockchain is secure and is a distributed electronic ledger that can connect several parties in a single network. The network it provides is full of integrity and trust. For this reason, many sectors have adopted this technology. For example, 69% of banks currently use this technology instead of other technologies.
Reasons For Using Blockchain Technology
Several blockchain technology companies are there in the market to boost the growth of blockchain technology. As per the statistics, the global spending on blockchain solutions in 2018 was around $2.1 billion. There are lots of reasons to use this technology for business. Some of them are:
- As it is a trustable technology, your business process will be protected using high-level security.
- If you work with the best blockchain company, your business will receive fewer hacking threats.
- As it is a decentralized digital platform, you don't have to pay for intermediaries' services or centralized entities.
- Using this blockchain technology, any business organization or company can do a much better and faster transaction.
- The account reconciliation can be automatic.
- As the transactions can be done transparently, it is simple to track everything.
- Top blockchain enterprise companies provide enterprise technology that enables organizations to use many different levels of accessibility.
It is tough to imagine the modern sectors without secured online transactions. So, many sectors are now boosting their growth using this trustworthy technology. But, apart from these sectors, you can use them in small businesses such as gyms, restaurants, collision centers, bakeries, salons, etc.
Top 5 Benefits Of Using Blockchain Technology
If someone is working in the industry, they should know about the benefits of using the technology. Almost all sectors can be benefitted from this technology. Among all the sectors, the primary six industries, including Energy, Logistics, Health, Real Estate, Government, and Finance, can get significant benefits if they are correctly used.
There are already so many organizations working with blockchain solution companies after realizing the actual benefit of this technology. As per the statistics, the potential annual savings for banks after using blockchain technology is $8- $12 Billion. The growth of this industry has now become exponentially vast and rapid. This technology can be used for different purposes in multiple industries and businesses. So, let's discuss some of the benefits below:
1. Better Transparency
Transparency is a significant issue in this current industry. All the organizations have already tried to implement several rules and regulations, but the one thing that does not make it fully transparent is centralization.
But, now, after using this technology, this problem has been removed as it is a decentralized network. So, it helps to improve the company's transparency. Because of this technology, many sectors, especially government sectors, are using this technology to increase transparency. They are using it in building government processes and even conducting votes.
2. Increased The Level Of Security
Blockchain technology generally uses advanced security compared to other digital platforms. Here, each transaction is encrypted, and it has the proper link to the old transaction using the hashing method.
As each blockchain node holds a copy of an older transaction on the network, the security will be automatically enhanced. So, if anyone wants to make changes other than the user, other nodes will reject his request to write the transactions to the network.
3. Low Cost
All types of organizations spend a considerable amount of money to increase the technology of their systems. So, now, they want to reduce the cost to divert the funds to build something new. So, with the help of a blockchain development company, they finally bring down the cost associated with the third-party vendors. As it is a decentralized technology, you don't have to pay anything to any vendors. Moreover, less interaction is needed to validate any transaction, and you don't have to spend any time or money to do basic stuff.
4. True Traceability
With the help of blockchain technology, companies can create a supply chain that will work for both the vendors and suppliers. It is challenging to trace items in a traditional supply chain as full transparency is not there. For that reason, it can lead to several issues, such as loss of goods, theft, and counterfeiting.
But the blockchain technology provides 100% transparency in the supply chain. It enables access to every party to check and ensure that any of their items are not being misused or misplaced during this supply chain process. If needed, any business company can also make the most out of this blockchain traceability by implementing it.
5. Highly Efficient and Increased Speed
The last benefit of the technology to the industries is a high speed and improved efficiency. Blockchain mainly helps solve the time-consuming process so that it automatically maximizes efficiency. It also helps to eradicate human errors with the help of the automation technique.
The digital ledger provides a single place where anyone can store their transactions. Moreover, the automation process and streamlining makes everything become fast and highly efficient. Furthermore, this makes it easy for everyone to trust each other as it is a decentralized network. This network generally utilizes a unique way of data storage to give a highly efficient process with transparency, immutability, and trust.
Blockchain technology is the revolutionary technology of this modern era having a significant impact on every industry sector. So, it is undoubtedly substantial for our business industry. Each of these benefits is like the grain of sand to make your business or company bigger.
Also, it made life simpler, easier, and safer by changing how personal information is stored and how well goods or items are transacted. So, it should be used to develop the growth of many sectors, including Healthcare, Manufacturing, Retail, Real Estate, etc. To know more about this trendy technology connect with our team of experts and get free consultation.