Those who ardently believe in Blockchain and its potential glorify it as the next big technology to have hit us. To be true, they are not entirely wrong in doing so. Blockchain technology changes the way things operate, eliminating the middlemen and reducing payment errors.
However, users still do not analyze the technology and its pros and cons before just jumping on the bandwagon. Unfortunately, this causes problems and leads to early failure in their endeavors. We here will share with you the pros and cons of this technology, so you do not fall into the trap of hurried acceptance.
First and foremost, using Blockchain technology helps eliminate the presence of any middlemen that cut through your profits. Many people feel that these middlemen provide business and hence are a source of earning.
However, they forget that when these middlemen enter the picture, they take a large chunk of your earnings before you get them. Another aspect that companies forget is that these intermediaries use unethical practices to eat your profits. When you remove them from the picture, the trust factor becomes more critical.
2. High-quality Data
Blockchain offers you very high-quality data for your usage. The distributed ledger system that blockchain works on ensures that only valuable and high-quality data is passed on to you. This is because no one can just enter any wrongful information as the system is highly secured. Since all entries are correct, the chances of you getting pelted with any inaccurate data are reduced as well.
3. Durability And Security
Blockchain is all about durability, and it stores blocks of data to ensure that it remains protected. There is no single point of failure or any single event that may control this technology’s working. Even if the blocks change, there is hardly any change in the security it provides. Moreover, this security level ensures that this reduces the hacking attempts to a considerable extent.
Blockchain has a robust storage system in which any kind of change is impossible. Every single block has a Hash ID, and you cannot create the same Hash ID once again. In case someone wants to make any change in the data, the other users would be intimated about it.
We have already read about blockchain technology being transparent and secure in operations. This means that the data remains intact for more extended periods. Most businesses are therefore turning to Blockchain acceptance as once implemented; there would be no more changes in the system.
6. A Simple Ecosystem That Empowers Customers
Many people believe that Blockchain operations are complicated, and they would not understand it’s working. However, on the contrary, Blockchain is one of the simplest technologies available. It shrinks down the stages of processing any data and thus reduces the work you have to do. As customers get full control of their data, they feel empowered and can use it as per their needs.
7. Fast Transactions
Original methods of financial transactions take sufficient time to be processed. Sometimes they take up to 6 days for that transaction to be completed. However, the same is not applicable in the case of blockchain. With the same at your disposal, your money gets transferred to you within a matter of seconds.
8. Lower Costs
Apart from offering you faster transactions, blockchain also manages to reduce the costs involved. Traditional modes of payment have some form of the transfer fee that you need to pay. Over some time, such prices continue to spiral.
9. Better Traceability
With a vast network of the supply chain, it is hard to trace each level involved. But, having blockchain around simplifies the process. You can now the actual movement of a product from start to finish. Apart from that, you can verify each asset through asset exchanges.
1. Redundant Performance
The computation needs of blockchain technology are more repetitive in comparison to other traditional methods. Each time the ledger is updated, you have to make the same changes in every node. This is because the technology requires a distributed ledger that the same changes are mandatory for nodes as well.
2. Complicated Signature Verification
Each time you want to enter the system, you must verify your credentials through a complex signature verification. You will need a private-public cryptographic signature to ensure that the transaction is happening between the correct nodes.
3. Private Keys
To enter the network, you need a private key. However, if you misplace that key, then all your funds present on the web are gone too. You have to keep the key protected at all times, or else you stand to lose more than what you gain from it.
4. Uncertain Regulations
The truth is that blockchain technologies do not come with a set of regulations that need to be adhered to. This lack of rules has led to an increase in ICO scams, and many people fall prey to the same. Even Government has no control over its working and thus cannot expect any relief from that front as well.
5. Power Usage
The mining of blockchain is very competitive, and there can only be one miner who wins in the end. This leads to the effort of all the other miners getting wasted. Consensus algorithms like proof of work need to use lots of power for computation purposes. With the use of blockchain increasing over the years, this implies that the power consumption will show a hike too.
Whatever people may say about Blockchain technology, the truth remains that it is here to stay. The pros of this technology outweigh the cons, and that is why people are running to implement it on a larger level. With time hopefully, the large-scale adoption and technological advancements, they will overcome these disadvantages. Post that time, the work methods of all enterprises should see a drastic change.