What is blockchain and why is it important?
Blockchain is a ‘fully decentralized’ database that stores data in blocks that are chained together. All new data that comes in is filled into a new block which is then chained to a previous block, thus arranging the data in chronological order.
Traditional
databases, on the other hand, store data as tables, which makes them more
cumbersome and easily erasable. Today, blockchain is being widely implemented
across different sectors, particularly finance, energy, and utilities.
So, why is
Blockchain being talked about so much? This is because it has the power to ease
financial transactions considerably, particularly because large volumes of data
are involved. Also, data stored within a blockchain is permanent and cannot be
erased.
However,
very few organizations have successfully managed to implement blockchain while
many are still in the research phase. The main reason why most blockchain projects
don’t take off is that there is still a lot of uncertainty surrounding the
technology and how it can be scaled up.
Blockchain Implementation
With the right approach, businesses will be able to put in place a successful blockchain strategy without hindering any of their ongoing projects. Let’s look at a few successful steps to implement blockchain technology effectively:
Understanding Blockchain
Research
shows that many organizations have just a rudimentary understanding of what
blockchain is. However, to deploy the technology for maximum impact, it is
crucial to fully comprehend how it works.
Basically,
blockchain makes use of a secure communication channel that collects data and
stores them as a ledger in digital form. The integrity of this ledger can be
checked by anyone with access to it-thus doing away with expensive third-party
verification procedures.
For
financial transactions, blockchain helps cut costs and speed up processes in
vital areas. Perhaps, the best example of this would be eliminating the need to
combine company data from departments, because with blockchain, everyone
involved will have access to the same digital data. In fact, everyone who is
part of the blockchain network is identified by a public-private key pair,
which is also called the ID or address.
· Developing a roadmap for blockchain use
· Building a blockchain community
· Monitoring the regulatory landscape
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