Top 10 Benefits of Blockchain Technology

According to Statista, in 2019, around 23 per cent of senior executive respondents stated that being able to develop new business models and value chains was the most significant benefit that Blockchain Technology has over current systems. 

The launch of Bitcoin shifted Blockchain from conceptual to real-world usage, illustrating that this digital distributed ledger technology actually works. The popularity of Bitcoin quickly spread to other mainstream commercial uses, and since then, businesses have been experimenting with how they may use Blockchain Technology to their advantage. Blockchain is being used by well-known corporations, governmental organisations, and non-profit organisations to enhance current procedures and enable new business models. 

Currently, Blockchain Technology is revolutionising all leading industries, for instance-  

1) Spotify purchased the Blockchain start-up Media Chain Labs to create solutions based on decentralised databases to link artists and licencing agreements with the countless tracks on the platform. 

2) Warranteer is yet another instance of how Blockchain Technology is widely used. Customers can use this Blockchain application to access details about the goods they purchased and to quickly contact customer service in case of a problem. 

To demonstrate its viability, Blockchain has clearly broken free and penetrated mainstream corporate operations across industries. 

In this blog, we will understand the benefits of Blockchain, as well as how it might benefit important industries.  

So, let's start with the top 10 benefits of Blockchain! 

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Table of Contents

1) 10 Important Benefits of Blockchain Technology

2) Blockchain Applications Across Several Industries

3) Some Predictions for Blockchain

4) Conclusion
 

10 Important Benefits of Blockchain Technology 

Two crucial points are critical to keeping in mind before we explore the top 10 benefits of Blockchain.  

First, although sharing the same technological foundation, not all Blockchains perform identically. Larger Blockchains may be rather slow and expensive, while smaller ones with fewer users may be quicker and more efficient. 

Second, Blockchain Technology is a developing field. Whatever benefits it currently supports will inevitably become much more pronounced in the future. 

1) Transparency- 

Transaction histories are now more transparent than ever due to Blockchain Technology. Each node in the network has a copy of the data because it is a particular form of the distributed ledger. Everyone has easy access to examine the data on a Blockchain ledger. Everyone in the network can notice the change as well as the updated record when a transaction history is changed. Therefore, everyone has access to all information regarding currency exchange. 

2) Decentralised Structure- 

Blockchain gives businesses the ability to share data within a vast ecosystem where no single organisation has sole control, in addition to enabling transparent transactions. A good example is the supply chain: Many firms- from suppliers and transportation providers to producers, distributors, and retailers- demand or require information from other businesses in that chain, but no one is responsible for facilitating all that information exchange. This issue is resolved by Blockchain due to its decentralised structure. 

3) Cost Reduction- 

The nature of Blockchain can help enterprises save money. It improves the efficiency of transaction processing. Additionally, it streamlines reporting and auditing procedures and lessens manual activities like data aggregation and amendment. Experts cited financial institutions' savings as evidence of the effectiveness of Blockchain, adding that the technology's capacity to simplify clearing and settlement directly translates into process cost savings. Moreover, Blockchain reduces costs for organisations by doing the processing that it is capable of without the need for intermediaries like suppliers and third-party providers. 

4) Enhanced Security and Privacy- 

Another key benefit of Blockchain Technology is the security of systems that use this technology. Blockchain's increased security is a result of the way the technology really functions: Blockchain uses end-to-end encryption to generate an unchangeable record of transactions, preventing fraud and unauthorised activity. A network of computers is used to store data on the Blockchain, making it virtually impossible to hack. Furthermore, by anonymising data and requiring permissions to restrict access, blockchain can support data privacy and better handle privacy concerns than conventional computer systems. 

5) Enables Tokenisation- 

The process of tokenisation involves converting the value of an item, whether it be real or digital, into a digital token that is subsequently stored on and shared via Blockchain. Digital art and other virtual assets have made use of tokenisation. However, Joe Davey, director of technology at international consulting firm West Monroe, stated that tokenisation has broader uses that might streamline corporate transactions. For instance, tokenisation could be used by utilities to trade carbon emission permits under carbon cap programmes. 

6) Instant Traceability- 

Blockchain builds an audit trail that records an asset's origins at each stage of its travel. This helps to give proof in industries where customers are concerned about environmental or human rights issues involving a product or in industries afflicted by fraud and counterfeiting. Blockchain makes it feasible to directly communicate provenance information to customers. Traceability data can also reveal flaws in any supply chain— where supplies might sit on a loading dock while waiting to be transported. 

