Pros & Cons of Blockchain Technology
Updated: Apr 27
Let us understand what blockchain actually is and how is it different from the rest of the Database Management Systems; In your usual Database, the data entered is stored on a specific computer, that data is structured in form of tables for easy accessibility and filtering purposes.
Why not a spreadsheet? The spreadsheet is used for any individual or small group of individuals to enter, store and analyze not-so-big data. On the contrary, a Database would handle a large amount of data accessible to rather a large size of the population, the database uses large numbers of computers in order to store data, however, both the database and Spreadsheet are in control of any particular individual or any organization.
Why Blockchain and database are different? One sole reason is the structuring of stored data. The database uses the table structure to hold data and blockchain uses a chunk of blocks to store data. It is said that “All blockchains are database, but all databases aren’t blockchains". The data once entered into the blocks, it is forever forged there with a significant timestamp, and can’t be manipulated further.
Blockchain is one of a kind specific type of structured database. It is quite different from your typical database, it stores information in form of blocks. If any data is entered, it gets stored in a block and when the block is filled with data, the system creates another block linking it to the old one. They are distinguished on basis of Time-stamps. They get chained together in order to differentiate them from uncommon data. The process goes on, as new data comes in it is entered into a fresh block. Once the block is filled with data it is chained onto the previous block. The linking and chain take place together in chronological order.
Different types of information and data can be stored with the help of Blockchain Technology the most commonly it has been used to maintain a ledger for transactions.
In some cases, blockchain is used in a decentralized way so that no single person or group has control, rather, all users collectively retain control of the submitted data. If a blockchain is decentralized it becomes immutable which means once the data you enter, it is completely irreversible.
For any transaction maintenance system, it means that transactions are permanently recorded and viewable to anyone who has access to this technology.
With any new technology comes its own set of regulations, issues, rules, pros, cons, and attributes. Let’s have a look at some of them;
Pros of using Blockchain Technology;
Widely distributed: As you are aware blockchain is not limited to any individual system or group of systems. It is vastly spread across the globe with groups of individual and clustered systems. Every system is connected through nodes and even if any of them gets damaged, there is no loss. In contrast to other conventional databases which store data on a particular server or group of servers, blockchain yields better.
Stability of system: It means if any data entered into the blockchain, it gets permanently embedded into the system, there is no chance of reversibility or manipulation of that data. This makes blockchain the first preference for any financial firm where leads and transactions are very important factors. It will keep all the records of finance since its inception and help in diminishing fraudulent activities.
Trustless System: The channels provided by Blockchain are self-dependent and do not require any kind of intermediary or third party to interfere. In traditional systems, we had to rely on several factors but blockchain eventually reduces cost, and the risk of failure is quite low.
Vulnerability: Due to its vast presence and replication of data, it is very difficult to hack into the blockchain system. The scattered Presence of its nodes and systems allows itself to constantly check any new code.
Loss of data: There is next to no chance that any data entered is ever going to get lost. Due to its infrastructure and abilities, it makes data invincible.
Use of Blockchain in Banking Sector, Land History, Real-estate sector, Medical Industry can yield quite, fortunately.
Let’s see the negatives from the use of blockchain;
If someone particular uses more than 50% of the blockchain technology, they may be able to manipulate the system. Even though it is theoretically possible, it hasn’t happened ever, as the system continues to grow, security does too. And with that it makes it to manipulate the system.
Data Modification: Another problem is once the data is submitted, it is quite impossible to make changes to it. Even if stability is an advantage, this could lead to effects which are maybe catastrophic in nature. In order to modify, you will have to replicate the entire chain and make changes at one point.
Even with all the guarantees of being hack-proof it is not yet proved that it is safe to use. There is no substantial evidence of its security.
Blockchain is one of the costliest ways of data storage. The encryption and decryption system takes a huge amount of power and power isn’t cheap.