The system and the data are particularly resistant to technological failures and malicious attacks because blockchain data is commonly kept in thousands of devices on a distributed network of nodes. There is no single point of failure because each network node can replicate and store a copy of the database. A single node offline having no impact on the network’s availability or security. Many traditional databases, on the other hand, rely on a single or a few servers and are thus more susceptible to technical failure and cyber-attack.
1) Stability– Confirmed blocks are exceedingly unlikely to be reversed, making it incredibly impossible to remove or amend data after it has been entered into the blockchain.
Because every change is monitored and permanently recorded on a distributed and public ledger, blockchain is an excellent solution for keeping financial records or any other data that requires an audit trail.
For example, a company may use blockchain technology to prevent its employees from engaging in fraudulent activities.
In this case, the blockchain might provide a safe and reliable record of all financial transactions that occur within the organization.
This would make it far more difficult for a worker to conceal suspicions.
2) Most traditional payment systems-
Rely on an intermediary – such as a bank, credit card company, or payment provider – in addition to the two parties involved in the transaction.
When employing blockchain technology, this is no longer necessary because the transactions are verified by a distributed network of nodes through a process known as mining.
As a result, Blockchain is frequently described as a “trustless” system.
As a result, by eliminating intermediaries and third parties, a blockchain system eliminates the risk of trusting a single organization while simultaneously lowering total costs and transaction fees.
3) Greater transparency
Transaction histories are becoming more transparent through the use of blockchain technology. Because blockchain is a type of distributed ledger, all network participants share the same documentation as opposed to individual copies. That shared version can only be updated through consensus, which means everyone must agree on it. To change a single transaction record would require the alteration of all subsequent records and the collusion of the entire network. Thus, data on a blockchain is more accurate, consistent, and transparent than when it is pushed through paper-heavy processes. It is also available to all participants who have permission to access it. To change a single transaction record would require the alteration of all subsequent records and the collusion of the entire network.
4) Enhanced security
There are several ways blockchain is more secure than other record-keeping systems. Transactions must be agreed upon before they are recorded. After a transaction is approved, it is encrypted and linked to the previous transaction. This, along with the fact that information is stored across a network of computers instead of on a single server, makes it very difficult for hackers to compromise the transaction data. In any industry where protecting sensitive data is crucial — financial services, government, healthcare — blockchain has an opportunity to change how critical information is shared by helping to prevent fraud and unauthorized activity.
5) Improved traceability
If your company deals with products that are traded through a complex supply chain, you’re familiar with how hard it can be to trace an item back to its origin. When exchanges of goods are recorded on a blockchain, you end up with an audit trail that shows where an asset came from and every stop it made on its journey. This historical transaction data can help to verify the authenticity of assets and prevent fraud.
6) Increased efficiency and speed
When you use traditional, paper-heavy processes, trading anything is a time-consuming process that is prone to human error and often requires third-party mediation. By streamlining and automating these processes with blockchain, transactions can be completed faster and more efficiently. Since record-keeping is performed using a single digital ledger that is shared among participants, you don’t have to reconcile multiple ledgers and you end up with less clutter. And when everyone has access to the same information, it becomes easier to trust each other without the need for numerous intermediaries. Thus, clearing and settlement can occur much quicker.
7) Reduced costs
For most businesses, reducing costs is a priority. With blockchain, you don’t need as many third parties or middlemen to make guarantees because it doesn’t matter if you can trust your trading partner. Instead, you just have to trust the data on the blockchain. You also won’t have to review so much documentation to complete a trade because everyone will have permissioned access to a single, immutable version.