Blockchain Technology Explained | Benefits of Blockchain Technology

Blockchain technology underscores much of what we do as modern internet users, and yet, most people don’t understand what it is or how it works. Many are vaguely aware of it due to the fluctuations of the cryptocurrency market. Still, few realize the expanded role it now plays in everyday internet interactions that have nothing to do with Bitcoin.

However, it’s important to get in the know, as blockchain’s influence will continue to increase with everything from banking to supply chain transparency and even voting. New security concerns may accompany these applications, increasing the need for vigilance at all levels.

Keep reading to learn more about blockchain’s past, present, and exciting future.

What Is Blockchain Technology? How Does it Work?

The modern blockchain consists of a digital ledger, which duplicates a variety of transactions before distributing these records across vast computer networks. Each block within a chain features a cryptographic hash related to the previous block, as well as a timestamp and detailed information about the transaction in question. This data is difficult to modify, making blockchain one of the most secure digital solutions currently available.

This record-keeping technology has long been associated with cryptocurrency, and for good reason: It was originally invented by Satoshi Nakamoto with the intention of resolving a double-spending problem in which Bitcoin enthusiasts could use the same digital tokens on multiple occasions. Today, however, blockchain is used not only for various cryptocurrency systems but also for maintaining other ledgers on a digital and public basis.

Managed by a huge peer-to-peer network, today’s blockchain infrastructure relies on mass collaboration. This system rests on the assumption that it’s in everyone’s best interest to maintain not only blockchain’s actual security but also its perceived security to facilitate widespread confidence and adoption.

What Have We Learned from Blockchain Technology So Far?

Blockchain has come a long way in just over a decade. While the general concept remains largely the same as when the technology was first developed, its applications are far more extensive than early adopters could have predicted.

Enthusiasts have discovered that, with small adaptations, blockchain can deliver streamlined, accurate recordkeeping for a variety of functions. Top benefits of blockchain technology include:

Security – As mentioned previously, blockchain’s unique cryptographic structure makes it less susceptible to many of the issues that tend to strike other digital systems.
Versatility – Beyond cryptocurrency, blockchain can be used for a variety of applications and in almost any industry imaginable.
Transparency – In many fields, the ability to maintain transparent records of transactions is crucial. This is easy to accomplish with blockchain, as transparency is built into the technology’s very structure.
Efficiency – Blockchain solutions streamline systems, allowing for greater efficiency when conducting a variety of transactions. The public nature of blockchain reduces the clutter needed for traditional systems involving multiple ledgers.

While blockchain’s advantages are readily apparent, it has a few downsides worth considering. For example, while it is far more secure than many ledger systems, it can still be vulnerable. Many hackers have discovered weak links that make it possible to trick nodes or even flood systems with traffic via distributed denial of service (DDoS) attacks.

The 51 percent attack on popular cryptocurrency Ethereum provided an alarming demonstration of blockchain’s weaknesses. During this breach, hackers managed to reorganize thousands of blocks. Similar attacks have also allowed malicious parties to rewrite chain history. Some cases have even prompted the very double-spending issues that blockchain was supposed to prevent in the first place.

As malicious parties gain a greater grasp of blockchain technology, increased security protocol will become necessary to ensure that the benefits of this system remain accessible.

How Will Blockchain Be Used in the Future?

Blockchain may be in its infancy, but it’s quickly gaining traction beyond the world of cryptocurrency. Already, it plays a crucial role in several digital conveniences that we take for granted. Soon, it will be nearly ubiquitous in the cybersphere.

The following are among the most exciting applications that are already beginning to take over:

Healthcare – Data security has long been a huge concern in the healthcare industry. While the Health Insurance Portability and Accountability Act (HIPAA) has provided some degree of protection for over two decades, blockchain may further safeguard sensitive patient data while reducing the potential for devastating cyberattacks. Additionally, many health insurance providers are looking to blockchain as a potential solution for improving directory providers to reduce costly errors.
Supply Chain – Transparent supply chains are more secure, eco-friendly, and cost-effective. Blockchain can facilitate this transparency by ensuring that details regarding price, certification, and location are recorded and updated accurately. This may increase compliance and prevent losses from counterfeiting.
Voting – Election security should not be taken for granted. Voters increasingly fear that their voices will not be heard due to outside influence. However, many blockchain enthusiasts believe that advanced ledger technology could increase voter turnout without compromising electoral integrity.

NerdsToGo: Your Source for All Things Cybersecurity

Whether you currently take advantage of the blockchain or anticipate using it in the future, you can count on the experts from NerdsToGo to help you make the most of this and other exciting technology solutions. 