This Technology Can Change The Dynamics of Your Business
Blockchain is a very popular concept these days. With cryptocurrencies like Bitcoin making the headlines since 2017, Blockchain has gained massive popularity today as it is a technology that powers these digital currencies. As the name suggests, Blockchain is a chain of blocks than contains within itself information. This technology can transform the dynamics of any business.
This technology however is not new but was in fact described in the year 1991 by a group of researchers who suggested its main use to be able to timestamp digital documents so as to reduce the possibility of tampering with them. It is a distributed ledger that is open to everyone.
It is very useful as it prevents tampering with digital documents by backdating them as data once entered into a blockchain is very difficult to change. Although it was a great technology, it mostly went unused until its utilization was made in 2009 by the creator of Bitcoin.
How can it change the dynamics of your business?
- A blockchain helps simplify the way transactions are made today. The user of a blockchain can change the entries in the ledger in a secure way without the help of a third party. It thus reduces the need for intermediaries.
- It provides maximum security in transactions. This is achieved because of what is called hashing. Every block in the blockchain contains a hash which is like a security mark, and every following block contains the information of the previous hash which is the security mark of the previous block. If the data in one block changes, it also changes the hash on that block, this would lead to a mismatch of the hash on the tampered block and the previous hash on the next block indicating that a block has been tampered with. This makes it difficult for third parties to make changes and go unnoticed.
- All participants of the blockchain can view any changes made. In a blockchain, there are various different participants, therefore any changes made can be viewed by all the participants therefore it gets difficult to get away with tampering because all actions are exposed to all participants.
- A blockchain is a digital mechanism, thereby reducing manual tasks by making transactions automated. It reduces manual labor and stores everything digitally.
- A blockchain is capable of storing the entire business history of an asset digitally, reducing the need for paperwork and avoiding loosing important documents regarding the ownership of an asset. It can effectively store its entire history of it.
Also, read – 10 Big Bitcoin’s Economic Impact on the World
Though the technology seems to be complicated, the idea behind the blockchain is simple, to reduce document tampering by activities such as backdating. For businesses especially, it proves useful by making business transactions simpler by removing the need for banks and credit/debit card companies in their transaction processes. Removing these third parties and taking control of financial transactions takes the digital market to a whole other level and change the dynamics of the consumer-company relationship.
We will surely see more blockchain-based business applications in 2022.