Blockchain has changed how we perceive problems. It has brought tons of benefits. In this article we will talk about the advantages of blockchain security.
Blockchain technology solves key issues like trust in a network. By changing the key parameters, trust, any organization can focus on solving the problems at hand. Global governments have also understood its importance and are keen on implementing blockchain technology. For example, Dubai Smart City 2020 is a project which aims to build a smart city with new technologies, including blockchain.
In fact, blockchain and its characteristics can provide multiple advantages to businesses — whether they’re using a public blockchain network or opting for private or permissioned blockchain-based applications. So, what are the benefits of blockchain technology?
Experts identify the following as the top advantages of blockchain security:
Top advantages of blockchain security
Blockchain creates trust between different entities where trust is either nonexistent or unproven. As a result, these entities are willing to engage in business dealings that involve transactions or data sharing that they may not have otherwise done or would have required an intermediary to do so. The enablement of trust is one blockchain’s most cited benefits. Its value is evident in early blockchain use cases that facilitated transactions among entities that didn’t have direct relationships yet still had to share data or payments. Bitcoin and cryptocurrencies in general are quintessential examples of how blockchain enables trust between participants who don’t know each other.
Blockchain really proves its value when there’s no central actor who enables trust, explained Daniel Field, head of blockchain at UST, a global provider of digital technology and services. So, in addition to enabling trust when participants lack trust because they’re unknown to each other, blockchain enables sharing of data within an ecosystem of businesses where no single entity is exclusively in charge. Supply chain is a case in point: Multiple businesses — from suppliers and transportation companies to producers, distributors and retailers — want or need information from others in that chain, yet no one is in charge of facilitating all that information sharing. Blockchain, with its decentralized nature, solves for that dilemma.
The security of blockchain-enabled systems is another leading benefit of this emerging technology. The enhanced security offered by blockchain stems from how the technology actually works: Blockchain creates an unalterable record of transactions with end-to-end encryption, which shuts out fraud and unauthorized activity. Additionally, data on the blockchain is stored across a network of computers, making it nearly impossible to hack (unlike conventional computer systems that store data together in servers). Furthermore, blockchain can address privacy concerns better than traditional computer systems by anonymizing data and requiring permissions to limit access.
Blockchain’s nature also can cut costs for organizations. It creates efficiencies in processing transactions. It also reduces manual tasks such as aggregating and amending data, as well as easing reporting and auditing processes. Experts pointed to the savings that financial institutions see when using blockchain, explaining that blockchain’s ability to streamline clearing and settlement translate directly into process cost savings. More broadly, blockchain helps businesses cut costs by eliminating middlemen — vendors and third-party providers — that have traditionally provided the processing that blockchain can do.
Blockchain’s unique characteristics can increase trust, security, and transparency and bring other benefits to businesses.
By eliminating intermediaries, as well as replacing remaining manual processes in transactions, blockchain can handle transactions significantly faster than conventional methods. In some cases, blockchain can handle a transaction in seconds or less. However, times can vary; how quickly a blockchain-based system can process transactions depends on multiple factors, such as how large each block of data is and network traffic. Still, experts have concluded that blockchain typically beats other processes and technologies in terms of speed. In one of the most prominent applications of blockchain, Walmart used the technology to trace the source of sliced mangoes in seconds — a process that had previously taken seven days.
Walmart’s use of blockchain isn’t just about speed; it’s also about the ability to trace the origin of those mangoes and other products. This allows retailers like Walmart to better manage inventory, respond to problems or questions and confirm the histories of its merchandise. If a particular farm has to recall its produce due to contamination, a retailer using blockchain can identify and remove the produce that comes from that particular farm while leaving its remaining produce for sale. According to experts, blockchain can help track the origins of a variety of items, such as medicines to confirm they’re legitimate instead of counterfeit and organic items to confirm they’re indeed organic.
Immutability simply means that transactions, once recorded on the blockchain, can’t be changed or deleted. On the blockchain, all transactions are time stamped and date-stamped, so there’s a permanent record. As such, blockchain can be used to track information over time, enabling a secure, reliable audit of information. (That’s in contrast to error-prone paper-based filing and legacy computer systems that could be corrupted or retired.) Omar pointed to Sweden’s use of blockchain to digitize real estate transactions to keep track of property titles even as they change hands as an example of this benefit’s potential.
Blockchain enables an unprecedented amount of individual control over one’s own digital data, experts said. “In a world where data is a very valuable commodity, the technology inherently protects the data that belongs to you while allowing you to control it,” said Michela Menting, a research director at ABI Research. Individuals and individual organizations can decide what pieces of their digital data they want to share and with whom and for how long, with limits enforced by blockchain-enabled smart contracts.
