Since its inception, this technology has become a long way and one of the most influential technologies in the world. The Blockchain has established itself as one of the incontestable technologies in the field of business transactions. However, it has its own set of limitations which may make it's system less favorable for some traders.
Therefore, for any user, it is important to weigh the pros and cons of Blockchain technology. Based on the result, one should decide if it is worth investing the time, effort and money.
However, before listing and cons, one should understand what Blockchain technology actually is?
Brief explanation of Blockchain Technology
Essentially, the Blockchain is a specialized kind of database used for the storage of essential data and information. Since it is a database, one can store information involving different types of digital data. This could include transaction records detailing the trade of one or more cryptocurrencies. Or it could involve the personal files that stored in a cloud-based system. It could also involve the learning credentials of a user.
But the similarity of this technology with other databases ends with functionality. The infrastructure and functions of the blockchain is radically different from other databases. The primary reason for this is its decentralized nature. Consequently, no-one can access all the data from one single location. Additionally, no single authority has complete control over the whole database and its transactions.
The data in a Blockchain is evenly spread across multiple individual computers / nodes, which are under the control of different people. Since there is no single point of control, it becomes harder for hackers to access data from multiple nodes. Never the database unless the network computers suffer from unsalvageable damage.
In the case of other conventional databases like PostgreSQL, MySQL, Cassandra, etc, the system is centralized and under the control of a single entity. Therefore, it is completely up to the discretion of the controlling authority to make decisions regarding the network and the data. In such a case, the users have no power.
Merits of Blockchain Technology
Two to the decentralized nature of the blockchain network, this system has many special advantages over other databases:
- The distribution of the data over multiple nodes makes it hard to commit fraud; even unauthorized manipulation of the information is challenging.
- The data on the Blockchain is transparent by its inherent nature. This means are all visible to the users on the network. As a result, users feel more confident about the security of their information.
- Data distribution across multiple nodes provides resilience against many types of damage.
- In the majority of cases, the data stored on a Blockchain network enjoys immutability. This means that once is stored on Blockchain network, it's impossible to erase it. This is not a blockchain offering this feature. However, this was a core feature of the Bitcoin Blockchain, and as a result, other Blockchains may follow suit.
The impact of the above mentioned benefits is far-reaching. Thanks to decentralization, the application possibilities for Blockchain technology are endless which is not the case with conventional centralized databases.
Developers can use the technology to build a social network that offers innovative means of ensuring user privacy. It can add security to the devices on the Internet of Things. It can improve patient privacy.
Demerits of the Blockchain Technology
- Delays in Transactions: This particular factor is one of the biggest limitations that most of the Blockchain networks suffer from. This process takes a long time; typically up to a few hours. One way of circumventing this limitation However, it still takes time and is not instantaneous.
- Vulnerabilities in its security feature: Is vulnerable to many kinds of security breaches. Comply with the network rules. For any data modification using this technology, a large number of users have to provide their consensus. However, when a hacker can access the data without involving the user consensus, this security vulnerability could lead to a massive data loss.
- No guarantee of complete transparency: Most users move their data, like for company projects, onto the Blockchain to ensure greater transparency. However, when the Blockchain runs on a closed-source application, this transparency has limits. This means that only a few people would be aware of the functionality of the software, even if the data is visible to all.
- The 'fork' risks: As a result of the decentralized architecture of Blockchain technology, there is a risk of one part of the network forking off. This occurrence is not a rare phenomenon and occurs frequently. This kind of occurrence may not be catastrophic, but it may have adverse results. One scenario could be the modification to Blockchain protocol which may end up damaging an application on the network.
Undoubtedly, there are many more benefits involving Blockchain technology than there are demerits. It depends on the users as to how significant the drawbacks are.
For most, it is a revolutionary method of storing data in a trustless, immutable and hack-resistant environment. Therefore, it makes sense that it is more and more global organizations are adopting this technology for their data transactions.
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