What is the Purpose of Blockchain Technology?
Blockchain technology seems to be attracting a lot of attention as the implications behind the invention are being understood. The technology has been studied carefully with millions of dollars being invested into the blockchain technology research over the recent years.
Countless tests have been carried out to find out whether blockchain technology would be appropriate to use in various fields.
The technology provides new methods of authorization and authentication in the internet world that dismisses the necessity of having centralized administrators. Consequently, it allows for the building of new online relationships.
By securing and formalizing these new online relationships, blockchain technology is set to build the fundamental support for the internet supporting transactions and interactions of value. However, even with all the plans to create the digital backbone of new transactional layers into the web, other times, private cryptographic keys, cryptocurrencies, and blockchain are the best way to do this.
Many organizations have come up with flowcharts to help users choose between a blockchain and master copy. It’s not easy to counterfeit paper because physical seals and appearances are complicated.
However, if the data is constantly changing, for instance, if transactions occur frequently and regularly, then paper is not the best medium to store the records. Besides, manual data entry is subject to human limitations.
If data and its history are vital to the online relationships they are trying to create, then blockchain will provide a flexible capacity by allowing many entities to make new entries into the system of records which is held by numerous custodians.
There are so many reasons why there should be a third party to oversee authorizations and authentications. Sometimes a third party control is desirable and appropriate. And if data privacy is the top priority, there are still ways to keep data safe without necessarily connecting it to a network.
Nevertheless, if the current IT equipment featuring log-ins and accounts does not provide for the total security of online identity, blockchain might solve that problem. Satoshi Nakamoto wrote in his/her seminal work, “Bitcoin: A Peer-to-Peer Electronic Cash System,” that “Merchants must be very wary with their clients, asking them for more information than they might not even need. A given percentage of fraud is accepted as unavoidable.”
Private Key cryptography helps push transactions that do not need centralized systems and the complex accounts used to create online relationships. If the database needs tons of money to secure lightweight transactions, blockchain might be the solution.
If this database demands high performance, super-fast transactions, blockchain might not work, and traditional-model centralized systems might be the way to go. Blockchain databases are very slow at storing data—processing every block in a chain has a cost. Centralized data systems, on the other hand, are cheaper and faster.