Decentralization, in simple terms, is a technology that provides a break from the traditional mode of working where the power resides with a central authority. In case of a decentralized architecture, it is impossible to assign a central authority that can govern the technology. Decentralization, as a concept, is important for decision makers as it offers an alternate to business models that require trusted intermediaries to validate any form of transaction. Thus, decentralized application development can provide a safer and more trustworthy system of operation.
Decentralization provides an opportunity for businesses to realize their growth objectives. It is platform-based and ecosystem-driven approach, and is very different in essence from the traditional technology. It offers an excellent way to reduce costs, minimize security risks, and avoid vendor lock-in.
Blockchain Technology – What is it?
As the global economy has been in the midst of a digital revolution since the 1960s, every new technology that has been introduced since has significantly improved business processes by making them faster and safer. Blockchain, the digital record-keeping technology powering Bitcoin as well as many other cryptocurrency networks, is a distributed or decentralized ledger that can record transactions among multiple parties in a verifiable, permanent, and tamperproof way.
Blockchain is a game changer on the scene and has been as instrumental as the internet technology in transforming the various industries – especially banking, manufacturing, supply chain management, and energy.
Shift Towards Decentralized Technology
With blockchain, it is possible to imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. With decentralized app development, every agreement, process, task, as well as payment can have a digital record and signature which can be easily identified, validated, stored, and shared.
With blockchain, intermediaries like banks, lawyers, brokers, etc. might no longer be necessary. Individuals, organizations, machines, and algorithms can interact with one another freely, without there being any outward friction.
A large number of major Fortune 500 companies, from retail and finance to automobiles and airlines, are in the process of exploring blockchain technology for its possible benefits in their business operations and security.
Blockchain in Industry Today – Why is it Such a Rage?
The year 2017 started a wave of blockchain research and development in several major companies, with a number of pilot programs taking shape across multiple industries. Proof-of-concept (PoC), which is an early software implementation or prototype that is designed to check the feasibility and potential practicality of any project, is the largest type of enterprise Research and Development activity being undertaken for blockchain technology. A number of companies have already gained success in various projects, like decentralized social media app development, and have applied for patents related to the technology. These companies include tech giants such as IBM, Boeing, Amazon, etc.
A number of benefits contribute to the increased interest and research in the field. The major plus points for industries include:
Blockchain was introduced with the aim to enable safer transactions, which is why it is no surprise that the technology is being explored in the field of security the most. The popularity of the technology has resulted in clients being less hesitant about having their personal information stored in blockchain-backed systems today. They feel more empowered as they are given the authority over their own data, without compromising on their privacy. By keeping every form of data decentralized, it is possible to now allow a single location to hold all the confidential records of an organization. Decentralized data is particularly useful for an organization that is prone to cyber-attack owing to the sensitivity of data that it deals with.
Streamlined Financial Affairs
Blockchain has had a profound effect on the state of global finance. As businesses go international, an effective cross-border payments gateway has become an essential infrastructure requirement. The use of shared digital ledgers to not just verify but also record transactions has simplified the entire process. Blockchain also makes faster payments with much lower transaction fees possible. It is an effective tool that can help with identity verification and management. The technology also helps prevent the occurrence of criminal activities such as money laundering. Financial institutions are able to develop even more secure digital transaction platforms using this technology, which is an added plus.
Improved Advertising and Marketing
Blockchain improves the credibility of any functioning system, which is why it is a great technology for marketing and public relations. Blockchain social network developers are investing huge sums in crypto social media app development, which will enable genuine human engagement and improve customer loyalty. One of the most important benefits of the technology is the fact that it helps businesses identify through valid statistics whether their campaigns are generating genuine human engagement or are being spammed by bots.
Blockchain technology also gives the PR firms more control over their content and confirms originality of their press releases and social media posts. Companies are able to produce content that is coherent on every platform using this technology.
The world’s economy is evolving and businesses that follow the flow of innovation will be able to make a place for themselves in the new age digital world. Decentralized technology along with smart contracts and digital currencies are likely to make business processes safer, faster, scalable, and more efficient. Considering the many benefits of the system, the economy will continue on the path of decentralization as more and more businesses join the huddle.
The short term value of blockchain lies predominantly in its role in cost reduction through transformative business models. In the long term, however, blockchain has the potential to open new avenues for jobs in a large number of industries. It will help create a safer online system and improve the overall speed, security, and management of data in crucial sectors such as government, healthcare, and finance.
Just like the dot-com boom shook the traditional business world and transformed the way businesses were conducted forever, so will be the case with blockchain technology.