Blockchain Technology – Pros & Cons

What is Blockchain Technology :-

  • Blockchain consists of transactions (blocks) linked as a chain. Every transaction has a timestamp and the next transaction is linked to it, so we can easily know where that money came from and where it went. Blockchain is a digital ledger that is available to everyone.
  • These transactions will be verified by miners. All transactions will be saved in the computers of all miners. Anyone can become a miner.
  • Satoshi Nakamoto‘ (Nobody knows who this person/group is) invented Blockchain Technology. He/she/the group used this technology in the first Cryptocurrency, Bitcoin.

Pros of Blockchain Technology :-

  • Blockchain technology, if used in money transaction services allows peer to peer transactions directly without the intervention of banks and government. For example, if I want to send money to someone in UK, my bank should approve the transaction and after that the receiver’s bank should also approve it. With Blockchain technology, this can be eliminated.
  • By this, there is no need to pay extra charges for the banks.
  • Processing of the transaction will be faster, because of no third party intervention.
  • There will be less frauds and money laundering incidents, because there will be a ledger of transaction available to everyone. This creates transparency.
  • If data has to be modified, certain number of miners should accept it. And hence, there will very less chances of data manipulation and hence results in high security.
  • Services using Blockchain technology will be too tough to be hacked.
  • Blockchain technology is not just limited to financial sector. This can be used in many sectors such as insurance, health sectors etc.
  • For example, in health sector, the health history of people, the medicines they take, treatments they have undergone can be stored using blockchain technology in a chronological order and can be shared with the doctor to provide a better health services to patients.
  • As data is stored in many computers, data loss is nearly impossible.
  • Land records can be stored using blockchain technology to eliminated the data manipulation and other frauds.

Cons of Blockchain Technology :-

  • We do not yet know the security vulnerabilities of Blockchain technology. We cannot say that it is hack-proof.
  • As block chain technology decentralises all transacations, there will be no regulator like central bank. Sometimes, it is very important to have a regulator.
  • Blockchain technology is very costly. Verifying transactions (mining) involves encryption and decryption, which requires huge amounts of electricity.
  • Though less, there will still be some charge for using financial services that run on blockchain technology. For example – Bitcoin transactions also charges some amount.
  • In the concept of bitcoin, miners will get bitcoins for veryfying the transactions. But when we use blockchain technology in other sectors, why public will mine it without any profit?

Conclusion :-

Blockchain technology has a lot of potential to solve the present issues especially in the financial sector. Banking sector is making plans to use blockchain techology in its services. In India, NITI Ayog recommended using this technology for land and health records of all states in India. Andhra Pradesh government already started using it for the land records of its capital city – Amaravathi.

It will be beneficial if we use blockchain technology in such services where this technology offers more benefits and less drawbacks than traditional technologies.

Your Turn…

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7 Comments

  1. Greta Jun 2, 2020 at 10:19 pm - Reply

    Hello!

    I would like to know what type of blockchain are commonly used in the industry? (public or private)

  2. PRIYANKA B Jan 28, 2019 at 4:57 pm - Reply

    like the coin has two sides, block chain technolgy has pros and cons. it will ease the method of transaction. and its value will never be biased so investment in it will be safe for us . but it will be usefull for the people who are only educated technologically. country like india should have to educate their people about bk technology and the it should have to think about the implementation of block chain technology.

    • Team GD Ideas Jan 29, 2019 at 10:01 am - Reply

      True that! Digital literacy is the need of the hour.

  3. Lokesh bhati Nov 20, 2018 at 2:24 am - Reply

    This system is not good for our country because it will replace humans with computers which will make our youth unemployed. We need to generate 10 lakh new jobs per year but we are producing 2.5 lakhs only. So rather than providing treatment to our wounded economy it will give new wounds.

    • Dhananjay patel Feb 8, 2019 at 12:53 pm - Reply

      But at the same time to stand globally we have to use such a technology ….it also helps to improve ease of transaction and money saving which we had to in banking transaction

  4. amratlal Nov 19, 2018 at 2:57 pm - Reply

    If this helps tracking money laundring it can be usefull for economy force people to be bit honest. Easy to obtain lost documents.

  5. Puneet Naryal Nov 19, 2018 at 9:10 am - Reply

    It’s right that bock chain technology is good ..
    But not in India where technology is still lacking.
    We can’t trust upon it where still 60percent still does not know to use atm. People has not access to simple internet then how can be justify a technology which is very advanced to be used by everybody

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