What is Blockchain? Advantages of a Blockchain

What is a Blockchain?

Advantages of a Blockchain:

  1. Blockchain’s most remarkable characteristic is that it can go completely decentralized, removing the need for a centralized authority to improve the system’s transparency.
  2. Because every transaction is encrypted and linked to the previous transactions, it is far more secure than other record-keeping methods. On top of that, once a block is created on a blockchain, it is impossible to change its data.
  3. Due to its immutable nature, each time a new record is added, it creates a new block, and an audit trail is present to trace the records. It helps prevent fraud and improve the overall security of the system.
  4. A blockchain can be programmed to automatically perform certain actions, using smart contracts that remove the need for intermediaries in many processes and increase efficiency.

Disadvantages of Blockchain

  1. Some blockchain networks use complex mathematical problems to validate a block, requiring much energy. Bitcoin that uses proof-of-work consensus uses electricity equivalent to Switzerland’s annual energy usage (source).
  2. Blockchains are not scalable like centralized systems. The more nodes join the network, the slower the network becomes.
  3. There is one security flaw in the blockchain network. If someone gets 51% access to the nodes on a network, they can control the network.

Conclusion

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