Pros and Cons of Blockchain Technology: A Brief Overview
Blockchain technology is now one of the most popular technologies in the world. Many big companies, government agencies, and non-profit organizations are using blockchain technology to improve existing processes and make transactions more efficient. Since the ledger of blockchain has unique features, many businesses can resolve their systemic problems easily. However, despite its versatility, blockchain technology is not a perfect flawless technology and like all other technologies has some notable drawbacks. This article will explore the pros and cons of this amazing technology from the perspective of both users and analysts.
Pros of Blockchain Technology
The main pros of blockchain are the prime reasons the technology is gaining widespread acceptance.
High-Grade Security
Blockchain technology is famous for enhancing the security layers of users through its ace immutability feature. The users have a unique identification number that helps them check whether the transactions are legal or not. The networks undergo proper validation such that there is no possibility of third-party attacks. Moreover, the network member’s validation ensures stringent security measures for all transactions and trades in the network.
Traceability
Auditing and accounting become easier with the help of blockchain technology due to its traceability. Record keeping is an essential aspect of data storage and blockchain simplifies the process by creating traceable ledgers for each record. This feature is advantageous for industries where users have concerns about issues related to human and environmental rights. Crimes such as counterfeiting can be substantially reduced because records are traceable. Similarly, it is easy to find issues and fix them.
Immutability
Immutability essentially implies that technological records are irreplaceable and cannot be deleted from the network. This feature is significant because it prevents manipulation and tampering of records. Although traditional data storage methods predominate, none can prevent manipulations or protect data from cyber-attacks. Therefore, the financial sector can gain tremendously by integrating blockchain.
Absence of Censorship
Blockchain technology fully subscribes to the policy of “freedom of the press” and “free speech”. Blockchain has no policy that censors people from using its network. It is also worth noting that this technology does not have a centralized control system. Therefore, even governments cannot interrupt blockchain operations.
Less Transactional Charges
The decentralized nature of blockchain is the prime reason behind less transactional changes. This feature will invariably help many enterprises to cut down their costs without the need for external third parties.
Cons of Blockchain Technology
Blockchain technology is replete with advantages, but that does not mean it is free from flaws. There are some disadvantages too, which are necessary to highlight.
Performance Issues
Blockchain technology after integration with traditional databases may suffer from performance issues. It may in a few cases slow down the system, though the impact can be temporary. Sometimes, the problem of redundancies can arise if the blockchain is connected to the network needed to store each transaction.
Energy Inefficiency
Blockchain technology may lead to significant advancements in securing P2P transactions. It may also accelerate many operational systems. However, the usage of the technology leads to higher energy consumption. This is primarily because nodes of blockchain need to maintain a real-time ledger.
Difficult to Modify Data
The immutability feature may be advantageous in some scenarios as it helps in preventing unauthorized data manipulation. However, in some situations, this immutability feature can create problems, especially while rectifying or modifying erroneous data. These modifications can be expensive and time-consuming too.
Private Keys and Proneness to Illegalities
Blockchain technology offers high-grade security and the private keys play a vital role. However, the downside is if a user loses his private key, then it is next to impossible to retrieve data, assets, and funds. The privacy feature can have negative repercussions, since many criminal and terrorist organizations may use it to carry out illicit and illegal activities.
Conclusion
Blockchain technology is more advantageous and certainly has more pros than cons. The role of blockchain in data protection, promoting transparency, decentralization, and popularizing cryptocurrencies cannot be undermined. Blockchain because of its several features will find several applications in the financial, healthcare, and government sectors. Moreover, the disadvantages may not remain shortly, because the technology is being developed.
