Future prospects of using blockchain technology to ensure security of digital transactions
Good day to you all in the LeoFinance community.
Blockchain technology or could be termed Distributed Ledger Technology (DLT), is known as a cutting-edge technology, and can be defined as a form of decentralized distributed ledger that also registers the very beginning of all digital assets. One of the most common and well-known examples of distributed ledger technology in our modern world today is Bitcoin, bitcoin being a digital currency, or cryptocurrency invented by Satoshi Nakamoto in the year 2008. The main concepts about the blockchain are its essential characteristics, some of which are decentralization, transparency, autonomy, anonymity, and immutability. Bitcoin's creating a multibillion-dollar market of anonymous entities has made it stand out among the others since its very beginning and this must have created some controversy as to what could have been the real use of Bitcoin in the decentralized world of cryptocurrency. Thereby blockchain has no controversy since it worked flawlessly since the day of its creation.
Blockchain technology has been of great use and will still be of greater use shortly. That’s one of the beauties of technology, things will always get better over time and the more the timing the more improvements. Blockchain technology aims to serve the purpose of securing digital transactions quickly while making cryptocurrencies more reliable and transparent.
Apart from cryptocurrency, technology has also gotten its hand on many other aspects of life, It has been widely applied to financial and non-financial spheres, which include private securities, the Internet of Things (IoT), the music industry insurance, and anti-counterfeit solutions.
Security in Blockchain
Security means the ability to be free from danger or death. Security in blockchain technology could be accomplished using several methods. Traditionally, the security of any transaction depends on the presence of a third party whose job is to remain an intermediary between both parties such as banks. In Bitcoin, security is achieved by executing proof of work (PoW) and some consensus algorithms which would help to avoid the presence of a third party and also decrease the probability of any form of security breach.
Everything comes with its advantages and disadvantages, There is a certain drawback to the use of proof of work (PoW) and that is because it can only be used in large networks due to the possibility of a majority attack. Moreover, PoW has a lesser chance of energy or energy inefficiency, which generates environmental concerns. But to fight against the emerging environmental concerns other methods of verification were introduced, such as proof of credibility, proof of stake (PoS), and proof of possession. Some other new types of verification can be used in addition to the support of the network from malicious users by increasing the cost of attacks and reducing the incentives for attacks.
Application of blockchain to digital transactions.
Distributed ledger technology (DLT) promises some features to ensure the security of digital transactions, just as demonstrated in Bitcoin. The blockchain cannot be applied to all transactions because of certain reasons which might serve as drawbacks to the system. DLT, in particular, cannot be applied to time-sensitive systems, as it takes a certain amount of time for a particular block to be accepted into the blockchain which could be an approximate of about 10 minutes for bitcoins. However, according to Puthal et al., a distributed public ledger is said to be immune to any form of tampering as it is highly encrypted using advanced cryptography.
If a company should consider the use of blockchain technology, it should be for the reason that multiple parties frequently generate transactions that are dependent on a third party that cannot be trusted. The validation of transactions is a priority and the integrity of each data collected is valued in accordance to the time of processing. At times the list of applicable industries is limited by some factors since blockchain could be used in various spheres.
In present times there is a lot of improvement and development going on in the blockchain that will help to secure transactions shortly. For example, the IBM and Samsung companies united and created a Proof of Concept (PoC) which would aid in the usage of IoT in the future. The blockchain could be used for protection and enhancing equity management capabilities and at the same time could be used for secure energy trading through a credit-based payments scheme. P2P digital transactions should be more secure with the implementation of distributed ledger technology.
Conclusion
Technically, technology provides highly protected and reliable digital transactions due to the complicated encryption of blocks on the blockchain. Just the way it could be used in industries, despite its low processing performance, it has a limited use. But in the future, with the aid of technology, it can be expanded by working more on the associated drawbacks.
Image 1 from Unsplash
Image 2 from Unsplash
Image 3 from Unsplash
REFERENCES
Posted Using LeoFinance Alpha