Before COVID-19, the instant surge in the blockchain market attracted the attention of everyone, even stock marketers. It was a considerable business that gained the trust of people to invest. However, only a few have in-depth knowledge of blockchain development and its work.
Today, the market is all about how information is getting transferred. Blockchain has changed how it delivers that information as it offers immediate, shared, and transparent information that authenticated network members can only access. Not only this, there is much about blockchain, like decentralization, unanimous, immutable, and others.
As digitization is taking over the global market, blockchain has emerged as one of the new-age technologies that are helping businesses to reach new heights. It will be fantastic to know how big is the blockchain market and how it is growing.
As per the research, the size of the global blockchain technology market was USD 5.92 billion in 2021, which will grow tremendously by 2030. Below are the stats that will prove it.
Image Credits: Grandview Research
Investing in blockchain technology is legal in some countries. People are investing in it and creating new opportunities for market growth. Statista says global spending on blockchain solutions accelerated from 4.5 billion to 6.6 billion in 2021, estimated to rise to $19 billion (approx) by 2024. That’s a huge number!
Well, these are the stats that are important to get to understand more about Blockchain. But for those not aware of the Blockchain and its benefits, you have landed on the right page that will help you explore blockchain technologies and their use cases.
What is Blockchain? Understanding the hype around it…
You can compare a blockchain with a distributed database whose data and crucial information is shared across the network globally. It is a secure way to store transaction records. All the information is stored in a digital format, making it preferable to store and share cryptocurrency, such as Bitcoin.
It is just like a database with a critical difference: the data structure. Unlike a typical database, Blockchain gathers information and groups it into blocks. Each block has its storage capacity; once filled, they are closed and will get linked to the previously filled block through cryptographic hashing. It will create a unique secure code that will tie into the next page or block, creating a chain of blocks or a blockchain.
This creates a chain of blocks, thus getting its name (Blockchain).
But, why does blockchain come into the picture?
Today, global transactions between nations somehow define the legal and political structure. These transactions, contracts, and records need to be secured. The way we have regulated those transactions has to change and needs modifications in terms of security. This is where blockchain came into the picture and has helped solve this problem.
Blockchain is an open, distributed ledger that records those transactions between two parties efficiently and verifies who is making the transaction.
Blockchain ledgers are public and designed with robust security measures, making them a fantastic technology for almost every sector. Today, every sector is using blockchain technology to grow their business securely.
Isn’t it fantastic technology?
Have you ever wondered how this technology came into the picture and how it has evolved? Let’s dig deeper into its history.
History of Blockchain
Blockchain is not a new technology, though. It has an exciting history that everyone having an interest must know. We have mentioned a timeline from the beginning of the blockchain. In 1991, Stuart Haber and Wakefield Scott Stornetta introduced the first concept of blockchain. They introduced the idea of a cryptographically secured chain that is now referred to as blocks.
But this technology has just started getting traction and is getting global recognition. 2008 marked a pivotal point when Satoshi Nakamoto introduced an established model and planned application for blockchain technology.
We will discuss the entire evolution below.
How does a transaction add to a blockchain?
If we see the below image, the process seems to be simple. But, it is a complex task.
Whenever we have a new transaction, a new block will be added to the blockchain. For this, several nodes having identical blockchain will run algorithms that will evaluate, verify, and process the history of the blockchain.
If most nodes verify the history and the sign of the new block, it will be accepted into the ledger. Now, the new block is added to the blockchain.
But, if the block does not process as per the consensus (set of rules by which a blockchain network operates and validates the block’s information), it will get rejected.
In this way, the blockchain functions as distributed ledgers without needing a central or unifying authority to validate the blockchain transactions, making it highly secure.
Why adopt Blockchain?
We needed a bigger picture to safeguard highly confidential transactions, keep records safe, and eliminate vulnerable attacks. This is when the Blockchain enters. Several reasons can influence you and your business to opt for blockchain technology. If you are not using Blockchain, then you must read its benefits.
- Greater trust- Blockchain has enabled everyone to get accurate and timely data. Even though your confidential data is on the network, only network members can access it if they have proper access.
- Greater security- once the information is on the Blockchain, no one can delete that record. Even the system administrator cannot hamper the stored information. It will log what actions are being taken on the data.
- Improved efficiency- by eliminating the reconciliation of unnecessary records, Blockchain improves the efficiency of the transactions. For speedy transactions, it uses some rules, known as a smart contract that is stored within the Blockchain.
- Transparency- most blockchains are open-source, allowing everyone to view their codes. Due to enhanced transparency, auditors can review cryptocurrencies for security. There is no fixed authority or authorized person who is allowed to make the code change. If the majority of the users within the network support the change, the code will be updated.
- Decentralization- there is no central location for the information. Instead, the Blockchain is copied across the network. A single block change in the Blockchain will reflect on each network, making it difficult to tamper with the Blockchain.
- Reduced costs- Blockchain reduced unnecessary costs by eliminating the need for the third party to verify the transactions and their associated costs. Unlike the traditional banking system, where they charge for their transactions, there is nothing like this with Bitcoin transactions.
