Every technology comes with their individual sets of pros and cons. In this section, we will enlighten you on the major advantages and disadvantages of Blockchain.
Also Read: Introduction to Blockchain
Advantages of Blockchain
This is the biggest advantage of Blockchain that it is not limited to a single central server. The technology made it possible to work on a decentralized server over a shared network. This is a primary feature which makes this technology different from the others. The database is not subjected to any of the single nodes instead it is distributed over all the nodes present on the shared network. In short, you don’t have to pay a single penny to any third-party as there is no such thing involved.
Once a record has been stored in the ledger, it can only be deleted after a consensus. The transaction record gets the cryptographic protection. Thus, making this Blockchain technology a highly protected and secured one.
- Trust Factor
The technology makes sure that all the nodes get the complete ledger after every transaction. The transparency is the key to the trust developed by Blockchain. The shared ledger includes the details of the original source, destination, time, and date of the transactions.
- Economically Feasible
As there is no third-party involvement, the cost is reduced automatically. Unlike other technologies, in Blockchain, the account holders can directly go for the peer-to-peer transaction by avoiding all the additional cost cutting.
- Faster Transactions
Imagine a situation where you need to send money to a friend staying in another country. Generally, the process might take 3 – 10 working days. And in addition to that, you will be charged a few extra bucks for international money transfer. But, with the help of this technology, you can transfer the amount instantly and you will be subjected to a lesser charge for your transaction.
- All Time Accessibility
As this technology works on a decentralized network, so, even if any of the nodes break down, there will be no effect on the other nodes working on the same shared network. The ledger and the nodes will work as usual. In simple words, the complete system failure is near to impossible when Blockchain technology is considered. And thus, making the network accessible always.
- Easy Sharing Database for Business to Business Arrangement
Different businesses rely on multiple computers for numerous databases. And it becomes difficult when one wants to share this database with another business. The simple solution is Blockchain technology as it maintains a single shared ledger. And it is easy to share this ledger with any other business.
Disadvantages of Blockchain
- Slow Performance
When this decentralized database is compared with a centralized database then you will get to know that it is much slower than the later one.
- Signature Verification
A blockchain transaction requires a public-private cryptograph digital signature verification. It generally makes use of Elliptic Curve Digital Signature Algorithm (ECDSA). This algorithm makes sure that the transaction occurs between the right nodes. So, for every node to prove its authenticity, it needs to verify itself with a digital signature. This whole process is a bit tricky and complex one. While in a centralized database, there is no need for digital signature verification.
- Consensus Approach
For a valid transaction to be added in the ledger, it needs the agreement of all the nodes. The process itself represents the extensive efforts of each node. Well, before establishing that a particular transaction is real and valid, all the nodes need to go through the various back and forth communications, which is again a lengthy process.
- Redundant Data
The amount of computation required in Blockchain system is much more than in a centralized database. Every node running on this shared network needs to undergo the same process independently.
- Energy Consumption
For the validation process of each and every transaction, all the nodes present on the Blockchain network attempts 450 thousand trillion solutions in each passing second. This results in a significant amount of computer power consumption.