As we become more progressive every year, new technologies take us by surprise. One such technology is blockchain. It is a shared, immutable ledger that stores information in a way that makes it tamper-proof. Blockchain enables recording transactions and tracking assets in a business network. These transactions are grouped into blocks, and each block is linked to the other block which forms a chain of blocks. This is how it gets its name- “blockchain.”
Initially, blockchain technology was created to support cryptocurrency but today, this technology has covered a wide range of industries such as finance, supply chain, healthcare and more. Demandsage.com mentions that the global spending of the blockchain solutions will reach $19 billion by 2024.
Blockchain development services are quite known these days. Blockchain technology is used to develop several blockchain applications today and like any other technology, blockchain applications also have their benefits as well as disadvantages. In this blog, we will talk more about blockchain development and discuss in detail some of its benefits and drawbacks.
To begin with, let’s first talk about the benefits of blockchain applications.
High level of transparency
Blockchain applications have a high level of transparency. This is because it is a type of distributed ledger and all the nodes in the network share a copy of the documentation. Moreover, the data on the blockchain ledger can be viewed by everyone. Thus, everyone can view the updated record of any transaction. When there’s high transparency, there are fewer confusions and more visibility.
Security is yet another benefit of blockchain apps. All of the validated transactions on a blockchain cannot be modified by anyone because each transaction is hashed and stored on a block using hashing algorithms. This means the transactions are recorded permanently. Blockchain applications have such enhanced security that even a system administrator cannot delete a recorded transaction.
Blockchain applications are known for being efficient. One of the reasons behind this efficiency is that blockchain removes any third-party intervention between the transactions and removes any mistakes. This, as a result, makes the system more efficient and faster. Moreover, there are a set of rules called smart contracts that help with speeding up transactions. Blockchain technology stores and automatically carries out this contract.
Blockchain applications are highly efficient and therefore, they reduce several manual tasks such as manual reporting and auditing. Blockchain eliminates any requirement for middlemen, third-party vendors or providers which helps in cutting down costs tremendously.
Tokenization is the process of turning an asset’s value into a digital token that is stored on a blockchain and distributed among the users. With digital skills and virtual support, tokenization can help with smooth business transactions.
Here are some of the common disadvantages of blockchain applications
Like any other technology, blockchain has its disadvantages as well. Let’s have a look at them.
Scalability is one of the typical drawbacks of blockchain technology. Blockchain applications cannot be scaled as they have fixed size of blocks for storing information. Since it only supports block sizes up to 1MB, it is capable of holding only a few transactions on a single block.
Compared to traditional databases, blockchain technology is pretty costlylier. On top of that, in order to integrate blockchain in their processes, businesses need proper planning and execution which might turn out to increase the implementation costs further.
Some countries have banned the use of block applications like cryptocurrency. Countries like Bangladesh, China, Egypt, Iraq, etc have banned cryptocurrency and therefore, there might be a lot of legal formalities there.
Blockchain applications cannot be modified easily. Once data is recorded, all the codes must be rewritten in the blocks. The problem is that it turns out to be quite time-consuming and expensive. This feature makes it difficult to correct a mistake or make any changes or modifications.
Despite having several disadvantages, blockchain applications are killing it out there. According to an article, the blockchain industry will be worth $163.83 billion by the end of 2029. There are plenty of blockchain development companies offering blockchain development services to develop robust apps and solutions.
If you believe in the potential of blockchain for application development, getting in touch with a reputed blockchain development company is the way to go. Find a company you can trust and discuss your requirements with them. With the right blockchain development services, a robust and feature-rich app is just a few steps away.
Frequently Asked Question’s
What’s the main difference between blockchain and Bitcoin?
Bitcoin is a digital cryptocurrency whereas blockchain is a distributed database. Bitcoin is powered by blockchain technology and Bitcoin uses blockchain as a transaction ledger.
What makes blockchain better than traditional data management?
In the blockchain, the data once recorded cannot be changed or erased, unlike traditional data. This feature is known as immutability. Traditional databases don’t have immutability and thus, they are more prone to being manipulated by anyone.
How do businesses use blockchain technology?
Blockchain eliminates the middlemen and ensures secure sharing of business processes such as business activities. Records and contracts between the parties and partners involved. On top of it, blockchain is extremely secure for businesses as it stores data which is impossible to hack, and misuse.
How to find the right blockchain development company?
First of all, you need to research. You need to search the company’s website, its past projects, and reviews. You should also talk to the blockchain development company, discuss your requirements and get their assistance. Once you feel the company is experienced and reliable, you can consider hiring them for blockchain development services.
As the driving force behind WikiPluck, I am dedicated to curating and sharing insightful knowledge across a spectrum of subjects. From technology trends to Business advice, WikiPluck strives to be a go-to resource for those seeking to enhance their understanding and make informed decisions.
Join me on this journey of discovery and enlightenment as we pluck the gems of wisdom from the vast landscape of knowledge.