Blockchain used to be an exclusive technology in the finance sector. Nowadays, other industries are realizing its potential, and hence, there is an increasing number of investors. Before you invest in blockchain, keep on reading to make sure you’re up to speed before jumping in.
- It is Beyond Bitcoin
When someone mentions blockchain, a lot of people instantly associate it with bitcoin. While the two are related, blockchain is beyond bitcoin or any other cryptocurrency. Blockchain is a mechanism for creating a distributed ledger. By being distributed, it means that multiple parties can join. While blockchain started with bitcoins, it is now larger than any other cryptocurrency as proven by its wide array of applications, such as smart contracts.
- There is No Central Authority
There is no central authority that is responsible for running the blockchain technology. Instead, the participants run the network. As computers participate, they exchange transactions to be included in the ledger while sharing over a peer-to-peer network. Every node that is a part of the chain gets a copy of the ledger.
- There is No Middleman
Speaking of having no central authority, blockchain also eliminates the middleman. This is unlike traditional transactions where there is a bank or any other financial institution that connects two parties when making payments. Because there is no intermediary, it also means that there will be lower transaction costs.
- Records are Immutable
One thing that makes blockchains great is that the records are immutable. This makes it a great investment in businesses where traceability is crucial, such as in the food or pharmaceutical sector. The enhanced recordkeeping allows for safe data storage and upon creating a record, the data can no longer be altered. Every block will get a reference to the previous block and it will be impossible to change the information.
- It Fights Corruption
Need a good reason to invest in blockchains? It would help to know that this technology leaves no room for corruption to hide. Blockchains create immutable records, as mentioned above. This means that no one can alter the information that results from previous blocks, which helps to put an end to corrupt practices.
- Blockchain Can Be Slow
Speed has never been the best asset of blockchain, so consider that before making an investment. Compared to global money transmission networks, blockchain is a lot slower. Blockchain processes limited transactions at a given time. The reason for this is that the large network requires authority from more nodes, which will slow the transaction.
- There are Multiple Investment Channels
With the increasing popularity of blockchain, those who are interested in investing will have a lot of choices. While cryptocurrency remains the most popular choice, you can also invest in blockchain stocks and exchange-traded funds.
While blockchains have been around for several years, there’s still a lot to learn about this technology. It can help to take a blockchain strategy programme to jumpstart your understanding. Such a course can teach you more about how blockchain works and its many great applications.