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Advantages and disadvantages of the blockchain

Blockchain is a distributed database designed to preserve the data stored in it and prevent it from being modified. Each block within this chain contains a special timestamp and a link to the previous block. Blockchain is also known as the technology behind digital currencies or cryptocurrencies. While the blockchain is secure in design and has multiple advantages, it also has some disadvantages. Therefore, we will look at the advantages and disadvantages of blockchain in this article.

Blockchain definition

A blockchain is defined as a distributed database or a series of immutable records and blocks of data operated by non-proprietary computers. Blockchain can manage growing lists of records, or what are known as blocks, that are linked to each other using cryptography. This technology allows valuable assets to be transferred from one person to another without the need for an intermediary. It is also an independent, decentralized, and immutable chain. The information on the blockchain is free, open, and available for everyone to review. But when the information is stored in the blockchain, it cannot be changed later. The idea of ​​a blockchain was first proposed in 2008 by Satoshi Nakamoto, the creator of the Bitcoin idea.

Blockchain Function

Transparency: It allows access to the information contained therein by any person, at any time or place. That is, accounting books are traded without fear of data modification, as they use an encryption system to protect information from forgery or modification and save it from any form of tampering other than normal encryption methods that prevent access to it. information completely.

Privacy: Blockchain allows the sender of information to maintain privacy by showing or hiding their identity or even sending information with a false identity. This is also widely available on the Bitcoin blockchain. In short, this technology ensures that retailers remain anonymous and does not allow for their identities to be revealed.

Distribution in data storage: While most databases rely on one or several servers to store their data, blockchain relies on distributed data storage. Where data is stored on thousands of devices on a distributed network of nodes where each node copies and stores a copy of the data. So a disconnection at some point will not affect the database.

Unavailable: Hacking the blockchain is almost impossible.

Decentralized: that is, it does not require an intermediary between the sender and receiver and anyone can join. Therefore, the absence of a broker leads to savings in transaction fees. Moreover, the blockchain does not need an escrow system.

Blockchain has provided space for the emergence and dissemination of cryptocurrency transactions, a new form of financial transaction.

Blockchain Disadvantages

Private keys: A blockchain user needs two keys, the public key, and the private key. Although the public key can be shared, the private key must remain secret as it ensures that the user has access to their funds. With the private key, the user can log into their account, and if that key is lost, the user loses everything they own in the blockchain, in which case nothing can be done to recover their money.

Terminology Complexity: The terminology of blockchain technology can be said to be complex, as it contains new terms for the cryptocurrency world.

Storage: The growth in the size of the blockchain appears to be outpacing the growth of hard drives, which will make it difficult to download and archive the file soon. While blockchain storage currently requires 200 GB, blockchain ledgers can grow. Moreover, there is a risk of losing the contract if the ledger becomes too large for people to download.

51% Attacks: Despite the effectiveness of the blockchain protection system, there is little chance of attacks against the blockchain network. The most common attacks in the cryptocurrency world are 51% attacks. In other words, if an entity can control more than 50% of the network's hash capacity, it can eventually break the network. A waiver can be made by intentionally excluding or modifying certain transactions. It should be noted that no 51% of attacks occurred on the Bitcoin blockchain.

Changing data in the blockchain is one of the advantages and disadvantages at the same time, so this paragraph was devoted to talking about it.

Data modification as a benefit of the blockchain: Blockchain technology is very secure and stable. Once data is registered in the blockchain, it becomes extremely difficult or almost impossible to remove or modify it. Therefore, it is an excellent technique for keeping client financial records and other data. It can be said that every change is constantly tracked and recorded in front of all network participants.

Data modification as a defect: difficulty in modifying the data. If it is necessary to modify the data, the user can resort to the Partition or Hard Fork operation, which is necessary to do without a whole chain and replace it with another.

In short, blockchain is a term for the production of sequentially encrypted blocks. It is a record in which all financial movements and everything related to the financial sector are kept. Blockchain also has many advantages, but it also has some disadvantages.

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