Why Use Blockchain?
Moving on from our explainer posts on exactly what is a Distributed Ledger and what is Blockchain, the obvious next question to as is why do both consumers and business establishments use blockchain for their transactions? Why is blockchain useful at all?
Firstly, digitised relationships (whether between businesses, or between consumers and businesses) allow easy communication and exchange of information across physical distances and borders. Blockchain at its very foundation just another digital technology which sits on top fo the internet and benefits from the many advantages that this offers in itself. Advantages such as ease of access, speed, security and authentication.
Cryptography for use in Authentication
Blockchain technology integrates key aspects of cryptography and cryptographic keys with principles of authentication. It does this to help determine the truth of the information being relayed by business partners, and verify that both parties are who they say they are, and have the funds which they claim to have. That in itself, is key to all business transactions (whether financial, or contractual).
The integrity of business transactions is maintained through blockchain technology. Blockchain offers business partners a heightened level of in-built cybersecurity from threats like hackers and other bad actors who might try to sabotage and hijack their private information. Using blockchain for this purpose is a great way to build trust in business transactions and safeguard both individuals and organisations.
Digital Records, Over Paper Records
Paperwork can be hard to counterfeit because characteristics such as physical seals and appearance are complex. Because of this, paperwork has some degree of permanence and immutability, which renders paperwork difficult to edit or modify during business transactions. That’s a good thing when it comes to security, but a hinderance when it comes to going back and correcting mistakes and updating records.
On the contrary, digitised data on blockchain technology is very flexible and with the right security access, can be easy to edit by all parties in a given business transaction.
Digital data is also quicker and easier to work with than traditional paperwork. Vast quantities of data can be condensed onto hard drives or cloud storage, all made available for easy retrieval through blockchain technology. This is why a lot of traditional finance and business in general has started to forego paper transactions and adopt digital data-keeping instead. Digital blockchain technology is an ideal way to transact with ease and integrity.