Knowing the benefits of blockchain for 2022 will help understand more about this digital and technological premise. Generally, it is a system that is related to the trading of cryptoassets, encompassing beyond such premise. Nowadays, it is a whole program of events that favors certain activities. The popular “blockchain” has been active since 2008 when Bitcoin began its adventures in the financial world. Thanks to this measure, the world was completely revolutionized, allowing this digital tool to be used for various purposes. Currently, it continues to be exploited and highly recommended when carrying out digital operations.
The keys to understanding exactly what Blockchain is and how much it has evolved
Literally translated into Spanish, it is known as “blockchain,” practically functioning under that concept. It is a highly reliable system for recording and encoding certain data.Initially, since its creation, it was linked to the commercialization of Bitcoin, supporting the entire structure that characterizes this digital environment. With the benefits of blockchain, users can completely decentralize the information and be the ones who mediate through the system.
Explained in another way, the coding system marks an active record of all transactions and information traffic in real time. With the help of blockchain, nothing is erased and everything is available to the public.
What are the bases of the blockchain? Is that how it works
Many people compare the benefits of blockchain to the usefulness of a ledger or accounting record. In general terms, it is a pure system of data transfer of all types through independent terminals. All this information is recorded anonymously, validated and protected without the participation of third parties or intermediaries.In the end, a basic pillar known as “consensus” is established where all the terminals handle the information, registering it as valid. In this way, they do not require more organizations or entities to regulate the procedure. Basically, the blockchain is a technological program that allows users to manage their own transactions.
For example, when paying for a certain product through processors such as PayPal, the related information is handled by this company. These data are subsequently used for marketing or company purposes, without being under the user’s control. With the benefits of blockchain, data is kept anonymously in blocks without being centralized.
And to all these, the benefits of blockchain are summarized in the following aspects
- The blockchain stores information in anonymous dynamic blocks that are not deleted. All of them act as a consensus where transactions are quickly validated without intermediaries.
- Currently it is not only applied in the concept of cryptoassets, but also in technologies such as the internet of things. In this way, it allows rapid information traffic between devices.
- Blockchain handles all types of secure transactions between users without the information being centralized. As a result, the use of banks, payment processors and more are being relegated to the past.
What are the benefits of blockchain for your company?
Blockchain technology is very important for 21st century business because it is a system with the potential to be modified in many ways to suit various business operational needs. Currently, the benefits of blockchain are being reflected in sectors such as agriculture, health, banking, education, e-commerce, property, mining, retail, transport and logistics, media , entertainment and the list goes on”
Advantages of Blockchain technology
- Ease of transaction tracking: This is one of the main benefits of blockchain as this technology makes it easy for companies to monitor their products and transactions, due to its built-in transparency properties, giving operational managers the tools for a higher level of authenticity, reliability and, most importantly, accountability.
- Transaction security: Coinbase is a major digital exchange that facilitates payment processes for its customers and has never been hacked to date due to its high level of integration with blockchain technology.
- Banks: Four years ago, world-renowned payment company Visa introduced a blockchain platform that would handle business-to-business payment services, which has helped increase their profit margins over the years.
- Reduction of operating costs: allows the elimination of unnecessary intermediaries or agents linked to maintenance into of records and the reconciliation of transactions.
- Improves credibility: It can be used for the making of digital contracts and safeguarding agreements, making it more difficult for contracts to be falsified or altered by third parties, thus improving credibility.
- Improves supply chain management: another benefit of blockchain is the simplification of companies’ supply chain management processes; Therefore, it offers a more economical method to monitor products and services without inefficiencies and guesswork.
- Unilever, a transnational consumer goods company, is currently using blockchain technology to track transactions in its supply chain, this has resulted in the reduction of its operating costs.
Disadvantages of Blockchain technology
Blockchain technology over the years has quickly made its way into many businesses and online communities. This blockchain can provide many benefits; However, like everything, there are always disadvantages. In this section we will analyze the disadvantages, so you can determine if it is the right option for your business.
Significant carbon footprint
One of the biggest disadvantages of blockchain technology is its considerable impact on the environment. Take bitcoin mining as an example; This involves the processes of solving complex mathematical problems, which consume a lot of energy. While this is not the same for all blockchain technologies, it is still an issue for many cryptocurrencies. A few years ago, cryptocurrency mining consumed as much energy as a small nation and this has not changed much in 2022.
The fluctuation of cryptocurrencies
Most cryptocurrencies that use blockchain are incredibly volatile, leading many investors to question whether these cryptocurrencies are really worth investing in. Prices fluctuate daily and some cryptocurrencies have failed over time. This can be a significant disadvantage, as many people do not want to be involved in such a risk. However, if you are interested, you can create an online bitcoin wallet account to secure your funds.
Data difficult to modify
Another disadvantage to take into account is that once data has been added to the chain, it can be very difficult to modify it and this can cause problems in the future. To modify data, the process is extensive and requires code changes. Often this involves abandoning a node and creating a new one. Taking into consideration everything written above, it is interesting to see why the benefits of blockchain are so attractive to many. However, there are some disadvantages that should also be taken into account. When making a decision, consider your business values and your overall plan. This will help you decide if it is worth investing in.
