Revolution to the traditional fiat currency can be traced back to almost eleven years when new and innovative blockchain technology was introduced. Back then, only a single application was revealed to the world that we now recall as cryptocurrency. Some of us may refer to blockchain as a distributed registry technology. Over the years, this distributed registry technology or called DRT further popularized what we now call distributed ledger technology DLT.
Now, what is DLT? For a better understanding of the blockchain, this electronic database (DLT) must be thoroughly overviewed. Spread over multiple devices or better known as nodes; this electronic database can be accessed over multiple channels as the system is closely interconnected. A node consensus technique is utilized for proper functioning. This interconnection and spreading over several networks ask for privacy and intense security; for this, every single update over the network is encrypted by a distinctive cryptographic signature. All in all, this is what makes the process secure.
The earliest triumph
Foreseeing a great potential in the initial stages, many people adopted this unconventional technology. Proving its worth through the creation of private and public networks, the decentralized technologies altered the whole financial industry. Bitcoins are the best example of it. People made billions of dollars by investing in bitcoins. For the best investment tips, visit https://buyshares.co.uk/cryptocurrency/bitcoin-prime-review/.
Millions of users are constantly mining cryptocurrencies such as Bitcoins to decode various complex financial problems. In mining, certain algorithms are developed to decipher complex and unique mathematical equations that cannot be solved by traditional finance.
The sudden inclination of users towards this technology is since there is zero state and bank involvement in the process. State and its regulated banks are commonly involved in the traditional financial opportunities that make it quite difficult for the general public. Cryptocurrencies, on the other hand, are free of any government or legal entity’s involvement. It makes them quite cheaper and more secure than the traditional fiat. Therefore, we may refer to blockchain as a proficient second to banks.
Due to the excessive adaptations, this proxy economy terrified politicians and all the stakeholders that come under the umbrella of the economy especially the financial institutes. The developed countries with a stable economy accepted this innovative and unfamiliar economy. But, the developing and under-developed countries still think of technology as a radical alternative to their traditional payment systems. As a result, an absolute ban was imposed on cryptocurrencies in certain countries. However, noticing the trends, the governments are trying to make amendments to the legislation.
Various applications of decentralized technologies
This widespread decentralized technology i.e. blockchain is not only limited to cryptocurrency. Cryptocurrencies are just a single successful scenario that requires this technology. Blockchain technology can be used for:
Public health
Imagine you can share your reports and consult any doctor across the world. This can be done by using a decentralized registry system. In such a way, all the patient’s credentials from medical history to various lab reports can be accessed from doctors across the globe. Besides, different logistics companies and airlines can use this innovative technology for drug shipment tracking. The drugs can be delivered more quickly and securely to remote and needy areas. As a result, the widespread of diseases can be controlled timely.
Administration
For administration such as supply chain and logistics; a decentralized network can increase the overall efficiency. The transparency of multiple parcels, couriers, and products will prevent swindlers. Even the military industry can gain numerous benefits due to the solid encryption and protection. Certain oil manufacturing and agriculture producing industries can also avail such benefits. However, the telecommunication industry is the one gaining the most from decentralized technologies.
Elections
A country’s future always depends upon how fairly its elections are carried out. Using a decentralized technology, more confidential and transparent elections can be carried out. The results concluded from such voting would be fair. It is because it’s almost impossible to tamper with the results to get the desired outcomes.
Some common challenges
There are some challenges associated with the decentralized technologies that organizations must thoroughly undermine.
The swift changes in an organization’s culture
Decentralized technologies like blockchain eliminate the traditional tools and methods. One of the primal things inside an organization that gets affected in the process is the organization’s culture. Eliminating the need for centralization means the loss of control. This may result in some unsettling outcomes. New imaginative approaches to complex situations are required to understand new opportunities.
Complexity
One of the fundamental challenges that come with decentralization is its complexity. Not realizing the need for adaption and complexity may result in a loss of investment and time. However, strongly coping with the technology may bring new ideas and revenues.
By-passing of regulations
Decentralization comes with the by-passing of conventional regulations. In the case of bitcoins, all the inefficiencies related to conventional payment methods are tackled. The centralization in the financial sector despite its disadvantages acts as a cushion against various challenges. Decentralization, on the other hand, provides less cushion against bottlenecks. Therefore, all the stakeholders involved in the process are affected directly. To tackle such a situation, proper guidance on the related process is necessary.
Costly
The high speed and effective decentralized technologies such as blockchain networks come at a cost. The high transaction cost for peer-to-peer agreements cannot be avoided. By any means, if you are looking to avoid the high costs, the organization encounters inefficiency in all processes. It is since a decentralized system works on an integrated node system. And if you try to override one network, all the others associated with it become irregular.
The bottom line:
The revolution in decentralized technologies offers certain opportunities to various sectors. The benefits that come with adopting this innovative technology are high-end encryption and secure transactions. Understanding the applications and certain challenges, the adaptation process becomes quite easier.
