What are the main features of blockchain?

Every day there is a new article or podcast about blockchain and its recent breakthrough in the media. When we say blockchain, bitcoin also comes to mind, that’s why there are articles that deal with it apart from blockchain, such as things to know when to sell bitcoin. Blockchain’s key features are openness, transparency, decentralization, immutability, etc. These are essential benefits that businesses are sure to enjoy more and more over time.

What is blockchain?

The term “blockchain” is often used interchangeably with “distributed ledger technology,” or DLT, which refers to the underlying system that makes blockchain possible. All participants (“nodes”) have access to a shared history of transactions or accounts in the blockchain. These transactions are not necessarily limited to money transfers or financial instruments, but can also include things like birth certificates and medical records. No one can change the data unless all parties agree (consensus).

Key features of blockchain:

1. Transparency:

It relies on a network of nodes that record and share details of every transaction made. It allows anyone to see the transaction history, or ledger, thus giving you complete transparency.

Transparency is essential in the blockchain as it removes any room for doubt or deception. The nature of a highly transparent system means that every single transaction will be instantly validated and authorized by every network member. As a result, it can change how businesses operate for the better, without the possibility of fraud or leakage of confidential data.

2. Decentralization:

Since blockchain technology is still relatively new and unregulated, it is important for those considering its use to fully understand the concept of decentralization. It is a peer-to-peer system, meaning that no central authority or server exists.

Decentralization of data means that the system cannot be tampered with by a single person or group. Therefore, blockchain technology is much more secure than other storage options.

3. Immutability:

Blockchains contain and verify data validity to such an extent that the information cannot be changed. In addition, the technology is so secure that it eliminates the possibility of forgery, which means that any changes to records or data will appear immediately. Finally, it makes blockchain a very reliable technology as there are no chances of data loss or corruption.

It is also impossible to reverse or change transactions without the consent of all participants on the network. It provides a degree of independence and security and an element of trust between all participants in the system. These functions provide a unique advantage compared to existing systems when processing contracts and handling purchase and sales processes in supply chains.

4. Distributed:

Blockchain is distributed, meaning the nodes are spread across multiple computers, creating a network where everyone can access the same information. This means that a data verification system is decentralized across all participants and can be used by companies in different ways.

Blockchain technology is open source, making it an incredibly powerful tool for businesses looking to cut costs and improve efficiency. It is reasonable for companies to switch to blockchain technology to improve their supply chain management systems and reduce costs further down the line.

6. Interoperability:

Interoperability refers to the ability of different parties or organizations to communicate easily with each other through a common database or database system. It is an important aspect of any system and enables companies to send and receive real-time information about their business. Smart contracts can be used to send orders or payments between buyers and sellers on the network, for example.

There is no need for manual data entry in a blockchain system as smart contracts allow the execution of business processes without delays. As with most computer systems, this makes it very easy to record transactions with minimal human intervention.

7. Faster settlement:

Transaction speed is one of the most important features of blockchain due to the time-sensitive nature of many business transactions. For example, companies need to settle contracts, sell products and pay their employees on time, and blockchain technology ensures that this process will go as quickly as possible.

For businesses involved in cross-border and international transactions, a solution that can facilitate these would be incredibly useful as they may not have immediate access to money or other forms of payment. It makes it very convenient for companies to use blockchain technology when settling international trade within their supply chain management systems. The cost savings that blockchain technology offers are enormous.