With the popularity that the blockchain has gained in recent years, we are convinced that you have heard about it on more than one occasion. It is popularly known as ‘ blockchain technology’ and has given life to the revolutionary ecosystem of cryptocurrencies. Do you remember the launch of Bitcoin back in 2009? He has not been the only one. The blockchain is also marking a before and after in other sectors, such as the automotive industry , pharmaceuticals, production chains, health, industry… And a long etcetera.
But what does this technology have to become the key to the future of so many sectors? What is the blockchain?
Let’s find out.
What is blockchain?
A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.
What is the chain of blocks or blockchain?
As its name suggests, it is a chain made up of blocks that contain encrypted data from a transaction on the network (it does not have to be cheap). These blocks are intertwined with each other, hence the word chain, and allow information to be sent or value to be exchanged with encryption based on cryptography. It is a transparent and very secure system. And the information it contains is practically impossible to modify. Hence its value for the pharmaceutical, automobile and other industries.
In short, we are facing a system that, despite the fact that it rose to fame with the Bitcoin boom, its scope goes much further. This distributed ecosystem of information allows data to be grouped into distributed and decentralized registries. New applications have emerged from the blockchain, such as the so-called Smart contracts or intelligent contracts.
Blockchain technology could become the appropriate system to guarantee the process that follows the manufacture of a medicine and compliance with all its quality standards. Or control the traceability of the manufacturing parts of a car and optimize logistics costs. Or even to record health data in times of coronavirus without compromising the privacy, security or integrity of patient data.
Challenges of the chain of blocks or blockchain technology
What challenges does the blockchain face today? The great question. This technology has positioned itself as one of the great revolutions of the 21st century, but it has important challenges to face:
- Creation of a regulatory and legal framework . As long as it does not exist, society will not end up trusting 100% in this technology. In countries like the United States, significant progress is being made in this area, given that the Blockchain Law was approved in the House of Representatives last September.
- Lack of control and operation with large amounts of transactions . This is a big challenge to overcome in the face of the limitations of the blockchain.
- Distrust. Much of society continues to associate blockchain technology with black payments, but it is important to clarify the work that is being done to improve the security and transparency of their transactions.
- Power consumption . Power is another of the great challenges when incorporating this technology, since it requires a large amount of energy for its operation.
Legality, security, privacy and adaptability continue to be some of its important challenges. And despite this, blockchain is a very promising technology with great benefits for society. We will see how its application progresses in the coming years.
4 advantages of the blockchain for everyone
As we mentioned above, blockchain technology has great potential because it facilitates the solution of problems in numerous sectors : agri-food, logistics, industrial, financial, health, etc. In fact, there are companies that are already testing it. Undoubtedly, it implies a much more agile and independent business model than those we have known until now.
Take note of its main advantages:
- Decentralization. The absence of a central authority or intermediaries increases the speed of transactions and simplifies the information/value transmission process.
- Cost reduction . It speeds up communication, automates processes and eliminates the presence of third parties. This directly influences the reduction of costs.
- Greater security and transparency . Which translates into trust. The operations are encrypted and codified, which guarantees the security of the information, building a true environment of trust.
- Information Tracking . Thanks to the data storage carried out by the blocks, the information contained in them can be traced in a much simpler way. We are talking about a very effective traceability mechanism.
The blockchain is much more than a technology. It aims to provide an answer to the biggest problem of today: mistrust. It has become one of the most important trends in digital transformation and its role will be key for many sectors. In addition, more and more customers are demanding it.