The emergence of bitcoin and other cryptocurrencies has become a catalyst for interest in the structure of special data chains – the blockchain. The technology has gained a second wind and continues to develop rapidly now. Of course, blockchains have not only positive features. Shortcomings are also characteristic of similar structures. But today, the advantages of blockchains are more interesting, both in general perception and with specific subjective approaches. They will be discussed further.
A concrete example is decentralization. Closed structures are already being formed. Additionally, it is possible to create a group uniting more than 50% of users, which will allow them to change the rules within the system.
Subjective opinions on the benefits of blockchain
A useful approach to highlighting winning positions from the use of such block structures is to analyze specific points of view. This technique allows not only to generalize the beneficial aspects of the blockchain, but also to identify differences in views on the nationality of specialists and other criteria.
The three advantages of exploiting the blockchain are:
• transaction simplification;
• protection of property rights;
• leveling state intervention.
The immutability of the blockchain is due to the formation of the structure. Modification of any data already entered requires the consent of all participants. This creates confidence in the blockchain, where even the opinion of the individual is protected from the positions of the “vast majority”. Alternatively, trust in the blockchain is related to the structure of the chain. Decentralization excludes the influence of a group of actors on the development and maintenance of the structure. Take advantage of this technology for your business by contacting blockchain development companies to hire blockchain developers.
The economic benefits are caused by two factors:
• elimination of intermediaries – only participants in the chain contribute to the development of the blockchain;
• simplification of the audit – verification is carried out by any user.
This tandem reduces transaction processing costs and also reduces the risks associated with them.
Decentralization as the main motivation
Adherents of this creed are right. Indeed, the vertical construction of the control system has several disadvantages:
• Vulnerability of the central organ. It is enough to carry out attacks on the main control vertical. On the contrary, a decentralized system significantly reduces the consequences of attackers.
• Economic inefficiency. Scaling up leads to increased workloads and requires higher financial costs for infrastructure. In blockchain technology, a large-scale “control center” is absent.
Operations in a decentralized structure are carried out by the participants themselves. The absence of intermediaries increases the processing speed and reduces the overall cost of ensuring the operability of the entire system.
The second positive aspect is the lack of an administrator. In blockchain technology, each participant partially plays this role. Users independently control the correctness of implemented transactions. The financial reward for this accrues an impartial mathematical algorithm.
How effective is blockchain protection?
The vulnerability of the financial system is an urgent issue of our time. For the blockchain (most implementations), the situation is complicated by open source. This factor of “economic democracy” allows you to view transactions of an unlimited audience of users. Moreover, the transparency of the structure combines operations with payments: sending, receiving in a single environment. They are easy to track, but not identify. In this way, confidentiality is achieved.
Security is ensured by the immutability of the blockchain. Any change in structure, the appearance of new blocks requires mandatory verification and confirmation by the participants of the system. Monitoring is carried out using digital signatures with cryptographic protection. It is pointless to attack the database, since the stored information is distributed among all participants in the blockchain. Firstly, it is time consuming. Secondly, attack attempts are identified at the initial stage and affect only a small part of the database. Moreover, attempts to modify information content will require mandatory confirmation by other participants.
Blockchain technology should not be taken as a panacea. At the same time, the advantages of the system are obvious. Only for transactions can the following positive aspects be highlighted:
• instant clearing;
• security with decentralized acknowledgment;
The economic benefits are no less obvious: the speed of transactions increases with a simultaneous drop in their value. Inside the structure, you can encode any document, contract, asset. This reduces the risks of fraud. Naturally, with the further popularization of the blockchain, vulnerabilities of this structure will also appear. But now the system provides the best level of security and privacy.You can hire blockchain developers by meeting with top software companies.