If you about the Blockchain Technologies then you have all the rights to ask for “What are the pros and cons of Blockchain?” and in case you are new then your first question might be as “what is blockchain?”
The Blockchain is the technology behind most of the cryptocurrencies and it is the core behind the new financial world. A world where the transaction is being made on a consensus mechanism with no involvement of any 3rd party or organization. It was first introduced in 2008 by well-known name of this financial world “Satoshi”.
Impact of blockchain on business are enormous and you may say hidden as well. It took time to reap up all the potentials. One thing is sure “Blockchain Future is very bright”.
It is not the case that blockchain will only have the advantages and no negatives points in the account. Well, There are so many pros and cons of Blockchain technology. That’s why we are writing up on this one.
Blockchain explained below in terms of its advantages and disadvantages.
Pros of Blockchain Technology
The nature of blockchain distinct it from different technologies and it has several distinct advantages over traditional databases. Here are few features of blockchain technology you should know.
Peer to Peer Global transactions
Managing central database took lots of resources to prevent it from being tampered. However, blockchain has distributed database locked by cryptography. This feature provides resilient against data loss and infrastructure failures.
As discussed earlier it enables a database to be shared directly without any central authority. Blockchains works on consensus mechanism have their own authentication mechanism e.g. proof of stake and proof of validity etc. Blockchains are transparent in nature, that is one of the reasons that people trust blockchains blindly.
Blockchain simply a large database technology behind most of the cryptocurrencies and it has the power of ledgers that are incorruptible because of the network. Public and Private keys are impossible to crack or hack what gives cryptocurrency their power and beauty.
- Process Integrity
It empowers users, provides high-quality data, immutability, audit trail and creates automation. Fraud and un-authorization of the data are almost impossible.
- Lower Transaction Costs
- Blockchain is Everlasting
Blockchain records are immutable means everlasting. It is almost impossible to erase or undo the records.
Cons of Blockchain Technology
Blockchain technology problems are discussed below
- Miners Provide Network Security
Miner provides network security and they need their nodes to up to date to keep network fast and stable. Miner also need high wattage of electricity to keep their mining farms run smoothly.
- Consensus mechanisms
Blockchains works of consensus mechanism ensuring that each node in the network reach consensus. This process requires back and forth communication.
- Blockchain “Fork”
It is possible for a blockchain to be break off and start a new one because of its decentralized nature. This is called “fork”. Risk of forking can create the challenges because it is so much possible that protocol can be modified during the fork. Bitcoin Cash is a classic example of Forking.
Blockchains are slower than the central database as they took more burden on their shoulders.
The total amount of computation that a blockchain requires caused redundancy.
- Verification Process
Blockchain transaction needs to be signed by the cryptography scheme. This is necessary because of peer to peer fashion of transactions propagation. The verification of these signatures is computationally complex. Different blockchains have different block size which causes the difference in the duration of the verification process.
Conclusion: Should You Use Blockchain Technology?
The blockchain is really a magical innovation in technology and it makes a lot of things possible and feasible. But before adopting blockchain technology you must aware of both advantages and disadvantages of blockchain. Blockchain gives security, transparency and audit trail but it also has certain flaws as well. So, adopt this technology wisely.