Have you ever wondered why blockchain is important? Or maybe you have asked how it is going to impact our daily life or the lives of different professionals working in different sectors. Blockchain is now very popular among the general audience. Its popularity started with the rise of bitcoin prices. However, right now, its popularity, according to Google, is now settling down. A blockchain is a ledger-based peer-to-peer network where each peer has a ledger copy. This drives the decentralized idea into the minds of the
At the core, you can find the blockchain importance by going through its key features. These features make blockchain irresistible in diverse scenarios and mark itself as the best possible solution.
Blockchain is immutable. This opens a lot of opportunities for platforms that need immutable traits to make their system more functional in a highly competitive market. Take the supply chain, for example. Immutability enables companies to ensure that there is no hamper done to the packages in transit. As blockchain is immutable, it is not possible to alter the package information in any way. Any alteration will alarm the system.
Another crucial aspect that makes blockchain so important is transparency. There are different types of blockchain. Public blockchain provides transparency due to its nature. It is very useful for different functions of our society, including doing elections. Companies can also utilize it to ensure that the end-user can interact with the processes with full or partial transparency.
As a human being, one of your rights is freedom. There are centralized entities that offer connectivity in terms of economy but also takes away our freedom. Take your bank, for example. It can block your transactions or confiscate your account if deemed right. There are banks that do so — even when the account holders have not done anything wrong. So, if you are taking blockchain into account, you will find there is no centralized authority.
Decentralized services are the backbone of our futuristic society. Be it asset management or energy management; there will be decentralized services for every sector out there. This will give people unprecedented access to the options that are currently not available in the market. Almost every sector will have decentralized services.
Blockchain is not confined to just one particular use-case. This makes blockchain excellent technology for the future of our society. It can be used in almost every sector, including trade finance, bank, government, education, healthcare, oil, and so on. These use-cases also have a huge impact.
Blockchain uses cryptography to add a layer of security to the data stored on the network. The decentralization feature, on top of the cryptography, makes blockchain provide better security than other systems. Cryptography utilized complex mathematical algorithms that are used to secure the data and systems on the blockchain network.
Blockchain is inexpensive when compared to other technologies. The removal of centralized authority removes the buffer required to run the network optimally. With no centralization, there is no need to pay a middleman, improving cost efficiency. In the supply chain, using blockchain means less paperwork. The paperwork itself costs a lot. There are other costs associated, including hiring people to do the paperwork and maintain the intermediaries.
Lastly, improved efficiency is another answer to why blockchain is important. The cause is better security, intermediary removal, and overall better processes. Transactions also take seconds rather than a week to complete, especially international transactions.
Now that we understand the important from a general point of view. Let’s try to understand it from a business perspective. For the most part, it is the business that benefits from blockchain the most. Blockchain is not easy to implement for normal users. It needs to be managed by a team of experts, which makes it ideal for businesses who have the budget and appetite to manage the blockchain project.
The global blockchain market improvement to $20+ billion in 2023 is another sign of how rapidly businesses are adopting blockchain.
So, what makes blockchain so lucrative to business? First of all, it reduces operational costs. The removal of intermediaries is a boon for business as it not only reduces cost but also reduces the point of contact — improving efficiency and growth.
Transactions speeds are also improved to a new height. For business, it is all about efficiency if they can keep their accuracy intact. The use-cases are also in favor of business. Some companies have already shown their interest in blockchain. The Dubai Blockchain Strategy is one example where the government wants to change its city with the help of blockchain. They want it to become the first city that will be powered by blockchain. They are aiming at 2020 to make it happen.
However, businesses know that blockchain maturity is a big concern. Blockchain is favorably new technology when compared to other technologies. It is also suffering from big challenges, including scalability and widespread adoption.
Also, blockchain might not be the answer to every industry out there. The finance sector may find blockchain very useful, but not in the art sector. But, it doesn’t mean that every sector out there doesn’t benefit from it. The key sectors that can get truly transformed by blockchain include healthcare, transportation, retail, insurance, real estate, and more!
Blockchain is a disruptive technology. But, it is also expensive to implement and manage. But, with blockchain as a service, businesses with a lower budget can also transit to the blockchain. There are popular blockchain-as-a-service(BaaS) services that are trying to solve the demand. These are the cloud-based solution, which means that businesses don’t have to worry about infrastructure or maintenance. All they have to do is pay for it like a service. Currently, there are plenty of blockchain-as-a-service providers, but the most notable ones include the following:
Now that we have understood the importance of blockchain for business. It is now time to reflect upon blockchain importance to different sectors. Let’s cover four of them below.
The banking and finance sector can be drastically improved by blockchain. Digital financial institutes have the most benefits when it comes to smart contracts. The benefits come from the digital assets, programmable money, and smart contracts. There are plenty of use-cases that can be used in the banking and finance sector. Some of them are as below: