Impacts Of Blockchain Technology: Decentralization, Security, And Social Implications
Definition and Advantages of Blockchain Technology
Block chain technology can be defined as a process where one internet user is able to transfer a part of digital property to another internet user. The safety and security of this transfer is guaranteed (Cohen, Samuelson & Katz, 2017). Everyone would know regarding the transfer but no one can affect the legitimacy of that the transfer that has been carried out. With the help of a block chain, people are allowed to write entries in the form of a record and then a particular community of few users would control hoe that information is updated and amended. This essay discusses regarding the technology of block chain and its impacts.
Block chain could be defined as a digital ledger of numerous financial transactions. The ledger is incorruptible in nature. These economic transactions can be programmed in order to record various financial transactions as well as anything that contains value (Yli-Huumo, Choi & Park, 2016) The data contained in a block chain can be considered as a reconciled and shared database. This is a process where network is used and benefits can be obtained for obvious. “Block chain is a vast, global distributed ledger or database running on millions of devices and open to anyone, where not just information but anything of value — money, but also titles, deeds, identities, even votes — can be moved, stored and managed securely and privately. Trust is established through mass collaboration and clever code rather than by powerful intermediaries like governments and banks.” (Underwood, 2016). The database of a block chain cannot be stored in a particular location. This means that the data that are recorded in block chain can be verified very easily and are public (Pilkington & Lee, 2017). This data is not available in any centralized version where any unauthorized user can edit it or misuse it. The main advantage of block chain is that the data contained in a block chain can be accessed by anyone with the help of internet.
The technology of block chain is similar to Internet. Block chain technology consists of robustness which is pre built (Lemieux, 2016). This technology store various blocks of data which are identical in nature, with the help of this nature, the block chain cannot be controlled by a single entity, it also does not have any chance of failure. “Bit coin is exciting because it shows how cheap it can be. Bit coin is better than currency in that you don’t have to be physically in the same place and, of course for large transactions currency can get pretty inconvenient.” (Iansiti & Lakhani, 2017). Since the time Bit coin had been invented, the block chain of bit coin has been operating with no disruption. Till date the number of problems with bit coin had occurred due to hacking or some kind of problems in management. This means there have been no flaw in block chain’s underlying concept.
According to its design, block chain can be defined as a technology that is decentralized. Something that takes place on the block chain can be said as some function of that particular network (Jain, Jain & Chauhan, 2018). If a new way is created in order to verify various transactions sometimes the transactional aspects of commerce have chances to become unnecessary. A huge network of computers makes use of block chain technology in order to manage database which is used in recording transactions of bit coin. “The block chain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” (Tapscott & Tapscott, 2016). Block chain stores data all over its network, with the help of this process, the block chain reduces the threats that are faced when data is centrally held (Buchanan & Naqvi, 2018). The network of block chain lacks various points where vulnerabilities can be occurred, these points can be used by cyber criminals to hack data.
Decentralization and Immutability of Blockchain Technology
Block chain technology has various social impacts. Interaction fees and Lower transfer is one of them. The platforms of block chain are preserved by the users if the technology. The preservation does not require help of other parties. This as a result, reduces the fees related to numerous transactions carried out by the user (Sikorski, Haughton & Kraft, 2017). “Online identity and reputation will be decentralized. We will own the data that belongs to us” (Mougayar, 2016). One more social impact includes high degree of security as well as trust. Block chain technology does not require the necessity of third parties and its nature which is decentralized has numerous benefits in aspects of trust. There have been numerous scenarios where it has been found that the elimination of involvement of third parties have proven to be very valuable. Some more benefits provided by block chain is related to security are automatic traceability (Atzori, 2015). A very high rate of dependability, traceability and openness is provided by the block chain technology. The ledger prepared with the help of block chain can be accessed by anyone; as a result any system which is present on the platform of open public block chain is translucent. Everyone can get access of the trade flows present. In case a particular working computer shuts down while performing a task, the information would get saved automatically, no part of data would get lost due to the sudden mishap. This helps the people to get the access of data even if any mishap takes place.
Social implications of the block chain technology are very colossal. On example of this is the introduction of bit coin. Bit coin has provided economic services to numerous people. People do need to access banks, digital wallets, ATMs, debit cards and many more. Block chain technology has allowed the microloan and micropayments to the people who suffer from poor socio economic conditions. The decentralized nature of the technology depicts that an agreement that has been built on a particular platform does not need to take the help of a third party (Wright & De Filippi, 2015). The computer codes can be translated in various logical functions, as a result this helps in executing a process automatically when its requirements are completely met. “Online, we still can’t reliably establish one another’s identities or trust one another to transact and exchange money without validation from a third party like a bank or a government. These same intermediaries collect our data and invade our privacy for commercial gain and national security.” (Radziwill, 2018) Usually people has a perception that bit coin or many other application that work with the help of block chain technology are anonymous, but in many case this has been proved to be wrong. In the cases of block chain that are permission less, or do not require any personal information or ID in order to create a particular wallet, personal information tend to expose. An example of it is suppose a user who owns a crypto currency requires disclosing it for a particular product or service; in this case there are chances that his data might get disclosed (Wright & De Filippi, 2015). Details regarding crypto currency might need to be disclosed due to governmental purposes as well, thus there are chances that the details might get hacked or accessed by some unauthorized user. At this point of anonymity the user or owner of the bit coin would get jeopardized.
In some cases of ATM machines which are present in various countries for buying Bit coin with the help of using credit cards or cash, some precaution measures are to be taken by the operators of ATM (Atzori, 2015). Usually the ATM machines ask for personal information like mobile number and some more data before purchasing bit coins. In this case the wallet which is used to store the bit coins is linked with the database of the service provider to the person purchasing bit coin. Along with this one more measure is taken for safety purpose which is the installation of CCTV cameras. Basically every buyer provides their identity; the lack of anonymity takes place in the case of the ones who are associated with the underground criminal world.
Conclusion
From the above essay it can be concluded that the block chain technology has been used for numerous purpose. It helps organizations in many ways. One of the best examples of success of block chain technology is bit coins. Bit coins have been very popular and used worldwide since its introduction. The essay discusses in details regarding the technology and its social impacts.
References
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