In the technological era, businesses must secure the assets of their clients from cybercriminals. If hackers get access to sensitive data, customers can lose billions of dollars and risk a stained market reputation. Blockchain technology is a digital ledger that supports secure transactions and monitoring of assets (patents, cars) in a decentralised network.
As per recent statistics, the financial worth of the global blockchain market was around $1.6 billion in 2018. The Forecast shows that it will reach approximately $163 billion by the year 2027. The use of blockchain technology reduces risk and minimises the cost for all entities in the network.
Blockchain Technology: What are the Different Types of Networks?
A private blockchain network is suitable for independent businesses and institutions. This system allows organisations to regulate permissions, availability of the network, and various other security measures. There is only one authority that is responsible for managing the whole network.
It is a type of blockchain network that anybody can join and leave at any time. For instance, a Bitcoin system. Such types of structures do not require a special invitation but they are still decentralised. Every entity in the network has equal access and the authority to generate new data blocks. The users must solve special equations to “mine”. The parties receive some cryptocurrencies in exchange for their effort.
Hybrid blockchain networks are also known as permissioned structures. It is a combination of both systems that presents a better opportunity for end-users to benefit from the technology. Clients can easily send invitations to parties who should be part of the transaction and business network.
These kinds of networks are controlled by a combination of institutions rather than one organisation. The networks in this type of structure are more decentralised than the private ones which guarantee more security levels. But consortium blockchain networks are more difficult to establish because it requires strong synergy among participating institutions. Consequently, the responsibility is also greater in consortium blockchain structures.
Blockchain Technology: What is Decentralisation, Immutability and Transparency?
Some special characteristics of blockchain technology are below.
- The security protocols provided by traditional financial structures are very different. It is a decentralised structure that ensures security through nodes of the network. The replication of the ledger happens on all nodal points of the system. For a transaction to take place or be valid, it must be approved by 50% of the parties involved. No one in the blockchain network can modify the information on the blocks unless the majority agrees
- The decentralised nature of technology puts responsibility on all parties involved in network rather than a centralised structure. This is a crucial feature because clients can access information through the web and secure their assets conveniently
- Blockchain technology is faster and more resource-effective than traditional financial systems. Such characteristics motivate businesses to adopt technology and ensure positive experiences for consumers all over the world
- A consensus algorithm at the core of blockchain technology ensures a win-win situation for all parties in the business network. In this way, algorithm ensures better security of the system. The consensus algorithm is a decision-making process that streamlines all the transactions in the structure even if there are millions of nodes
What are the Differences between Blockchain Technology and Bitcoin?
In the year 2009, when Bitcoin was launched, blockchain technology found its real-world use. When it comes to differences, Bitcoin uses blockchain technology for transparent payment transactions. It means that blockchain structure is a medium for payment exchange rather than currency. Bitcoin is an example of a cryptocurrency out of several ones. Consequently, blockchain technology is something bigger than Bitcoin.
Blockchain Technology: What are the Applications in Modern Industries?
There are several industrial applications of blockchain. Blockchain technology can be used to:
- Audit the quality of seafood until it reaches the buyers to ensure quality. Industries have adopted this approach to ensure compliance with FDA standards
- Improve security around digital currencies and facilitate financial industries. The enhanced security protocols assign every cryptocurrency its own identifiable number
- Revolutionise patient care in the healthcare sector through better research and cost-efficient treatments. Moreover, medical professionals can transfer patient data securely in the network and ensure an efficient supply of medicine
- Transform the food supply chain by combining blockchain technology with AI and IoT. Blockchain technology can help transfer data gathered through the Internet of Things. For instance, temperature and humidity levels at the time of storing food items
- Boost sustainable development in the gas and oil industry. It can stabilise the sector by complying with global regulations. It can facilitate proper waste management and ensure a safe environment for workers
In a nutshell, applications of blockchain technology are transforming the whole world. Investors want to use it for securing their investments and industries aim to make their business operations effective, safe, and cost-effective. The decentralised nature of blockchain technology shares responsibility with all parties involved in a business network rather than any external authority. The focus of bitcoin is confidentiality but emphasis of blockchain is transparency. The applications of technology will increase over time because it offers better trust, security and efficiency levels for the end-users.