Blockchain technology is with no doubt one of the most successful and ingenious technology to be invented. Most people do not understand the concept because it is relatively new. However, in simple terms blockchain is a public ledger that records transactions in an accountable and secure manner. Blockchain allows transfer of cryptocurrency or digital currency in a decentralized environment. The data is then held in an interlinked network of computers and is owned and controlled by the users. This article shows some of the benefits of the blockchain technology.
Advantages of blockchain technology
Quality assurance
If irregularities are spotted in the supply chain, the blockchain system can direct users to the point of origin. This enables businesses to carry out investigations and facilitates the process of executing necessary actions to manage the irregularities.
Accounting
All transactions are recorded through the blockchain system, and this eliminates the possibility of having human errors. Moreover, it makes it hard for the data to be tampered with. When records are passed from one blockchain node to another, they have to be verified. Individuals should keep in mind that the accounting process is more efficient on a foundation level. Therefore, instead of having separate registers, businesses can only hold one joint register.
Decentralization
This was one of the main goals of setting up the blockchain system and probably the most imperative one. The blockchain technology has eliminated the need to have an intermediary or a trusted third party to validate the transactions. Instead, the validity of the deal is determined by a consensus mechanism.
Facilitates faster dealings
Blockchain plays an imperative role in promoting faster dealings and quicker settlements of trade. This is possible because it does not need lengthy and cumbersome processes like verification and clearance. Such stages are skipped because the same ledger is shared among financial organizations making the data available to all parties. Moreover, the transactions can be conducted at any time, and they take just a few minutes. This is unlike bank transactions that operate a few hours in a day hence some operations can only be conducted during working hours. Other bank operations may take days, but the blockchain model runs 24/7 and ensures transactions are done in just a few minutes.
Saves costs
The blockchain model does not require any third parties or clearing houses. Therefore, costs that would have been directed towards the payment of the third parties or clearinghouses are eliminated. The model has consequently enabled individuals to save money.