What is Blockchain?
A blockchain is a public ledger of information collected through a network that sits on top of the internet. It is how this information is recorded that gives blockchain its groundbreaking potential.
The blockchain technology has been getting a lot of attention lately for its industry-disrupting capabilities. As a result, many industries are falling over themselves to try and incorporate the blockchain.
How does blockchain work?
The Blockchain is a technology based on the virtual digitized decentralized network with “blocks” of information. When you add any information in the network (e. g. transaction), you add it in all computers in the network. But if another user in this network adds his information and make a new block after yours, you can’t modify your block. However, you can edit your block if you make it editing from all computers in the network and make similar changes in one moment only. It makes Blockchain one of the best technology for saving and structure information.
- Blockchain will keep score of all types of data exchanges. This is called a ledger system, and the data exchanges are called ‘transactions.’ After verification, every transaction gets to add up to the ledger as a block.
- It uses a different kind of distributed network to ensure that every transaction is on the point between P2P nodes.
- After a block gets added and verified, no one can alter its information.
Amplified blockchain adoption to enhance cybersecurity
Blockchain has three pillar aspects: Trust, security, and accessibility of data to only those authenticated to access it. It offers an affordable and secure option for organizations of all types. Just like blockchain is disrupting the financial and insurance sectors, it has the potential to disrupt the cyber-security space. It brings new approaches to protection and cost management. There are already new cyber-security solutions that are leveraging blockchain.
Here are four ways through which blockchain is making cyber-security cheaper and safer.
- Mitigating attacks
- Enterprise Asset Protection
- Digital Identity and authentication
Benefits of blockchain technology
Here are the most important benefits of blockchain that may prove to be useful to businesses in different industries:
- Greater transparency
- Enhanced security
- Improved traceability
- Increased efficiency and speed
- Reduced costs
1. Greater Transparency
Transaction histories are becoming more transparent through the use of blockchain technology. Because blockchain is a type of distributed ledger, all network participants share the same documentation as opposed to individual copies. That shared version can only be updated through consensus, which means everyone must agree on it. To change a single transaction record would require the alteration of all subsequent records and the collusion of the entire network. Thus, data on a blockchain is more accurate, consistent and transparent than when it is pushed through paper-heavy processes. It is also available to all participants who have permission access. To change a single transaction record would require the alteration of all subsequent records and the collusion of the entire network. Which can be, you know, a headache.
2. Enhanced Security
There are several ways blockchain is more secure than other record-keeping systems. Transactions must be agreed upon before they are recorded. After a transaction is approved, it is encrypted and linked to the previous transaction. This, along with the fact that information is stored across a network of computers instead of on a single server, makes it very difficult for hackers to compromise the transaction data. In any industry where protecting sensitive data is crucial — financial services, government, healthcare — blockchain has an opportunity to really change how critical information is shared by helping to prevent fraud and unauthorized activity.
3. Improved Traceability
When exchanges of goods are recorded on a blockchain, you end up with an audit trail that shows where an asset came from and every stop it made on its journey. This historical transaction data can help to verify the authenticity of assets and prevent fraud.
4. Increase Efficiency and Speed
When you use traditional, paper-heavy processes, trading anything is a time-consuming process that is prone to human error and often requires third-party mediation. By streamlining and automating these processes with blockchain, transactions can be completed faster and more efficiently. Since record-keeping is performed using a single digital ledger that is shared among participants, you don’t have to reconcile multiple ledgers and you end up with less clutter.
5. Reduced Cost
For most businesses, reducing costs is a priority. With blockchain, you don’t need as many third parties or middlemen to make guarantees because it doesn’t matter if you can trust your trading partner. Instead, you just have to trust the data on the blockchain. You also won’t have to review so much documentation to complete a trade because everyone will have permission access to a single, immutable version.