Every day, a new article or podcast about blockchain and its recent breakthroughs appears in the media. When we say blockchain, bitcoin also comes to mind that is why there are articles that tackle it aside from blockchain, for example, the things to know when to sell bitcoin. Blockchain’s key features are openness, transparency, decentralization, immutability, etc. These are essential benefits that companies will surely enjoy more and more as time goes on.
What is blockchain?
The term “blockchain” is often used interchangeably with “distributed ledger technology”, or DLT, which refers to the underlying system that makes blockchain possible. All participants (“nodes”) have access to a shared history of transactions or accounts within the blockchain. These transactions are not necessarily limited to money transfers or financial instruments but can also include things like birth certificates and medical records. No one can change the data unless all parties agree (consensus).
Key Features of blockchain:
It relies on a network of nodes that record and share details of every transaction made. It allows everyone to view the transaction history, or ledger, thus providing you with complete transparency.
Transparency is essential in the blockchain as it removes any room for doubt or deception. The nature of a highly transparent system means that every single transaction will be instantly validated and authorized by every network member. As a result, it can change how businesses operate for the better, with no possibility of fraud or leakage of confidential data.
2 . Decentralization:
As blockchain technology is still relatively new and unregulated, it’s essential for those who consider using it to understand the decentralization concept fully. It is a peer-to-peer system, meaning no central authority or server exists.
Decentralizing data means that the system cannot be tampered with by any single person or group. Therefore, blockchain technology is much more secure than other storage options.
3 . Immutability:
Blockchains contain and verify data validity to such an extent that the information will be unalterable. In addition, the technology is so secure that it eliminates the possibility of falsification, meaning any changes to records or data would show up instantly. Finally, it makes blockchain a very reliable technology as there are no chances of data loss or corruption.
It’s also impossible to reverse or change transactions without the agreement of every participant on the network. It provides a degree of independence and security and an element of trust between all participants in the system. These features provide a unique advantage over existing systems in processing contracts and managing buying and selling processes in supply chains.
Blockchain is distributed, meaning the nodes are spread across multiple computers, creating a network where everyone can access the same information. It means that a data verification system is decentralized across all participants and can be used by companies in various ways.
Blockchain technology is open source, which makes it an incredibly powerful tool for businesses looking to cut costs and improve efficiency. It is affordable for businesses to switch to blockchain technology to improve their supply chain management systems and reduce costs further down the line.
6 . Interoperability:
Interoperability refers to the ability of different parties or organizations to communicate easily with each other through a common database or database system. It’s an essential aspect of any system and enables companies to send and receive real-time information about their business. Smart contracts can have a use case to send orders or payments between buyers and sellers on the network, for example.
There is no need for manual data entry in a blockchain system as smart contracts allow business process execution without delay. As with most computer systems, this makes it very simple to record transactions with minimal human intervention.
7. Faster Settlement:
The speed of transactions is one of the most important attributes of blockchain due to the time-sensitive nature of many business transactions. For example, businesses must settle contracts, sell products, and pay their staff on a timely basis, and blockchain technology ensures that this process will be as fast as possible.
For businesses involved in cross-border and international transactions, a solution that can facilitate these would be incredibly helpful as they may not have immediate access to money or other forms of payment. It makes it very convenient for companies to use blockchain technology when settling international trade within their supply chain management systems. The cost savings that blockchain technology offers are enormous.