Upcoming Changes to Blockchain Technology
By Space Coast Daily // June 10, 2021
Blockchain is popularly known as the technology on which cryptocurrencies such as Bitcoin run. Most people don’t know that it also has many other potential uses across many industries, from record-keeping to finance and voting.
To this end, the global Blockchain market is projected to grow to $39.7 billion in 2025, up from a present valuation of about $3 billion.
Blockchain technology is expected to undergo a lot of changes as it grows. Here is an overview of some changes to expect.
Centralization vs. Decentralization – The Winning Argument
There is an ongoing debate on whether Blockchain technology should be centralized or decentralized. Each option has its merits and demerits. Here is an overview of each option, what it means, and its implications.
Centralization means that there is a third party with authority to control the Blockchain’s data and functions. This means that the third party can see and interfere with your transactions, depending on their policies.
Centralization has a range of benefits. Some of the most notable ones include:
■ Clear Chain of Command
A centralized Blockchain is more orderly and organized as there is a clear chain of command. Every person on the chain knows their position and responsibilities.
■ Reduced Costs
A centralized Blockchain requires less support and maintenance than a decentralized one. Pre-planning also helps eliminate potentially costly problems.
■ Quick Decision-Making & Implementation
A centralized Blockchain has fewer nodes and people running operations. This makes it easier to make and implement decisions quickly.
Centralization also has its shortcomings, which include:
■ Lack of Trust
A centralized Blockchain involves a third party with authority over its data and operations. This raises privacy concerns, as the third party can exploit their data or interfere with their operations.
■ Higher Vulnerability
A centralized Blockchain is easier to fail, as its vulnerability is centralized in one place. This makes it unsuitable for mission-critical services.
■ Scalability Limitation
Centralized Blockchains are usually housed on one server. This makes it difficult to scale upwards and expand.
A decentralized Blockchain platform does not have a third party with authority over its content or transactions. Instead, transactions are verified using consensus algorithms. The platform is also 100% open and transparent, but no one can make unauthorized changes.
■ Full Control
Users are in full control of a decentralized system. They don’t need anyone’s permission to authorize transactions, and no one can censor them.
Data on a decentralized Blockchain platform cannot be altered or deleted. The platform also can’t be hacked, making it ideal for the most secure cryptocurrency wallet.
■ Open Development
Decentralized Blockchain platforms grow faster thanks to the varied input by users. They can also scale up quickly and easily.
A decentralized platform also has its shortcomings, including:
A decentralized platform involves many players and users. Decision-making is difficult, and it can lead to conflict.
A decentralized platform also involves high set-up costs. it also requires tools and systems that automate communication.
Increased Public & Corporate Adoption
As mentioned earlier, Blockchain technology has many potential uses. Private companies and public services (including governments) are expected to fuel its growth and expansion.
Corporations are expected to adopt more private Blockchains customized to their needs. These Blockchains are more efficient and reliable, and their owners can tweak privacy and transparency to suit their preferences. They also help companies unlock more business-to-business use-case opportunities.
The race to adopt Blockchain technology for business use has also been fueled by the restrictions by the COVID-19 pandemic. Blockchain is secure, and companies need secure platforms to enable remote working, as necessitated by the pandemic. Companies are worried that their systems may be hacked, and Blockchain is virtually impenetrable.
The banking and financial sectors are also expected to dominate Blockchain expansion in the private scene. Several major corporations, including JP Morgan, have hinted at adopting the technology for secure and efficient record-keeping. However, governments are also expected to introduce touch fin-tech regulations.
Governments are also expected to adopt Blockchain technology for its versatility. It could be used in applications such as voting, record-keeping, communication, financial services, and more. However, governments may be slower than corporations to adopt this technology.
Exponential Market Growth
The Blockchain market is growing at an exponential rate as users worldwide exploit its benefits. The market is expected to grow by more than $35 billion in just five years, as mentioned.
It is worth noting that China is leading in the large-scale adoption and use of Blockchain technology. The Chinese government plans to make Blockchain technology an integral part of its digital infrastructure. To this end, the country has a state-backed Blockchain-Based Service Network. China also aims to offer a global public infrastructure based on Blockchain technology.
Blockchain technology gave the world Bitcoin and other cryptocurrencies. Its users are virtually endless, and it will grow exponentially both in the short-term and long-term. It will also change to accommodate new uses and needs, and these are some of the changes to expect.