When and Why to Use Blockchain Technology?

• Toshendra Kumar Sharma
• November 02, 2018

Whenever we talk about technological revolution, Blockchain has its own place. It’s one technology which over the last decade has drastically transformed myriads of industries. Starting off as the underlying technology for Bitcoin, blockchain soon outgrew its traditional usage and found applications in different verticals. Some of the prominent industries which are exploring the Blockchain application include names like IBM, Microsoft, Infosys, Wallmart, etc. These companies are trying to find the various usage of Blockchain like in digital identities, tracking of shipments, tracing, financial transactions, etc. The sole objective of this is to create a transparent system that can help everyone.

Why there is a need for this technology?

Well, the current system or technology that we are working upon is not entirely transparent. Moreover, we have to depend on a third party for approval and validation consumes a lot of time. Additionally, the processing fees charged by these companies is an added burden. Blockchain comes as a solution to all this. It aids peer-to-peer transaction and is free from third party interference thus making it easy for everyone in the system to trade and interact with each other.

The surge of any new technology is because of gaps or drawbacks in the current one. The reason many companies are exploring Blockchain as a probable alternative is the current technology on which we are working has many disadvantages. Here are a few of them :

• Data Security:

  The current system is centralized. It means that there is a central repository of all the information which indicates the hackers can easily attack a central location and tamper all the data. This is the reason that we have been hearing a lot about data tampering, data alteration, and hacking of data.

• Time-Consuming–

  You would agree to the fact that the current technology that we are using is highly time-consuming. A lot of time goes in paperwork, authorization, authentication, validation, and approval, thus affecting the seamless functioning of the business process

• High Processing Fees–

  The current technology that we are using is based on third-party interference. It means that for any payment approval you need to rely on a third. These platform charge fees regarding processing fees or transaction fees. It again becomes a bottleneck in seamless business operations. Moreover, one needs to pay a huge amount in the form of processing fees.

Well, there are other issues like tracking of transactions or data, easier data exchange, etc. which are the bottlenecks that we are currently facing. With Blockchain we expect a change in the same.

Blockchain technology’s functioning is opposite to that of the current technology that we are using. It is a completely different platform where there is no need for a third-party. The two trading parties can directly interact with each other. There various other benefits which blockchain has to offer so that we can create a transparent system.

Let us analyze why people are shifting towards blockchain?

• Smart Contracts–

  The primary reason for such an acclivitous growth in Blockchain technology is because it is simple and easy. Let me explain this in-depth taking the example of the transaction system. The conventional transactional model is great for a simple transaction. What if you want to shift focus on legislating the long-term behaviour of assets transparently? Then the current system is not very efficient. Blockchain has the provision of Smart Contracts which if used properly can become a great way to transact and release payment. These are pre-programmed contracts set on certain conditions. These conditions determine how an articular transaction unfolds. Smart Contracts finds application in different fields, from business transactions to real estate, companies are exploring different ways in which they can use smart contracts.

• Trust-worthy system–

  One of the key features of Blockchain is that it makes the entire monetary transaction a simple and easy process. With the help of this technology, companies can reduce costs and offer an opportunity for business growth and intrastate maintained at a lower cost which otherwise is not possible with the conventional system that we are using. Moreover, Blockchain processes transaction faster since it is not a centralized system. The unalterable feature of Blockchain offers its users an unprecedented level of trust in the system. Also, it allows the user to raise a query on the transaction in real-time.

• Digital Identity-

  Now, this an important aspect of Blockchain which companies like Microsoft and IBM are trying to explore. Today, there is a need for a system which can give us quick access to all the credentials and information about a person. This can not only be helpful for a single company rather, but it can also be beneficial for every sector like healthcare, education, human resource, etc. The decentralized system will offer easy access to all the information in the system to access the information from anywhere. This will not only save time but will also ensure that the data is real and unalterable.

Conclusion-

The crux of the matter is that Blockchain is the technology of the future. If we are looking forward to creating a system which is easy to access, then Blockchain a great alternative. Although we cannot guarantee that Blockchain is completely hacking-free yes when we take into consideration the current system then Blockchain is a solution that we have been looking for.