What is blockchain technology? it is a digital asset that uses decentralization and cryptographic hashing to support its idea. It is also a shared ledger that created the process to allow one to track assets of a business network.
There are three critical ideas with blockchain technology which includes:
- A distribution of digital assets instead of them being copied or transferred
- Real-time access
- A transparent ledger that creates trust in the asset
It is considered to be a promising technology because it reduces risks, fraud and it’s scalable for its users, which can be a benefit when you’re talking about securing an asset.
There are three concepts with blockchain which include blocks, nodes and miners. The blocks contain data in them with 32 bits of whole numbers called nonce and hash of 256-bit numbers wedded to the nonce which starts with tons of zeros. The miners then create new blocks of chain through the process of mining. In general, mining uses special software to help solve major problems. Re-mining occurs only when changes are needed after the initial mining occurs. Nodes is another concept within blockchain, which helps maintain copies of the blockchain to keep the network functioning as it should. Nodes are also able to verify, update and trust blocks of the chain that are new to the blockchain which is an added benefit.
Bitcoin is a digital currency that depends on blockchain as a way to record and store its digital transactions. Blockchain can be used in more places than Bitcoin, since Bitcoin relies solely on blockchain to work. Blockchain allows for the sharing of a ledger that’s updated in a network using transactions that allow publishers and subscribers to be the same person.
The blockchain network has characteristics of consensus:
- Validates its transactions
- Provenance which shows where the assets come from
- Immutability prevents tampering from occurring and allows errors to be documented as well as new transactions
- Allows one to go to one place to find ownership of an asset or completed transaction.
There are a number of benefits to blockchain in businesses which consist of them saving time by making transactions faster and cutting time down for more complex transactions. Cost-saving is a benefit for blockchain because it reduces expenses, it has less oversight and there are no duplication’s created. Tighter security is a benefit because it protects against tampering, fraud and cybercrime by only allowing members access to the network. It is enhanced in security because it uses ID’s and permissions to work. It is improved in auditability because it has the ability to monitor and audit transactions and it is increased in operational efficiency because it allows for speedier transactions when doing business. This could all be beneficial to any business using blockchain, which puts them at an advantage.
There are some limitations to using blockchain that will lead to more advances over time. Some disadvantages include: imperfect information, inaccessible information and information risks. Imperfect information consists of information being incorrect due to a delay of some sort which can in turn lead to bad decision-making. Inaccessible information consists constrained by technical challenges of storing, processing, sharing and analyzing information. Information risks consists of hacking to cybercrime events and privacy concerns to identity theft all in which could eventually lead to increase cost and a bad reputation.
There are a ton of benefits based on the certain areas which includes areas such as trusted digital identity, policy management, government, supply chain and healthcare.
- Trusted digital identity benefits include: user access being faster with customers, reduces frauds and centralized honeypots of data and triple-blinded transactions to preserve privacy.
- Policy management benefits include: new levels of trust and transparency, more efficient delivery with multinational insurance, improved contract certainty, regulatory compliance and country-specific alignment.
- Government benefits include: reduce cost and time in identity verification, transparency in grant allocation and reduced human trafficking issues.
- Global Trade benefits include: faster, secure access to end-to-end supply chain information, verifiable authenticity and immutability of digital documents, being trusted across organization workflows, better risk assessments and fewer unnecessary interventions, less administrative expenses and the elimination of physical paper across international borders.
- Healthcare benefits include: tampering resistant, reduced time with insurance claims and increase in providing insurance quotes, more precise drug recommendations, systems being able to suggest alternative services with better coverage, and claims being reviewed and paid more efficiently and quickly.
Overall, the benefits are astronomical when it comes to blockchain being used with various sources. Since, blockchain is still new it still has room to grow but so far it has proven itself to being beneficial in the real world.
Blockchain in cybersecurity is an overall benefit for business to help decentralize storage solutions, IoT security, safer DNS and implementing security in private messaging. When it comes to decentralized storage solutions, one is able to archive data on the blockchain and grant permission for 3rd party access. With IoT security, blockchain gives IoT the “smarts” to make better security decisions. With Safer DNS, blockchain is able to make jobs difficult for hackers to find and exploit vulnerabilities and with implementing security in private messaging, blockchain allows for more secure communication between various applications.