The question of “why is blockchain technology important” has been asked many times since this innovation began, and 2017 presented many user cases and evidence of blockchain technology importance in the world today. “Blockchain technology” is the technology behind blockchain, a type of distributed ledger made up of immutable digital data recorded in packages referred to as blocks. The blocks of data are stored in a linear chain forming a “blockchain”. A blockchain is one of many types of distributed ledgers, though not every distributed ledger employs blocks and chain transactions. Blockchain technology is the technology behind the major cryptocurrencies like Bitcoin and Ethereum and other crypto innovations we saw in 2017.
So why is blockchain technology still important in 2018?
Blockchain technology enables peer-to-peer sharing of databases- no central administrator is needed. The consensus mechanism among participants allows independent processing and verification of transactions on the blockchain. Disintermediation is particularly important because it makes it impossible to tamper with the data. If the data was stored by a central authority, a person gaining access to it would possibly destroy or otherwise tamper with it.
Open source technology comes with lots of efficiency in that by allowing others on the technology, you boost the number of possible applications making it to spread. This is why blockchain technology is going beyond bitcoin to offer different transactional applications. In the U.S. for example, the Securities and Exchange Commission has approved Overstock.com to issue its stock through blockchain. This demonstrates the many possible applications of blockchain technology.
In a blockchain database, users are in control of all their transactions and information. It’s a public ledger with nothing hidden from the participants.
High Quality of Data
The quality of data is determined by its completeness, consistency, timeliness, accuracy and availability for decision making. Data on a blockchain database has all these attributes.
Transparency and Immutability
Transparency and immutability are key characteristics of blockchain records. In a blockchain, all participants have unrestricted view of all the data. This is what we are referring to as transparency. Additionally, a record on a blockchain cannot be altered or deleted, it’s immutable. A blockchain record is therefore highly reliable and could reduce disputes between transacting parties. In ordinary business transactions, it is common for transacting parties to differ on the substance of their transaction. This often leads to litigation which does not assure the innocent party of success unless the party has sufficient proof. With blockchain, the evidence is there for everybody to see.
Increasing the Speed of Transactions
Bank-to-bank transactions may take days to settle especially outside the ordinary working hours. Blockchain technology can reduce transaction time to minutes. You can send money anytime, to a recipient anywhere in the world.
With so many potential applications in business, government, healthcare, defence and energy, blockchain technology has the potential to bring about massive transformation across many sectors. However, the technology is still in its early stages and the realisation of these benefits will depend on whether people will quickly take advantage of the technology or not.