The world has gone crazy over blockchain in the past few years. Not only because it offers solutions to technical problems certain industries are facing, but also because it has the potential to change the way businesses transact and do trade.
Still, the truth is that not every business needs blockchain technology. Anyone who wants to follow in the footsteps of those that have embraced blockchain should think if it’s the right solution for their business. Blockchain earned this reputation due to the fact that it doesn’t require a bank intermediary or other central authority. This is particularly important for international money transfers and the lending industry. Blockchain owns its appeal to two central characteristics: immutability and decentralization. Centralization is the base of traditional databases. All users are granted access to the database by an authority and any security breach may cause data theft or transaction invalidation. Unlike that in traditional databases, the authority in blockchain is distributed evenly between the nodes. After a greater number of nodes reach a general agreement, a transaction is allowed to enter the official record. Although blockchain technology is seemingly better, there is one aspect businesses mustn’t neglect. In those instances where entities may not trust each other, blockchain is not the best of solutions because everything is transparent.
The speed of blockchain transactions is another important point to keep in mind. Although it used to be free during the first few years of its existence, now a transaction costs around $0.20. Due to an increasing number of interested clients, Bitcoin can only handle around seven transactions in one second.
Not all countries welcomed crypto technology with arms wide open. In fact, the regulations on it vary from state to state so it is of pivotal importance to be familiar with them. While some states are working towards bringing harsh laws regarding the cryptocurrency regulation, others are on their way toward issuing their own cryptocurrency. Whatever the case may be, online portals like The Blockchain Review can fill you in on the latest details and everything you need to know about the news regarding the blockchain technology.
Who actually needs blockchain?
Blockchain technology is truly beneficial in so many aspects. However, there are only two types of businesses that can really reap the full benefits of blockchain. The first group comprises of those businesses which operate on notarized data exchange. This means that transactions can’t and mustn’t be changed, which is one of the focal points of blockchain. Changing the data in a blockchain is nothing short of science fiction. Theoretically, it is possible but it would require thousands of participants making a change simultaneously in order for a change to occur. With blockchain, unauthorized individuals can’t alter the records and this property is extremely useful in the land registry industry because it can prevent record manipulation and land fraud. The pharmaceutical industry is another field that can tremendously benefit from blockchain innovation. This industry demands that the entire supply chain process is closely monitored and controlled. Not only because there is room for issuing wrong prescriptions, but also because the manufacturing process is prone to errors that can result in disastrous consequences.
Benefit or necessity?
There is a big difference between businesses that are likely to see benefits from using blockchain and those that find it necessary to do so. First of all, blockchain is both useful and necessary for businesses that require permanent registration of any kind.
There are several reasons for this.
· Immutability. Just think about university registers or criminal records. This data is extremely confidential but on top of that, it is an absolute imperative that it is kept for indefinite periods of time, without the possibility of a change.
· Transparency. As we’ve already mentioned, land registry and real estate notaries find it absolutely binding to keep track of land ownership, especially in cases when there are disputes over the possession of a piece of property.
· Global market. Businesses that plan to expand globally, or already have, are likely to use blockchain. Not only because it enables easier transactions on a global scale but because it allows applications to skip banks in the process and accept payments regardless of the location.
· Automation. Blockchain has the ability to transfer assets without the approval of a third party or an intermediary.
· Decentralization. In order not to discourage consumers regarding the authenticity verification, insurance companies see blockchain as an indispensable part of their future. As a distributed ledger, blockchain grants decentralized registers allowing customers, manufacturers, and insurance companies to track a product’s history.
In case your business doesn’t fit any of these frames, then maybe blockchain is not for you after all. Before reaching any decisions, always make sure you have a full comprehension of the perks and drawbacks of using this technology.