Guest post: Travin Keith, Nxt Foundation
A lot of people know blockchain as an innovative technology introduced together with its first use case – Bitcoin, a decentralized peer-to-peer cryptocurrency. However, blockchain technology has since also been used for business and organizational purposes, either with a cryptocurrency of its own as a public blockchain, or without one as a private blockchain. While aspects of the technology are seen as something that could be useful for such purposes, there are some concerns as to why a business would want decentralization at all, leading some to, incorrectly, dismiss blockchain technology as a hyped-up trend and nothing more.
Below are a few business benefits we’re seeing attributed to decentralization with blockchain:
- Security – Since records are distributed across multiple areas and are updated as each block is created, there is always a high level of availability for the data. So, even if a large number of nodes fail or are shut down by an attack, the data is still available for people to access. In addition, since the system is regularly updated with the latest block, accessing any of the active nodes means acquiring the latest data, even in the event of a DDoS attack – a highly-desirable trait for network security.
- Distributed Processing – In addition to being able to access the latest block from any active node, the system can also continue to process additional data and add more blocks into the blockchain. So, not only is the data accessible, the system can continue operating as long as there are active nodes in the system. Thus, if an attacker wants to shut down the system to halt processing, they would need to shut down every node on the blockchain, making it even more restrictive to achieve.
- Partnerships and Consortiums – While partnerships and consortiums are usually created with the best intentions and with all of the necessary legal agreements in an attempt to protect all parties involved, there still lingers the concern of trust, especially in cases when the parties involved are in competition in other areas. Because of the decentralized nature of blockchain, the issue is significantly mitigated as trust is not needed in terms of processing data as well as storing it. Verifying that one has the same information that another party has is relatively easy to do without the need for additional trust among the parties involved.
These are just a few of the benefits businesses can have when using blockchain technology due to its decentralized structure. With the increasing number of businesses looking into solutions that blockchain can provide, we’re sure to find even more benefits of decentralization in the near future. Know of other ways that decentralization with blockchain helps businesses? Tweet us @Hyperledger with #decentralized