Benefits and Challenges of Blockchain technology

Blockchain technology is one the greatest inventions in this digital age. It facilitates the exchange of value without worrying about its security. It seems interesting because it provides a safer, faster and cheaper data exchange option. The most common application of blockchain is bitcoin. If a person wants to transfer a certain amount to someone, he/she must encrypt the transaction request with a private key which can be considered as a digital signature. Such signatures are generated only for a single transaction; hence, authenticity is maintained. With this it becomes obvious that there won’t be invasion of any attacker while transacting a certain amount of money.

In an increasingly digital world, chosing blockchain has significant advantages

· Decentralized framework — Blockchain allows end-to-end smooth encrypted transactions without the interference or a governing head or centralized body and are carried out by users resulting in safer, faster and hassle-free procedures.

· Automated flow — It does the heavy lifting by bringing out the procedures in a systematic way or doing payments automatically with fewer hassles.

· Highly secured — Since it uses digital signatures to facilitate secure transaction it becomes impossible for third party to interfere in the generated chain.

· Transparency- The transaction process becomes transparent because anyone can verify transaction details at any time.

· Cost effective- Compared with traditional transaction model, the cost of end-to-end encrypted transactions is very low.

With digital options, there come few challenges-

· Anonymous users- Transactions can be sent and received anonymously. Although it can protect privacy, it can also encourage illegal activities on the internet.

· Complexity- Though it is one the most popular and hence emerging platform, it is still not easy to trade digitally.

· Decentralized ecosystem- A decentralized ecosystem is needed to support the blockchain framework. The list includes cloud storage, decentralized archiving, decentralized communications and decentralized domain name servers. Most of these technologies are still under development.

· Irreversibility- Once a blockchain is marked and invited on the network; it cannot be changed. This is one of the disadvantages of switching blockchain. It becomes impossible to manipulate the chain after it is directed.

Blockchain is a potential technology. It will require some mining and computing in order to make it incessant. For that, further developments have to be done in the near future. With interconnected blocks the outright expansion of digital transactions can be seen real soon and hence it is the future of decentralized way of doing transactions.