Blockchain technology aims at availing fast and efficient services, addressing fraud and hacking and enhancing project management. So far, technology has managed to do so. However, it still experiences some drawbacks.
Blockchain Technology – The Advantages
1. No Manipulation
The nature of this technology does not facilitate manipulation. Transactions are arranged in block format. These blocks are time-stamped and then encrypted. Each block is linked to the previous one to form a chain. Before the linking happens, the participants must agree and verify the chain. A consensus is needed or else no transaction will be recorded.
The ledger used for transactions is accessible to all its users. No one organisation controls data or transactions. Such transparency makes sure that transactions and records will not be corrupted. It also minimises the risks of hacking and other security concerns. Transparency increases trust among organizations using this technology.
Companies in industries such as banking and insurance are benefiting from this technology’s ability to track and store records. In the insurance business, technology is useful in applying for policies and renewals. It can also assist in updating the underwriting process. These records are essential in handling disputes and settling claims from clients.
In the last three years, various governments have been evaluating and testing this technology. When the government begins to use the technology, it will mainly be behind the scenes. The technology has the potential to enhance the public sector. Services aimed at people will be speedy, efficient and secure. If governments decide to invest in this technology, it will be used in processes such as procurement and other internal operations.
Blockchain Technology – The Disadvantages
1. Heavy Capital
Operating this technology is demanding, especially in terms of the capital required. The operations have to function round the clock which requires extensive supplies of electric power.
2. Cyber Security
The technology lacks a comprehensive response protocol in case of failure. Since some cyber policies have just begun including this technology, there are significant gaps in terms of managing risk. Bitcoin currency is among the several items using this technology. Extensive research and development are needed to bridge these gaping holes.
Since this technology comprises of decentralised network and ledger, it has certain vulnerabilities. A hacker may not manipulate a transaction, but he can sabotage it. The ledger contains all the transactions happening within this system. Although the data is encrypted, it is possible to invade it in other ways.
Blockchain technology may not have achieved global dominance yet; however, it has exhibited great potential to enhance the lives of people, governments and businesses. Soon, more investment will be made to fully utilise this technology and it will become part of our daily lives.