At some time in our lives, we’ve all come across ledgers. We each get our ledgers to keep track of transactions. Therefore, there will be various complications if there are many transactions and several copies of each transaction. Blockchain solves this problem since each ‘node’ has its record of transactions, and there is no centralized entity. Another computer, laptop, or server can be used as a node. However, for it to function, ‘nodes’ must be active for the system to learn.
A distributed ledger system, or blockchain, operates without the need for a central authority. Each ‘entity’ in the network has a copy of the ledger. Each ledger is constantly updated.
Although many people on the internet may use Bitcoin and Blockchain interchangeably, they are not the same. Bitcoin is, in fact, a Blockchain-based cryptocurrency.
So, what are the advantages of the blockchain?
- Increase efficiency.
Purchasing a property is a time-consuming process. The loan approval process is lengthy. The documentation takes a long time to complete. However, the technology can cut the period shorter. In this way, one may acquire a property much more quickly. This demonstrates that the Blockchain is considerably more time effective, lowering economic costs.
In the supply chain cycle, one would not understand where a given product came from. What if we could trace it and knew exactly where our apples originated? This is something that the Blockchain system might help with.
Definitely, but not completely! However, Blockchain technology is far safer than our traditional centralized ledger.
- No central authority
The blockchain network is decentralised. There is no central controlling authority. There is no need for a hierarchical approval process because there is no central authority.
In the coming years, we will see more of its use in our daily lives. Currently, blockchain has impacted the finance, supply chain, food supply and medical industry.