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7) Immutability- 

This is one of the important benefits of Blockchain. Immutability essentially means that transactions cannot be modified or removed after they have been added to a Blockchain. All transactions are formally documented and date-stamped on the Blockchain, creating a permanent record. Blockchain can therefore be used to trace data across time, enabling a safe, trustworthy audit of data. (This contrasts with legacy computer systems that could be damaged or abandoned and error-prone paper-based filing.) Omar cited Sweden's use of Blockchain to digitise real estate deals to track property titles as they are transferred as an illustration of this benefit. 

8) Increased Speed and Efficiency- 

Traditional paper-intensive procedures take a long time, are subject to human errors, and frequently call for third-party mediation. Transactions can be finished more quickly and effectively by automating these operations with Blockchain. The Blockchain may hold documentation and transaction information together, eliminating the necessity for paper exchange. Clearing and settlement can happen considerably more quickly because there is no need to reconcile various ledgers. 

9) Innovation- 

Leaders across a wide range of industries are experimenting and putting Blockchain-based systems in place to address unforeseen issues and improve outdated, inefficient procedures. As an example of such innovation, Field suggested the use of Blockchain to validate the information on resumes submitted by job seekers.

According to studies, most people fake their resumes, leaving hiring managers with the complex process of manually validating the information. However, pilot initiatives that enable participating colleges to store information about their graduates and their degrees on the Blockchain, which can then be accessed by approved hiring managers, assist solutions for both issues—getting to the truth and getting to the truth fast and effectively. 

10) Automated Transactions- 

With "smart contracts," transactions can be automated, enhancing your productivity and accelerating the procedure even further. The subsequent stage in a transaction or process is automatically initiated after pre-specified requirements are satisfied. 

Smart contracts lessen the need for human intervention and rely less on outside parties to confirm that a contract's provisions have been adhered to.  

When a consumer files a claim for insurance, for instance, the claim may be immediately settled and paid once the customer has submitted all required evidence. 

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Blockchain Applications Across Several Industries 

The benefits of Blockchain apply to all business sectors; however, some are more suitable for this technology than others. Businesses are piloting systems or bringing test cases to full production that are decentralised, have several parties which need access to the same data, and need a better mechanism to confirm that data has not been tampered with. Here are a few examples of industries using the benefits of Blockchain. 

Benefits of Blockchain in Government  

1) Proper Identity Management: The government can employ identity management for each citizen if it is done correctly. They are able to manage transactions, credentials, and data in this way. 

2) Fair Elections: The Blockchain can also be used to conduct transparent elections with zero risk of fraud. 

3) Finance Management: Use a more effective approach to managing finances. They are also capable of allocating funds in a transparent, effective, and efficient manner. 

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Benefits of Blockchain in Healthcare 

1) Patient Profile Privacy: Using decentralised ledger results in a uniform patient profile. Since everything can be exchanged and saved through a secure ledger, patients are no longer required to take their paperwork around with them. 

2) Drug Traceability: Blockchain also benefits drug tracing. In a decentralised network where everything is tracked in real-time, there are virtually no ways for it to be compromised. 

3) Better Clinical Trials: Patient data is protected and kept on a decentralised network for better clinical trials. Public health information can be used to conduct better clinical trials and research, increasing the likelihood that new medications will be discovered to treat various ailments. 

Benefits of Blockchain in Logistics  

1) Better Freight Tracking: Blockchain provides a reliable channel for authentication that also includes verification; no one can tamper with the information that is made public on the network. This can aid in tracking down all deliveries and maintaining them in real-time. 

2) Vehicle-to-Vehicle Communication: Blockchain can help businesses efficiently optimise the information and swiftly secure all the data from vehicle-to-vehicle communication operations. 

3) Security for the Internet of Things (IoT) Devices: This technology can provide security for IoT devices (used in the logistics sector) and keep track of all the data they generate. 
 

Some Predictions for Blockchain 

The future of Blockchain appears promising. The following are some important applications of the technology: 

1) Governments adopting Distributed Ledger Technology (DLT)- In 2020, Dubai completely replaced all existing government systems with DLT-based ones. The logical next step for government organisations seems to be the switch from a paper-based system to DLT. 

2) A Blockchain collaboration- While various Blockchain networks may be running within a single company with varying business goals, significant benefits for the customer may only be attained when these networks can work together under an open standard. 

3) Transparency for industries- Industry transparency is guaranteed by Blockchain, which states that all transactions are publicly visible and that any modification can only be performed after being independently validated by all network nodes. Therefore, Blockchain will at the very least, assist industries in introducing operational transparency. 

Conclusion

Blockchain is a revolutionary technology with a significant impact on every industry out there. The key objective of this blog was to discuss the key benefits of Blockchain and its application ​across several industries so that you could relate and make an informed decision about whether you need to adopt this technology or not. For more details, check out The Knowledge Academy’s most popular Blockchain Training Courses on this developing field of Blockchain Technology.