For many cryptocurrency enthusiasts, the blockchain is not a strange term. But you don’t have to be an avid fan of crypto to know this term. In many industries including finance, banking, and investing, blockchain development services have been prevalent in the niches.
There have been many claims that blockchain solutions can add more value to companies, regardless of the differences in industry characteristics.
For those who haven’t known about what it is, it is a type of database which is different from the conventional database that we’ve recognized. To understand the true definition of blockchain, let’s see the explanations below.
What is Blockchain and how does it work?
As mentioned, blockchain is a type of database. To comprehend the meaning of blockchain, you will firstly need to define the basics of the database in advance.
Database, as we know it, is information that is stored in a computer system. Large amounts of information are accessed and modified by the users who have the authorization to it.
the data will be hosted on the servers. And these servers can be empowered by dozens of computers or more depending on the demand of the larger database.
Now here is where the conventional database and blockchain are different.
The storage structure is different.
The information collected by the blockchain is known as a block. The blocks have storage capacities that are chained with other blocks when they are filled up. These chained blocks create the chain of data. It is where blockchain names are derived from.
The transactions are irreversible in the blockchain network. Therefore, this nature alone can provide such tamper-proof information, providing the evidence to the users. Blockchain technology indeed wins the immutability factor. Therefore, it can build a ledger of transactions that all of the participants can trust.
What is the main purpose of Blockchain?
As mentioned Blockchain wins the immutability factor. Therefore, it can improve the security of the transaction. But the main purpose of the blockchain is to simplify the transactions between the involved parties without the involvement of the intermediaries. It comes with reliable authentication and authorization in the digital world. Since it emphasizes the immutability factor, no one can tarnish or tamper once it is deployed.
What are blockchain solutions?
Blockchain solutions have been prevalent in many industries that need to upgrade their system and solution. There are tons of opportunities provided by the blockchain for the concerned parties.
And you might wonder if these solutions are aligned with your business niche. Here are the most common blockchain solutions that we’ve found so far.
The auto finance process has been more effective and efficient with the help of blockchain technology. Many software engineering companies help financial services providers to build an auto loan marketplace that is seamless, transparent, and secure.
License and certification
The registration, certification, and licensing that are empowered by the blockchain can provide such effective collaborations between the government bodies and the registrants. One can easily check the status of the application with a single tap of a button, without having to queue up in the offices. The digital interactions between the participating parties are also significantly improved.
Many financial services have been using blockchain technology to serve customers across the globe, eliminating the boundaries of time and place. This practice has been a more common part of digital bank activities. Imagine how much the customers can save when they use direct payments. By the absence of the middlemen, the fees can be curbed to lower. Therefore, one would not have to lose big fractions of their money when they send it to their beloved family in other countries.
The fund distribution can be challenging when handled by third parties. There are still risks of fraud and human error. With blockchain technologies, all can be done in a more autonomous way.
The blockchain can back the tokenization in the niche of gaming. It opens new opportunities for gamers to utilize their assets in the form of crypto and expand their careers without boundaries. The independent gamer will not need to hire an expensive manager to sign a contract with particular sponsors. There are many advantages that we can’t mention here one by one but it has been pretty significant in the world of gaming.
What problems does Blockchain solve?
There are many problems across the globe that the Blockchain manages to solve. They are:
The amount of information from various industries is growing from time to time. One of the biggest challenges in these industries is the big data that demands a lot of resources. Current cloud storage services will not be able to handle the tons of data in the next five years. The blockchain can help with this problem.
We can see the real problem when it comes to cloud data in many industries. Most of them are still centralized. When the data is stored in a centralized unit, it is prone to cyber-attacks.
The security breach has been one of the most common cases in the Health industries, finance, and others. Blockchain enters to help in amplifying anonymity and security. Since the data is hosted on multiple servers around the world, it will be hard for irresponsible parties to tamper with the data.
There are too many problems that we can spot in the intermediaries like banks and other third parties. The middlemen slow down the process and increase the transaction fees.
The banks, for instance, do not disclose information about how they conduct the transaction. As a client, you need to wait until you get a notification of the transaction. And it can fail!
Blockchain eliminates the intermediaries from the equation. In the transaction, the ones will send the funds directly to the recipients. There is no long waiting time. The fees are also more affordable.