[Answered]What is blockchain technology? Discuss its advantages and potential applications.

Demand of the question

Introduction. What is blockchain technology?

Body. Discuss advantages and potential applications of blockchain technology.

Conclusion. Way forward.

Blockchain technology is a technology that leads to a chain of blocks, containing digital information stored in a public database. It is a distributed database existing on multiple computers at the same time, which constantly grows as new sets of recordings or blocks are added to it. Blockchain technology has a lot of advantages especially regarding security and processing. It has a lot of potential applications in various fields that make it one of the 21st century technological developments.

Advantages of blockchain technology:

  1. Integrity of the whole process: Blockchain technology ensures integrity of the entire process. It means that any block or even a transaction that adds to the chain cannot be edited which ultimately provides a very high range of security. They provide an unalterable document of the history of every transaction.
  2. Traceability: With the blockchain ledger, each time an exchange of goods is recorded on a Blockchain, an audit trail is present to trace where the goods came from. This improves security and prevents fraud in exchange-related businesses. It can also help verify the authenticity of the traded assets. In industries such as medicine, it can be used to track the supply chain from manufacturer to distributor, or in the art industry to provide an irrefutable proof of ownership.
  3. Security: Blockchain is considered to be a highly secure system due to its digital signature and encryption. This ensures that the owner of the account himself is operating the transactions. The block encryption in the chain makes it tougher for any hacker to disturb the traditional setup of the chain.
  4. Faster processing: Before the invention of the blockchain, the traditional banking organisation took a lot of time in processing and initiating the transaction but after the blockchain technology speed of the transaction increased to a very high extent. Before this, the overall banking process takes around 3 days to settle but after the introduction of Blockchain, the time reduced to nearly minutes or even seconds.
  5. Fraud prevention: A system that is based on data stored in a number of places is immune to hackers. Its not that easy to get access to it, and if so, any piece of information can be easily recovered
  6. Transparency: Banks, as well as the clients, are immediately notified about the completion of transactions, which is both convenient and trustworthy. In financial systems and businesses, this adds a layer of accountability, holding each sector of the business responsible to act with integrity towards the company’s growth, its community and customers.

Potential applications of blockchain technology:

  1. Governance: Blockchain technology can help in ensuring good governance. It ensures transparency of the public records through the usage of a digital form platform and allows auditing of government documents. Moreover it allows to maintain the authenticity of the document and clearly reduces the processing time.
  2. Banking: Blockchain can help in avoiding risk of payment losses involved in banking transactions by adopting secure distributed ledger platform. It reduces transaction fees across cross-borders, corporate payments and remittances.
  3. Food & Supply Chain: It creates a tamper proof record to check the real information about expiration date, product journey from the farm to the shop. The real information of the product can help in improving the reliability and efficiency of the supply chain system.
  4. Insurance: Blockchain technology can change the ways the insurance documents, claim settlements and fraud handling’s are carried out. It allows the creation of transparent, secure, decentralized and immutable insurance network.
  5. Healthcare: It helps to prioritize patient health at all costs without compromising the quality of the health care service. By establishing a secure chain of network blockchain can help in handling the patient records, consent forms, billings and public health monitoring.
  6. Automotive: Blockchain can solve the challenges in automotive manufacturing, car deliveries, billings. It can help in the creation of an after sales support ecosystem to keep track of the maintenance record of vehicle owners.
  7. Tourism: Blockchain can reduce the delay time of passenger document handling, creates a decentralized hotel booking ecosystem at the least transaction fee and also keeps passengers private information safe.

Blockchain technology has proven itself robust and secure. It ensures integrity of the data and reduces incidents of fraud. The decentralised nature of the blockchain technology applications makes it a perfect fit for many industries to carry out secure business transactions. The proper use of blockchain technology allows us to avoid the use of middlemen or partner platforms in a peer-to-peer network, reduce reception time, fraudulent proof.

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