Advantages of Blockchain: 8 Worth Considering
Since its 2008 debut, blockchain has developed quite a bit. The advantages of the distributed digital database, including transparency, speed, cost efficiency and scalability, have become apparent. What’s also become apparent is that blockchain still has a long way to go, and that some of its advantages can also present challenges.
8 Advantages of Blockchain
As we delve into eight distinct advantages of blockchain, two points are worth keeping in mind. First, while all blockchains are based on the same technology, all do not perform equally. Smaller blockchains with fewer users can be more nimble and efficient, while larger ones can be relatively slow and expensive.
Second, blockchain is an evolving technology. Whatever advantages it sports now are bound to become even sharper in the future. “The most vital improvements to blockchain will be in the realms of smart contracts and consensus,” said Sean O’Brien, founder of the Privacy Lab at Yale Law School. Layer 2 technologies will continue to revolutionize what’s meant by blockchain and bring more and more of what’s done on and offline into the realm of Web3, he said.
BLOCKCHAIN IS DECENTRALIZED
No bank or entity controls blockchain, which some tout as its biggest advantage. Why? “A decentralized business model is one in which there is a greatly reduced opportunity for any single entity, or collusion of entities, to secretly manipulate the rules for their benefit,” said Dan Burnett, executive director of the Enterprise Ethereum Alliance, an organization focused on developing open blockchain specifications, according to its website.
He offered as an example, Uniswap, a decentralized stock exchange that uses a completely automated algorithm, which runs on Ethereum, to accomplish the exchange of cryptocurrency. No Securities and Exchange Commission or other governing body is involved because there doesn’t need to be, Burnett said. “No parties are needed for enforcement because it is enforced by computer code that just doesn’t allow for anything but what was programmed.”
BLOCKCHAIN ENABLES TOKENIZATION
Blockchain technology offers wealth-building opportunities to people who can’t currently access them in the form of fractional ownership, said Fairlane Raymundo, an NFT artist and Web3 marketer.
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