The term “blockchain” has been talked about a lot lately. What began with Bitcoin’s popularity quickly spread to mainstream corporate applications. Beyond its apparent advantages for financial institutions, blockchain has evolved beyond its infancy stage, and enterprises are now starting to adopt it in its complete form.
But what many don’t realize is that there are multiple blockchains available. While Ethereum is by far the most popular blockchain, its fees make it difficult for anyone to use. This has led to the rise of numerous other alternatives including Avalanche, BSC, and more!
Blockchain is the digital, distributed, and decentralized ledger that underpins most virtual currencies and is responsible for recording all transactions without the use of a financial middleman like a bank. To put it another way, it’s a new way of sending money and/or logging data.
Blockchain is the brainchild of developers who saw faults in the current banking system. They considered banks acting as third parties and pilfering transaction fees as needless. Real-time transactions (even across borders) are possible with blockchain, and banks are removed from the equation entirely, potentially lowering transaction fees.
Blockchain also has a practically infinite number of applications that encompass virtually every industry. Blockchain ledger technology can be used to detect financial crime, securely transmit patient medical records amongst healthcare experts, and even manage intellectual property in the corporate world and music licensing for musicians.
Because of its distributed and decentralized nature, this technology can provide several benefits to businesses and individuals in a variety of industries. Some of these benefits include;
At each stage of an asset’s journey, blockchain provides an audit log that documents its authenticity. This helps give verification in areas where consumers are worried about ecological effects or human rights issues around a product — or in industries plagued by piracy and fraud.
It’s easy to exchange data regarding provenance directly with customers using blockchain. Traceability data can also reveal flaws in any supply chain, such as when products are sitting on a loading dock waiting to be shipped.
Before blockchain, each company had to maintain its own database, sometimes manually. But nowadays, transactions and data are logged accurately in different locations because blockchain employs a distributed ledger. The same information is visible to all participants in the network with permissioned access at the same time, ensuring complete transparency. All transactions are time- and date-stamped and are immutably documented. This allows members to see the whole transaction history, virtually eliminating the possibility of fraud.
Blockchain’s smart contracts enable the automation of transactions, this increases productivity and speeds up organizational processes. These smart contracts work by automatically activating the next stage in the transaction or processes after pre-specified conditions are met.
The need for human involvement and the dependence on mediators to ascertain that the requirements of the contract have been met is completely eliminated by smart contracts. When a customer provides all necessary requirements to file a claim, for instance, the claim can be immediately resolved and paid with smart contracts.
Blockchain has the potential to revolutionize how sensitive data is handled. Blockchain helps to prevent fraud and unauthorized activity by generating a ledger that can’t be changed and is secured from end to end. On the blockchain, privacy concerns can be handled by encrypting personal data and limiting access through permissions. Because data is stored over a network of computers rather than on a single server, hackers will have a tough time accessing it.
Improved efficiency and speed
Conventional paper-based operations are inefficient, error-prone, and frequently necessitate third-party intervention. Transactions could be conducted faster and more efficiently by using blockchain to streamline these operations. Documentation, as well as transaction data, can be recorded on the blockchain, circumventing the need for paper transactions. As blockchain eliminates the need to harmonize various separate ledgers, it is much faster to clear and settle operations.
There are many different blockchains available and they each offer a unique experience compared to others. However, the most popular type of blockchain is currently ones associated with EVM or Ethereum Virtual Machine. This is essentially a blockchain that has taken much of Ethereum’s base code and made changes or improvements to it and then released it as its own.
Bitcoin is both a cryptocurrency and a blockchain, that’s because the entire blockchain was built around the unregulated exchange of bitcoin. It was the first blockchain in existence, and it was released in 2009 by an anonymous developer(s) by the name of Satoshi Nakamoto. The blockchain can only be used to send or receive bitcoin as that is its only purpose.
Ethereum was released a few years after the Bitcoin blockchain and introduced the concept of smart contracts. Smart contracts are pieces of programming code that can operate independently on a blockchain. This made it possible to create programs and applications on top of the blockchain protocol.
This development has made Ethereum the most popular blockchain by far as its home to thousands of different decentralized applications (dApps). Unfortunately, this popularity has led to massive gas (transaction) fees which make it a poor option for those just dabbling in cryptocurrency. However, its base code has been used as the basis for other blockchains which offer a faster and cheaper solution.
The Binance Smart Chain was one of the first Ethereum copies and it was developed by Binance, one of the largest cryptocurrency exchanges in existence. BSC provides users with a much faster and more budget-friendly solution compared to Ethereum. Since it’s a very close copy of Ethereum, dApp developers can easily copy over their project to the blockchain. This has allowed the blockchain to quickly grow and expand as these dApps continue to migrate over.
Avalanche was a blockchain developed from the ground up and offers some interesting advantages over its competitors. For one, Avalanche offers both public and private blockchains which make it an ideal blockchain for enterprise or governmental use. It also incorporated an EVM-compatible blockchain, meaning developers from Ethereum can copy over their dApps to the new blockchain. Avalanche offers quick and cheap transactions and has a growing number of users and applications.
Terra is another blockchain built from the ground up and incorporates a unique algorithmic stablecoin system. Essentially, the blockchain is built around the regulation of many different stablecoins. The value of these stablecoins is controlled by the release or burning of LUNA, the blockchains native cryptocurrency.
The built-in stablecoin has made the blockchain a perfect solution for eCommerce and merchants looking to get into cryptocurrency. In fact, the blockchain is currently used as a payment processor in Korea and several other countries. This is one of the largest commercial applications of blockchain in the real world.
Information is the most important component of how a business operates; the faster and more precise the information is, the better. Blockchain is currently the best way to efficiently disseminate this information since it’s faster, more authentic, and it’s shared by an immutable ledger that can only be read by users of a permissioned network. Cryptocurrencies such as Bitcoin can even be used with ease thanks to this technology.
Every blockchain network is distinct and special in its own right. While interoperability is an issue between these networks, several solutions are being created to help create a more seamless experience. In the future, it’s more than likely that we see a much smoother process when going from one blockchain to the next. A process that doesn’t include bridging over cryptocurrencies or having to choose which blockchain you want all your funds on.