Blockchain, a term that emerged in early 2016 as a major game-changing technology. Blockchain technology helps to make digital information distributed without compromising security and privacy. The blockchain in simple words, a series of non-interpretable data records managed by the group of computer which is not owned by a single entity. It is always good to know about the advantages and disadvantages of blockchain technology.
Advantages of Blockchain Technology
Even though Blockchain is a recent entry to the market, with its tremendous advantages and innovations it has set a tone now. You can find the top 5 pros of Blockchain technology.
1. Credible distributed systems
The current transaction system involves third-party systems such as banks, online payment moderators, digital cards, and more which will charge you an extra fee. Here comes the blockchain with a public distributed system where you will be charged nothing for your financial transaction with utmost security and privacy as well.
Blockchain includes the distributed network nodes, verifies all the transaction phases, and eliminates third party involvement. You can call them miners and they will actively mine and certifies all the transactions.
2. Non-Governmental
As we know the governments will manage a larger part of the financial and other data systems. But the blockchain can manage all those systems, data, and transactions in a more sustained and secure way.
When governments involve in financial matters it will result in inflation and they may even circulate more currency than required. But with the blockchain, a decentralized digital ledger, the government will have lesser or no involvement in cryptocurrencies.
3. High Stability
One of the best qualities of the blockchain is its stability. The companies have larger retention over their services. In this system, once it stores data and it’s impossible to erase or manipulate the data and records. You can now gauge the stability of the blockchain system.
All the records and data will be accessible to the people who have required permissions and authorized access.
4. Faster payments – Fewer costs
The current transactions include multiple processes and it will take a long time along with third-party procedures as well. But with the blockchain, you can make rapid transactions with a secure interface and privacy.
The blockchain is the perfect answer for the cost reduction transaction process. It will bypass all the paperwork and extra charges.
5. Utmost security
By now, you know that blockchain is fast, efficient, and secure. Yes, you are right and the stability, security, and privacy of the transactions and records were unquestionable.
Through open distributed secure network nodes, blockchain will negate the risk of hacking and fraudulent transactions.
Disadvantages of Blockchain Technology
Till now you have gone through the pros of blockchain technology. But everything has its limitations right? Let’s see what are the disadvantages or the limitations of the blockchain.
1. Uncertainty with Private keys
The idea of securing your records and transaction details entirely depends on the private keys. These are the keys that you will need to access the records of your transactions.
But what if you lost your private key? If it happens, then all your money and records will be not accessible by you anymore. With this uncertainty of private keys, the blockchain fails.
2. High Volatility
You know the instability of crypto prices. These currencies will vary in terms of prices like anything. One of the best examples is the price of bitcoin. But of the reasons for this is the decentralization of blockchain and its freshness. A lot of people do not know about virtual currencies and it’s used to date.
3. Less Scalable
Many people argue that blockchain is the best technology for online transactions. But note that using this system you can make only 7 transactions per second. Even though it is a distributed system, it requires the verification of all transactions at every node and it will gradually slow down the system.
4. Security concerns
Yes, blockchain is far better than current online payment methods. But according to the reports, there are still 51% attack chances over the blockchain systems. With this vulnerability, security concerns will raise and it will leave the blockchain less secure.
5. Data manipulation is impossible
You can consider this feature as both advantages and disadvantages of blockchain technology. In these systems, once you enter the data, it is hard to even impossible to manipulate it.
Too much security and privacy can sometimes make adverse effects like this. On-demand data manipulation can be a possible solution for this.
Advantages and disadvantages of blockchain – Conclusion
Blockchain is often considered as the future of virtual currencies and transaction mediums for global finance. With its stable, decentralized distributed network nodes, all the transactions were verified and records are maintained securely.
I hope by now, you have got the better of the advantages and disadvantages of blockchain technology! That’s all for now, Happy reading 🙂
More read: Top 10 applications of blockchain