Blockchain technology has created much buzz in the market. As one of the leading technologies, it was first conceptualized in the year 2008 by Satoshi Nakamoto. Since then, it gradually, but surely has managed to hold the attention of the industry experts, professionals, and others around the world.
So, why much attention is being given to blockchain?
“The technology is the electronic cash system with a decentralized system and follows a peer-to-peer transfer of data.”
In the above image, you can see the complete process, where De Beers Group, an organization having headquarters in London, and expertise in the exploration, mining, retail of diamonds have used the blockchain network for tracking the diamonds all along the process, i.e., from the miners to the retailers. Blockchain offers a secure way of tracking the diamonds. The company carries out the mining process in African countries such as Namibia, Botswana. As civil war has ravaged many countries in the African continent, this blockchain network helps to check whether it has not been used to fund the violence in these countries, as requested by many consumers.
So, blockchain is significantly transforming the diamond industry. It is providing many benefits to the consumers as well as to the industry alike.
The peer-to-peer transfer of data even makes the communication seamless and safe in the blockchain technology. Peer-to-peer is the communication taking place within the system, such as the transfer of data between two computers without the help of the third party.
In general, the major advantages of blockchain technology are:
- Ability to Trace: Blockchain’s traceability feature can help many industries across the world. Industries having a complex supply chain can relate how difficult it is to trace back the product from its place of origin. This blockchain feature simplifies the process and even helps to prevent fraud.
- Decentralization: Blockchain has another essential feature, decentralization. An example of decentralization is Bitcoin, which has a decentralized cryptocurrency. The bitcoin ledger has a network peer-to-peer.
- Transparency: The Blockchain technology is an open-source, this is the reason why along with the information kept secured, the user can easily view the data.
- Cost Reduction: It helps in cost reduction by eliminating the involvement of third parties. In the current market scenario, as you have to keep a check in the costs, it becomes necessary to have the latest technology, which Blockchain helps in this process.
Blockchain even has some major disadvantages:
- Energy waste: With everybody looking for new ways to save energy, the Blockchain technology has failed in this case. It uses a good amount of energy that does not make sense, when most countries in the world face a shortage of energy.
- Regulatory status is uncertain: Blockchain’s regulatory status is not certain. Worldwide the financial transactions are controlled by the central government. This is why Blockchain might not get accepted by the existing financial institutions in the country.
As per IDC, the global investment in Blockchain is expected to reach $11.7 billion in 2022.
The technology has its shares of advantages and disadvantages, but with various industries investing heavily on Blockchain, one can expect that within a few years, the technology might get fully integrated into different organizations across the world.