Blockchain technology is a digital ledger created to capture transactions among various parties in a network. Blockchain technology has the potential to impact all recordkeeping processes, including the way transactions, are initiated, processed, authorized, recorded and reported. Many blockchain enthusiasts are hopeful that these new transaction applications will help institute trust, accountability, and transparency among their organization and partners.
One of the key reasons blockchain is fascinating to businesses is that this technology is almost always open source. That means other users or developers have the opportunity to modify it as they see fit. But what is of utmost importance about it being open source is that it makes tampering with logged data within a blockchain extremely difficult. This makes blockchain a particularly secure technology.
- Reduced transaction costs
As noted, blockchain allows peer-to-peer and business-to-business transactions to be completed without the need for a third party, which is often a financial institution like a bank. Since there’s no middleman participation tied to blockchain transactions, it means they can actually reduce costs to the user or businesses over time.
- Faster transaction settlements
When it comes to traditional banks, it’s not unusual for transactions to take multiple days to completely settle. This is due to the lengthy processes in bank transferring software, as well as the fact that financial institutions are only open during normal business hours, five days a week. Also, the financial institutions are located in various time zones across the globe, which can delay processing times. Comparatively, blockchain technology is working 24 hours a day, seven days a week, meaning blockchain-based transactions process happen quickly.
Another reason why blockchain is so thrilling is its lack of a central data hub. Instead of running a massive data center and verifying transactions through that hub, blockchain actually allows individual transactions to have their own proof of validity and the authorization to enforce those constraints.
- User-controlled networks
Lastly, cryptocurrency investors have a tendency to be really optimistic by the control aspect of the blockchain. Rather than having a third party run the show, users and developers are the ones who get to call the shots.
These advantages of blockchain technology have made it successful and more and more people are looking forward to what it has to offer.