Businesses are starting to produce their blockchain initiatives in response to Bitcoin’s emergence as first-generation blockchain technology. According to Gartner’s 2019 CIO Survey, 60% of CIOs anticipate deploying blockchain by 2022, yet only 5% consider it game-changing technology. But as Bitcoin and other cryptocurrencies flourish, investors want supply chain transparency. And this transparency has been provided by the emerging blockchain trends.
What Does Blockchain Technology Refer To?
Blockchain is a database which is decentralized to easily track assets and record transactions in a corporate network worldwide. An asset may be tangible (that you can touch or see, like a car, land, etc.) or intangible (that you can not touch or see, like intellectual property, patents, copyrights, etc.). On a blockchain technology network, practically anything of value may be recorded and traded, lowering risk and increasing efficiency for all parties.
Why Does Blockchain Technology Matter?
Business requires information to function. It is ideal if it is swiftly and precisely received. As it provides real-time, shareable, and completely transparent data stored on an immutable ledger, blockchain is the perfect solution for delivering such information. Another advantage of blockchain technology is that the data is only available to users of a permissioned network
A blockchain network can track orders, payments, accounts, and production, among other things. You can watch every transaction stage from beginning to end because everyone has access to live objects, which boosts your confidence and presents you with fresh opportunities.
Different Types Of Blockchain Technology And Their Advantages
Blockchain has different approaches and showcases various advantages of blockchain technology. There are majorly four types of blockchain technologies. Below is a brief description of all four of them, along with their pros and cons.
These blockchains are putting the idea of decentralization into practice. The network is open to anyone with a computer and internet access. Nobody owns the blockchain because its name is public and available to everyone. This open blockchain is accessible to anyone with a computer equipped with the requisite hardware and internet access.
Any other nodes or network blocks are copies on each machine in the network. In this open blockchain, we can also perform transaction or record verification. Its more advanced aspect, the smart contract, enabled this blockchain to facilitate decentralization. The public blockchains of Bitcoin and Ethereum are two examples.
- Trustworthy: Algorithms exist to identify any scam. There is no need for participants to care about other network nodes.
- Secure: This blockchain is big because it is accessible to everyone. There is a wider spread of records in a huge size.
- Decentralized: The network is not maintained by a single platform. Instead, a copy of the ledger is available to each user.
- Processing: Because of the transaction’s size, the transaction rate is extremely slow. Each node’s verification requires a time-consuming operation.
- Energy-consuming: Proof of work is high energy-consuming. It requires suitable computer hardware to participate in the network.
- Acceptance: No central authority exists, so governments are facing the issue of implementing the technology faster.
These blockchains lack the public blockchain’s level of decentralization. It is more secure than the alternatives since only chosen nodes can participate. Only specific authorized users have access to them. Additionally, run in a closed network. Few individuals are permitted to participate in a network within a business or organization.
This blockchain is a terrific tool to secure information without making it accessible to the public, provided it is properly secured and maintained. As a result, businesses employ them for asset management, voting, and internal audits. Hyperledger and Corda are two instances of private blockchains.
- Speed: Due to its small size, the transaction rate is high. Each node’s verification takes less time.
- Scalability: The scalability can be changed. One can manually choose the network’s size.
- Privacy: Due to business demands for confidentiality, the amount of privacy has increased.
- Security: The number of nodes in this type is limited, so chances of manipulation are there. These blockchains are more vulnerable.
- Centralized: Trust building is one of the main disadvantages due to its central nature. Organizations can use this for malpractices.
- Count: Since there are few nodes, if nodes go offline, the entire blockchain system can be endangered.
A hybrid blockchain is a mix of the private and public blockchain, where some organization controls some parts and others are made visible as a public blockchain. Permission-based and permissionless systems are used—user access information via smart contracts. Even if a primary entity owns a hybrid blockchain, it cannot alter the transaction.
It offers improved government, banking, real estate, and healthcare solutions by resolving situations in which data must be protected privately but accessible to the public. The Ripple network and the XRP cryptocurrency are examples of hybrid blockchains.
- Ecosystem: The ecosystem’s hybrid nature is its most advantageous feature. Since 51% of users do not have network access, it cannot be hacked.
- Cost: Because only a small number of nodes validate transactions, transactions are affordable.
- Operations: It can decide which transactions should be made public and which blockchain participants to include.
- Efficiency: Not everyone or even organizations are in the position to implement a hybrid Blockchain.
- Transparency: It depends on the organization if someone wants access through a hybrid blockchain.
- Ecosystem: It lacks the incentives for network membership because of its closed ecosystem.
It is an original strategy where every transaction the organization sends or receives meets its needs and is initially validated. Its alternative name is Federated Blockchain. It is a cutting-edge approach to meeting the organization’s needs. In this arrangement, the blockchain is managed by multiple organizations.
Businesses, banks, and other payment processors have a lot of possibilities for it. The organizations’ food monitoring is a federated solution that is perfect for them because they constantly work with their sectors. Tendermint and Multichain are two examples of consortium Blockchain.
- Speed: Verification is quick because there aren’t many users. Organizations can use this more readily because of the fast speed.
- Privacy: The public has no access to the details of the checked blocks. However, it is accessible to any blockchain member.
- Flexible: The flexibility of the blockchain varies widely. The decision can be made more quickly because it is not big.
- Approval: The procedure is less flexible because it has the support of all the members. However, there may be variations in the point of view.
- Transparency: If the organization turns corrupt, it might be hacked. Information may be kept from users by organizations.
- Vulnerability: If a few nodes are getting compromised, this blockchain has a greater chance of vulnerability.
Unprecedented growth in blockchain technology enables innovative ideas for social networks and shared storage, among other things. From a security standpoint, we are pioneering. Developers should prioritize protecting their blockchain services and apps as they create blockchain applications. A developer’s roadmap for a blockchain application should include tasks like conducting risk assessments, developing threat models, and doing code analysis.
It should also include static code analysis, interactive application security testing, and software composition analysis. A good and secure blockchain application must incorporate security from the beginning. Also, it should reflect the advantages of blockchain technology so that businesses and individuals can earn huge benefits using the same.
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