Exploring blockchain: Analyzing its pros and cons

Technologies based on the applications of blockchain were implemented from the late ’90s until 2009. This year blockchain technology was developed fully for digital services in the field of financial technology. It focused on providing a safe and more efficient method of storing records in comparison to brick-and-mortar banks.

Blockchain technology was developed considering the ongoing financial crisis of 2008. These events lead to the foundation of cryptocurrency which was built on the mechanism of blockchain. Blockchain is a public distributed ledger of networks over the internet where the records are stored in a cryptographically protected database.

However, this technology has its share of pros and cons just like any other digital technology. In this article, we will analyze the good and undermining aspects of Blockchain technology for a better understanding of this concept.

Pros-

Decentralized network

As discussed above, the financial crisis was dawned upon the world in 2008. In this year, the drawbacks of centralized finance or banks came into the light. This caused the need for a more reliable, efficient, automated, and secure network without the interference of middlemen.

Under decentralized blockchain, you’re the whole and sole acquirer of your transactions and assets, unlike centralized finance. The decentralized distributed ledger includes cryptocurrencies like Bitcoin or the Islamic blockchain of Caizcoin. These two coins and many other digital currencies come under decentralized finance including digital loans and wallets.

Quick transactions

One of the biggest advantages of blockchain technology is the faster transactions that follow. Normally the banks take almost a week’s time to process transactions, but thanks to blockchain that it has cut short the processing time. This feature has made global transactions a matter of few seconds before the recipient receives the due amount.

Helps new businesses and startups

Blockchain has opened doors for innovation and pushed startups to build their services on this technology. Many big companies have launched applications like Alipay, Apple pay, PayPal, and Amazon pay and some have paved their way on Baas and insurance or loan financing.

Cons-

Private key

There is a private key assigned to every address present on the ledger. This key opens the door to the transaction in the network. Unlike the public key that is visible to everyone; this private key is confidential and contains personal data. This is mainly a pro argument as it is securing a user’s data and limiting its access to anybody else but the user themselves.

However, this may be also a big con here. If a user loses this key, his/her record will be prone to threats and cyber attacks. In this case, the risk of fraud increases because the key is irreplaceable in the network.

Lack of knowledge

Not everyone is used to this technology because it is new for most of them. Finding skilled people for the work related to blockchain in a company gets tricky due to a lack of knowledge. This is why the number of products and services built on blockchain technology by startups is comparatively lesser in quantity.

Fake coins

Many fake coins and altcoins in cryptocurrency are a threat to user’s investment. These coins show a trustable image in front of the users resulting in cyber attacks. Therefore, it is not 100% trustable. Besides, some trusted and verified coins are available at a very high price.

However, despite the fake coins, there are some trusted and religiously approved coins like Caizcoin available in the crypto market. You can start investing with this decentralized finance option at a very low price.

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