Tokenization is the process where the value of an asset (whether a physical or digital one) is converted into a digital token that is then recorded on and then shared via blockchain. Also, tokenization has caught on with digital art and other virtual assets, but tokenization has broader applications that could smooth business transactions, said Joe Davey, director of technology at global consulting firm West Monroe. Utilities, for example, could use tokenization to trade carbon emission allowances under carbon cap programs.
Leaders across multiple industries are exploring and implementing blockchain-based systems to solve intractable problems and improve longstanding cumbersome practices. Field cited the use of blockchain to verify the information on job applicants’ resumes as an example of such innovation. Studies consistently have shown that a strong percentage of people falsify their resumes, leaving hiring managers with the time-consuming task of manually verifying the information. But pilot programs that allow participating universities to put data about their graduates and their awarded degrees on the blockchain that can then be accessed by authorized hiring managers helps solve for both issues — getting to the truth and getting to the truth quickly and efficiently.
Advantages of Blockchain Technology
There are many advantages of blockchain security compared to other traditional technologies.
- With blockchain, your business process will be better protected with the help of a high level of security
- The hacking threats against your business will also be reduced to a greater extent.
- As blockchain offers a decentralized platform, there is no need to pay for centralized entities or intermediaries’ services.
- Enterprise blockchain technology enables organizations to use different levels of accessibility.
- Organizations can do faster transactions with the help of blockchain.
- Account reconciliation can be automated.
- The transactions done are transparent and hence, easy to track.
Now, with the impact of industries clear, it is now time to go through the list of sectors that are taking advantage of blockchain technology. Let’s get started.
Top advantages of blockchain security: Which Industry Can Benefit from Blockchain?
Almost all the sectors out there can benefit from the blockchain. Out of all the sectors out there, the four sectors that we think benefit the most include Energy, Real Estate, Logistics, Healthcare, Finance, and Government.
There are already many companies using advantages of blockchain security actively after realizing the potential of this tech. To get a glimpse of exactly how different industries are taking benefits of blockchain, let’s briefly go through each one of them.
Benefits of Blockchain in Energy Sector
Energy distribution, allocation, and production have always been an important sector for governments out there. Without proper energy management, it becomes hard for any government to provide valuable growth to its economy. Private players also play a crucial role and can benefit from the blockchain. Below are the benefits that the energy sector receives with the use of advantages of blockchain security.
- Environmental Sustainability: Blockchain helps make the energy sector more environmentally sustainable. It helps overcome legacy energy sector efficiency issues and provides a network where it is possible to produce, store, and distribute energy more efficiently.
- Reduced Costs: The costs associated that reduced when it comes to infrastructure and operational aspects of the energy sector.
- Improved Transparency: The use of a distributed ledgers improves transparency.
Benefits of Blockchain in Real Estate
The real estate sector’s condition has not been so good for the past few years. That’s partly because of the ever-increasing price and how frustrating it has become to buy a property. Blockchain has brought a new fresh outlook on how the real estate sector operates. The benefits of blockchain in real estate include the following :
- Tokenization: With blockchain, it will become possible to tokenize actions. This means that properties can rent out for a certain period using pre-defined code. Tokens also make it possible to add any business logic, including the ability to protect against fraud.
- Proper Tenant and Investor Identity: Digital identities can help both investor and tenant to create digital identities that are easy to verify and work with. The KYC/AML procedures will become more streamlined with the use of proper identity management. Lastly, documentation becomes easier and more shareable.
- Property Sale: Property sales can automate with smart contracts. It enables legal agreements that are traceable and executable if a certain condition is met.
- Real-Time Accounting: With blockchain, it is possible to do real-time accounting
Benefits of Blockchain in Healthcare
Healthcare also requires a complete change if they want to be more effective in providing service to their patients. The benefits of blockchain in healthcare are countless. It does bring a lot of benefits to the table. Let’s see how blockchain for healthcare can really alter the game.
- Patient Profile Privacy: The use of a decentralized ledger means a unified patient profile. Patients do not have to carry their papers anymore as everything can store and share through a secure ledger. It will also offer patients more privacy as they hold the authority to grant permission to who can use or see the data.
- Drug Traceability: Drug traceability will also improve with blockchain. As everything tracked in real-time and in a decentralized network, there are next to impossible chances for it to hamper.
- Better Clinical Trials: Patient’s data secured and stored in a decentralized network. The public health data can use to do better clinical trials and research — improving the chances of developing drugs for different diseases.
- Electronic Health Records (EHRs): With blockchain, health organizations can easily manage electronic records.
Top advantages of blockchain security: Conclusion
This leads us to the end of advantages of blockchain security topic. Now that you know about the importance of blockchain technology, you can make educated decisions on whether you want to use this technology or not.
Blockchain is a revolutionary technology with a huge impact on every sector out there. Our focus was only on the main sectors so that you can relate and understand its advantages.
But in the end, the decision is entirely up to you. Hopefully, this guide will help you out in making the right decision for your business.
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