What Makes Blockchain Secure and the Impact of this Technology on the Current Ecosystem
Blockchain technology is trending and all major companies and businesses are looking to the built applications on Blockchain technology. So the question is here why they choose blockchain technology and what makes blockchain technology secure?
Blockchain means Block and chains. The digital data/information is stored in small memory blocks (in easy words you can understand as the data is stored in a text file) and all the blocks are connected to each other by some mathematical hashing function. Every block on the blockchain contains the address of its previous and next block, which means the digital data is stored in chronological order.
What Makes Blockchain So Secure?
Each block is connected by its previous and next block by a mathematical hash code. The hash function generates a unique code for every block that differentiates one block from others (just like our fingerprints).
If someone changes the data stored in the block, the hash value is also changed and the previous blocks did not accept the block. So to make any change in the data, the hacker needs to change the entire blockchain, which is power and cost consuming.
When anyone stores the data on the blockchain it is stored with their unique digital signatures, because of digital signature and encryption, the data stored on the blockchain is temper proof.
Public blockchains stored multiple copies of the data on the connected nodes. The data that is stored on the majority of the nodes are verified as correct and added to the blockchain. If a hacker is able to change the data of a single node or couple of nodes, these nodes are not accepted by the blockchain network. So the hacker needs to change the data simultaneously on the majority of the nodes (that are connected from worldwide), which is nearly impossible. The information and data are stored on the blockchain are publically visible and decentralized. Not all blockchains are public, we will discuss that later someday.
Impact of Blockchain Technology on Current Ecosystem
The major advantage of blockchain technology is its decentralized nature. In today’s financial markets, the transfer of money and goods between two parties needs a third party(Middlemen) to verify the transactions such as banks, payment processors. The transactions are stored in the banks/payment processors separate ledger and they are responsible to complete the transaction securely. Banks and payment processors take a transaction fee to complete the transaction and cut the end-users profits.
If the transactions are made by blockchain, it is transparent and more secure. The cost os transaction is also very low, which ensures that the end-users get the maximum of their profits.
Business Solution
Blockchain technology is known for its transparency and security. Companies that are using blockchain technology gain the trust of users and have an advantage against their competitors. Companies that accept blockchain are transparent and not hidden behind terms and conditions.
As we have discussed earlier the data on the blockchain is stored on multiple nodes that minimize the chances of hacking and modification of data. If the data is misplaced or damaged from the company server it can be retrieved from the other nodes.
Blockchain can eliminate the third parties so that the end-users and the creators can communicate with each other. That will increase the quality and assurance of the products and makes the purchases easier for the consumer.
Online Advertising
The online advertising market is growing every day. The online advertising industry is as big as cloud computing and online security. The traditional online advertising industry has a lot of third parties and hidden costs. That makes very hard for an advertiser to choose the best options for their products and cost more. The process is also not simple for the publishers and the third parties take most of their revenues. There is no transparency and true goal orientation in traditional online advertising.
Blockchain technology will revolutionize the online advertising industry. The advertiser and publisher will be connected peer-to-peer and gest the best results. The advertisers can directly communicate with the publishers and reach their goal in minimum efforts and less cost. The publishers can make more money by delivering their service to advertisers.
Blockchain For Agriculture
Blockchain technology can be very helpful in agriculture. The agriculture industry is not as glamorous as the banking and healthcare industries.
Use Cases of Blockchain Technology in Agriculture:
Transparency
The main problem with the agriculture industry is to track and pay for the delivery of food. In traditional systems, there are a lot of middlemen (third parties) between the farmer and the consumers. The involvement of middlemen increases the cost of the products.
The process can be simplified using blockchain. The consumers and farmers can directly interact with each other and all the data is stored on the blockchain. That will also reduce the time and efforts of farmers to sell their goods.
Sometimes the market prices increase suddenly and the end consumer has no idea why it happened. The middlemen give logic that the crops are damaged by weather or other factors and the supply is very limited that increased the costs. With the use of blockchain the end consumer is able to see the food supply in the market and pay the right price for it.
Increase Quality of Crop and Food Protection
Farmers can also store the type of soil, water level, fertilizer types and the crop types on the blockchain. Based on the data stored on the blockchain, Artificial Intelligence (AI) and Smart Contracts can give the best possible results. That will increase the quality of the crops and reduce the stress of farmers.
Fair Pricing
The small farmers don’t know the real price of the foods and crops in the market, as a result, the middlemen buy their products at very low prices and make a good profit. When everything is on the blockchain, the prices and supply are visible to everyone. The process becomes more transparent and fair for everyone.
Final Thoughts
Blockchain technology is new and emerging. There is a lot of room for growth and adoption for Blockchain technology. Blockchain technology already showed its advantages in the financial markets and there is a very good future for blockchain technology in health care, education, agriculture, and online advertising. In the next two to five years, we may see that many big companies and new startups are built on the blockchain infrastructure.
