the-advantages-of-blockchain-technology-thumb-2

The advantages of blockchain technology

Due to the advantages of the blockchain, this technology is gaining increasing importance worldwide. The first blockchain became known through the creation of the Bitcoin. From the first blockchain in 2009 to the present, the blockchain has caused quite a stir and more and more projects are using this technology, because the blockchain offers a wide range of applications and does not only allow trading of crypto currencies.

Function of the blockchain explained briefly

A blockchain has a distributed register or general ledger, which is called a distributed ledger. The Distributed Ledger is the database of the blockchain, which is distributed to many different nodes in the network. By the distribution in the so-called Peer-to-Peer network tamper-proof transactions are possible. When a new node joins the network, it receives a complete copy of the blockchain and the node is given the task of validating transactions together with the other nodes. Nodes can be created on commercial servers or on the computer of a private person. The database of the blockchain consists of many different encrypted blocks, which are strung together. Each block contains several authorized transactions, which are cryptographically encrypted. As soon as a new block is created, it is attached to the blockchain. The blockchain becomes unchangeable and traceable through all these processes. Now we will take a look at the advantages of the blockchain technology.

Instant and direct transactions

Transactions that are executed on a blockchain in a peer-to-peer network are completed reliably and instantly. When using a blockchain, no additional middlemen are required, each transaction takes place directly. This can significantly reduce costs, after all, each additional party increases additional costs. Furthermore to the reduction of costs, time is also saved, because as already mentioned, users of the blockchain can send and receive transactions directly, without middlemen.

Decentralization of transactions

The data sets of the blockchain are not in the hands of a single person. The blockchain with the associated databases are distributed throughout the network, at the so-called nodes. There is no central responsible person for the network and for this reason all participants have equal rights. Each node is in possession of the current, synchronized version of the data sets. Keep in mind that this is not the same as distribution systems that are designed for the parallelization of data sets (e.g. Hadoop Distributed File System – HDFS).

Tamper-proof

Due to own mechanisms of validation and authorization of transactions, which sometimes contain mathematical procedures and due to the ledger distribution in the network, transactions of the blockchain are forgery-proof and reliable. Every single transaction is validated and encrypted by many different nodes in a short time frame. Each transaction that successfully passes the approval process is added to the blockchain data sets.

Application possibilities of the blockchain

The Blockchain has mastered the start with the creation of the Bitcoin wonderfully. With the whole potential of the blockchain technology already many further ideas were developed. With its innovation, IBM Food Trust provides an intelligent, safe, and sustainable food system. Through the shared data sets, environmental violations or manipulated delivery processes can be reported and avoided. In addition, quality can be checked, and the safety of a product can be increased. Then there is Natura, as a partner of SAP Cloud Platform blockchain, which pursues similar goals as IBM Food Trust. As we see, business processes are being developed for the purpose of optimization and this is always happening in almost all industries and the blockchain technology is widely used. Whether around finance, IT, administration or food retail, there are no limits to the use of blockchain technology. With the blockchain technology, faster processes of data are created, qualities are checked, costs are reduced, production processes are optimized, or goods are tracked almost in real time. It is not surprising that with this tool weak points can be found and eliminated faster.

CustomHash AG also goes along with the revolution of the blockchain and continues to revolutionize blockchain technology. With PayPodo in the financial sector, a product has been created that opens new doors.

Table of Content

Mastercard
VISA
SEPA
SWIFT
PCI Security Standards Council
Mastercard
VISA
SEPA
SWIFT

PCI Security Standards Council

Subscribe to our newsletter and get all the latest news as a PayPodo insider!

Would you like to receive all the latest news from PayPodo? Then you’ve come to the right place! Register today and don’t miss anything anymore!

PayPodo operates under CustomHash AG, a company registered in Germany with Legal Entity Identifier 391200VTCFSYUNN7YA32 and with offices at Oberwallstraße 6/4, 10117 Berlin, Germany. CustomHash AG (Certificate) is an authorized Electronic Money Institution intermediary of Verified Payments UAB (Licence No. 27), which is a licensed Electronic Money Institution supervised by Bank of Lithuania under the Electronic Money Regulations.