Did you know that there are high expectations for blockchain technology, which is used for virtual currency?
Three characteristics of blockchain are attracting attention, and what kind of impact will the utilization of these technologies have in the future? I would like to explain from now on.
Three mechanisms of blockchain
I think many people know about virtual currency, but that virtual currency is based on blockchain technology, but have you ever heard of the word blockchain?
Blockchain is a technology that is attracting attention because it is very superior to technology and can be applied to all industries. Blockchain is mainly composed of three mechanisms, so I would like to briefly explain the three mechanisms.
P2P network is taking advantage of the network
A P2P network is an abbreviation for Peer to Peer and is a system in which users participating in a blockchain system monitor each other’s transactions.
In addition, since each user is building a network, even if one system stops functioning due to hacking, etc., the other systems are safe, so the entire system will not be affected.
Have a block data structure
Each block that makes up the blockchain records multiple transaction histories. Each block contains encrypted data from the previous transaction, and by encrypting this data, it is easy to find tampering with the data.
Distributed Ledger of Consensus Algorithms
A consensus algorithm is a process that confirms the validity of each block in a blockchain. It is possible to derive from a huge number of calculation formulas whether the transaction was performed correctly or not, and if the validity of the transaction is recognized by mining it, you can receive a reward.
Blockchain is based on a decentralized management system. Each user shares data, and even if one system fails, other systems will not be affected.
Blockchain’s prospects, reasons for expectations, and attractiveness
It is expected to play an active role in various fields due to the high consistency of data in blockchain systems and the fact that the falsification of data is extremely difficult. I would like to take a look at the reasons why expectations are placed on blockchain technology and its appeal.
Expectations for the future of blockchain, not virtual currency
Blockchain technology, which is used for virtual currency, is seen as having great potential. By applying the technology used in blockchain, various activities can be expected in all fields.
Distributed ledger technology is expected to be used in all fields
Distributed ledger technology is expected to play an active role in all fields. With this technology, falsification of data is extremely difficult, and there is no need to worry about the entire system going down, so it will have a great impact on all fields.
High security because transactions can be managed in a decentralized manner
Blockchain technology can be said to be a highly secure technology because it manages data in a distributed manner. Since there is no administrator, you can avoid risks such as falsification or loss of data and system stoppage.
No central administrator is required, highly transparent and trustworthy
Blockchain technology adopts a P2P network that does not require a central administrator, so it can be said that information transparency is high and reliability is high. The style in which users monitor each other is a network-style in which the value of information increases.
The types of information are not limited but infinite
By applying blockchain technology, information is not limited but expands infinitely. When this technology is used in every field, it has the technical power to change the industry itself.
Blockchain future potential 1: Unauthorized transactions and data tampering are not possible
One of the promising future technologies of blockchain is that it cannot be illegally traded or tampered with. How will this technology impact different industries?
I would like to explain briefly.
It is difficult to falsify transaction data that has already been made
Blockchain technology makes it extremely difficult to falsify data that has already been traded. Blockchain P2P networks and consensus algorithms will make transaction data highly transparent and trustworthy.
It can be applied to all transactions, not just financial transactions.
Blockchain technology was once thought to be advantageous for the financial trading industry, but it is said that it can be applied to all transactions. By applying it to all transactions that use the system, it will be possible to improve operational efficiency and reduce human error.
Accurate management of production area camouflage and products such as agricultural products
The application of blockchain technology makes it difficult for tampering, such as disguising the production area, to occur, enabling proper product management. It is extremely difficult to write malicious data to each block, and consumers can purchase agricultural products with peace of mind.
The future potential of blockchain 2: Resistant to system down
In addition to the feature that it is difficult to tamper with the data of blockchain technology, it has the feature that it is resistant to system failure. How will this technology be applied? I would like to explain.
Analyze and manage the same data on all computers of participating users
The blockchain system analyzes and manages the same data on the computers of all participating users. Since users monitor each other’s data, it is extremely difficult to tamper with it, and it is easy to maintain data integrity.
Since it is decentralized, data can be protected and operated even if one system goes down.
Blockchain users have the same data on their computers. Even if you get hacked or your computer breaks down, other users have the same data, so the risk of data loss is extremely low.
Can be expected to be applied in all industries that dislike financial transactions and systems down
Blockchain’s ability to withstand system failures can be expected to be applied to systems such as financial transactions where customer information is collectively managed on a central server and all industries that dislike system failures.
If the system goes down, all operations will stop, so one of the great strengths of blockchain technology is that there is no such risk.
There is almost no chance that you will not be able to trade due to the system down
Like blockchain technology, by adopting a distributed management system, it is almost impossible for all businesses to stop due to a system failure. By applying blockchain technology, it is possible to minimize the risk of system failure.
Blockchain future potential 3: Mechanism for improving operating costs
As a future potential of blockchain technology, it is highly evaluated for its low operation cost. I would like to briefly explain the efforts to improve operation costs by taking advantage of this feature of blockchain.
No need for a central location as all participating users manage
Data is monitored and managed by participating users of the P2P network, which is one of the features of blockchain technology, so there is no need for a centralized location. Since there is no need for a place or cost to set up a server, there is no operating cost.
Participating users will be able to trade directly with each other
By utilizing blockchain technology, it is possible to conduct direct transactions between participating users. Transactions using blockchain technology are difficult to tamper with, making it possible to conduct highly transparent and reliable transactions.
Significant cost savings due to no need for centralized management
Leveraging administrators networks such as P2P networks eliminate the need to centrally manage huge amounts of data, which can significantly reduce costs. Since many industries have centralized data management, the application of blockchain technology can lead to significant cost savings.
Private type or open type can be selected depending on the business content
There are several types of blockchains. Depending on the nature of the business, you can choose between a private type and an open type.
Each type has its advantages and disadvantages, and the fields of application are different. Taking advantage of the merits of both parties, we can expect further success in the industry.
Blockchain future summary
I have briefly explained the future potential of blockchain technology used in virtual currency. Since blockchain is an open-source system, it has the advantage of being very easy to develop.
The number of companies using blockchain-based systems is increasing. Some industries are still in the development stage, so the impact of blockchain on society will grow in the future.