If you've attempted to delve into the world of cryptocurrencies or are just interested in new technologies, you may have heard the word "Blockchain" being thrown around, but what is it? The Blockchain, simply put, is a decentralized ledger distributed throughout a network of computers, used to record transactions (among other things); this prevents the records from being tampered with without affecting all the subsequent records (blocks) that are linked (in the chain). Now that was the quick simple answer, we'll go into a little more detail as we go along.
Decentralization
Benefit number one! in my opinion is decentralization, because the blockchain is a distributed ledger it puts all the parties participating in the network on a level playing ground, the current system we have on the internet and in finance is centralized this means that there is one point at which you must go through that controls your money and your data. For example: if you want to post something on Facebook, because it is centralized your data has to go to through the Facebook server before it goes online and boom! now Facebook has your data (pictures, online activity, things you like) and can do whatever they want with it (cough cough..sell it). When it comes to finance the centralization is a lot more clear, CENTRAL Banks control all the money in their jurisdictions, they can control the supply and value of your money, which leads to all sorts of socio-economic problems. With decentralized websites, applications and currency and some clever cryptography, these issues could be reduced dramatically. Another benefit of decentralization is that it reduces the chance of hacks and fraud dramatically, because there is no central point of attack hackers would have to take down every computer in the network, which is highly unlikely, close to impossible. There are other uses for a decentralized blockchain that could truly revolutionize the world, imagine voting for a government official like a prime minister or a president through a decentralized ledger, this would almost completely eliminate the chances of election rigging.
Image from blockgeeks.com
Immutability
Due to the cryptography (coding) involved in blockchain tech it is impossible to change something in the chain without alerting the whole network, the change will then be rejected by the network. This immutability creates an inherent trust within the network which could be useful in all sorts of situations, just like decentralization it will reduce fraud dramatically and make peer to peer transactions easier to trust, there will be a clear record of all transactions so no one would be able to lie about being sent money or sending money, for example if you were to purchase something online, you wouldn’t need a third party like eBay to act as an intermediary because the network would be able to verify whether your goods or payments have been sent, thus cutting out a middleman (who charges a fee) and making the transaction cheaper.
image from Financial Times
Overall
This is only a brief overview of some of the benefits of blockchain technology, there are so many benefits that stem from the two highlighted in this post alone, this is truly revolutionary and has been compared to the invention of the internet and some have said it is synonymous to the impact of the invention of electricity! I don’t know about that, but there is definitely a paradigm shift coming and blockchain technology is at the forefront of it all.