The emergence of Bitcoin in 2009 showed the real-world use of blockchain technology. It should be that this distributed ledger technology can be made practical. It also inspired organizations to find methods to utilize this technology. Big companies, non-profit organizations, and government agencies are making use of blockchain to enhance the current processes and create new business models.
Blockchain can share data securely and quickly among various entities. Therefore, none of them has to take the responsibility of protecting the data or carrying out the transactions. The characteristics and features of blockchain offer multiple benefits to businesses. These benefits are available through a public blockchain network as well as for permission or private blockchain-based applications.
Below are the top benefits of blockchain technology.
Blockchain technology develops trust between organizations that did not have proven trust. Thus, such organizations will become willing to take part in business deals where data sharing or transactions are involved, which they cannot do otherwise or needs an intermediary in between to make it happen. Building trust is one of the most important benefits of blockchain. Cryptocurrencies, specifically bitcoins, are the major examples showing how blockchain creates trust between entities who do not know each other.
- Decentralized Model
Blockchain allows data sharing within a business ecosystem where none of the entities control the whole process. Multiple entities of a business, like transportation companies, suppliers, producers, retailers, and distributors need data from others in the chain. But none of the entities in the chain is controlling the whole data-sharing process. The decentralized nature of blockchain solves this problem.
- Improved Privacy And Security
Blockchain systems are extremely safe. Blockchain develops a transaction record that cannot be altered as they follow end-to-end encryption, which eliminates unauthorized activities and frauds. Blockchain stores all the data in a network of computers, which makes fraud and hacking impossible. Blockchains are better to provide privacy than other conventional computer systems by allowing users to stay anonymous and asking for permission to get access.
- Decreased Costs
The nature of blockchain helps organizations cut down their costs. Thus, the processing of transactions becomes more efficient. Tasks like amending and aggregating data will be reduced and reporting and auditing becomes easy. Financial institutions can save a lot of money by using blockchain. Avoiding the need for middlemen or intermediaries further cuts down costs.
Blockchains are faster in handling transactions than traditional methods. In some instances, blockchain takes only seconds to execute a transaction. However, there will be variations in the time taken for transactions. The size of the data block and the traffic in the network are some factors that determine the speed of transactions. Still, blockchain is much better than other technologies and processes when considering speed.
- Traceability And Visibility
Blockchain allows every participant in the chain to find the origin of a product. It helps retailers to handle their inventory, acknowledge problems and questions, and validate merchandise histories. It will help the healthcare sector to find the origin of medicines, thereby confirming their legitimacy.