But, blockchain has a concept of “gas fees” given to the miners as compensation for the computing power they use to verify any transaction. This payment is done in the blockchain’s native cryptocurrency. This cost is mandatory, and you cannot make transactions without paying gas fees.
Well, this is not the end of the benefits anyone can leverage of Blockchain. Today, Blockchain is helping many sectors in the market to help their businesses grow.
It has created many attractive opportunities in the various industries.
Drawbacks of Blockchain
Despite several benefits, everyone must keep some significant drawbacks in mind while dealing with blockchain technology.
- Technology cost- though there are no intermediary charges while transactions with blockchain. However, this technology is costly due to its network’s access. Blockchain has a vast network, and being a part of that is costly. Another cost is for bitcoin mining, which means the process where a bitcoin is awarded to a computer that solves a complex algorithm. This mining process includes solving complex math problems to create new bitcoins that consume a lot of energy. This requires a special system that is too costly.
Due to this issue, many solutions are rising to help reduce the computational costs of making transactions and mining the required data within the blockchain network.
- The efficiency of data and speed- bitcoin is considered slow as the PoW system takes around 10 minutes to add a new block to the blockchain. This, in turn, reduces the number of transactions per second. Many developers have been working for years to improve this situation of deployed speed.
- Illegal activity- somehow, blockchain supports and validates illegal activity around the network. The most famous example of illegal activity is the Silk Road, an online dark web, money laundering, and others. To overcome this problem, some governments have imposed regulations and background checks on the new user’s account.
- Regulations- some crypto has regulations imposed by the government of specific regions. Some countries have banned dealing with and owning cryptocurrencies. But, out of the box, PayPal has allowed the ownership of cryptocurrencies on its platform, eliminating the imposed regulations and making it easier for people to make blockchain transactions.
Due to the increased popularity of blockchain over time, new variations of blockchain have been introduced to cater to different market needs. Let’s see what different types of blockchains available are.
If you look closely, these are not drawbacks but seem like barriers to taking blockchain down. Some other barriers to be considered are-
Types of Blockchain networks
Blockchain networks are of different types-
Public blockchain networks
In such networks, blockchain is open and accessible to everyone. In simple words, no permission is required to access such Bitcoin networks. You only need to download and install the software on your system, and your system will become a node within the blockchain public network. Then you can use your system for mining, verifying transactions, and others.
Private blockchain networks
A single entity handles such blockchain networks. These networks have restrictions on who can access them. Leading companies decide whether o constrict or expand the network. Such networks are also known as enterprise blockchains.
Hybrid blockchain networks
Hybrid means combining the benefits of both the public and private blockchain networks. To access the data and other operations on hybrid networks, you need permission for some tasks and do not need permission for others. With a network comes greater flexibility. You can access it anytime, along with some restrictions to ensure high security.
Consortium blockchain networks
A consortium blockchain is also popular as a federated blockchain. Unlike a hybrid network, this network is handled by multiple companies. It has a semi-closed ecosystem rather than having o
Just one. This network comes with high transactional speed and scalability. This is why consortium blockchain networks are highly decentralized. Not only this, you can still be a part of both private and public blockchain networks.
Blockchain security for the enterprise
To create a blockchain application, you will require many technologies to be combined and work together. Thus, to ensure security, you must implement best security practices at each technology stack. This is how you can manage access and permissions to different types of nodes.
Maintaining security is not that easy. You must work on strategies and follow the best practices to develop a secured enterprise blockchain solution. Below are some security controls you can include within your enterprise-level blockchain solutions.
- IAM (Identity and access management)
- Key security management
- Data or block privacy
- Secure and safe communication
- Smart contract security
- Transaction endorsement
Handling strong security is not a single-man job. You will require cross-skilled professionals who can efficiently design a compliant solution for your business.
Blockchain security is a complex structure, as shown below.
Blockchain security tips and best practices
Designing security strategies can be complex as you must consider several factors. So, make sure that you consider asking the following questions while designing your strategy. It will help you to come up with the right security solution.
- On what governance model can any organization join the blockchain network?
- What type of data do you want to store on the blockchain? Does it require additional security?
- What should the regulatory requirement be included, and how to ensure their working?
- How to manage different identities available on the network?
- How do encrypt the blocks?
- How do you manage and revoke keys?
- Specify the disaster recovery plan for the blockchain participants.
However, the questions are unlimited. You must stay focused and consider every minute detail while designing a security solution. It is essential as different enterprises across the globe are using blockchain. Blockchain has helped various sectors in different ways.
To know more about how blockchain has contributed to the market, we will explore its use cases in those sectors.
Blockchain use cases
Blockchain is everywhere, and people willingly invest in it due to its rising economy. Today many companies are using blockchain technology to help them reduce additional transaction costs, and improve efficiency, speed, and transparency.
Below are the use cases of blockchain applications.
- Supply Chain & Logistics- Estonian X-Road solution
- Healthcare
- Retail & eCommerce- Ethereum virtual machine
- Property & Real Estate- reduced reliability on paper-based communication, reduced costs, and scope of human error.
- Media- blockchain ensures strong data privacy, royal payments, and intellectual property piracy
- NFT marketplaces- use blockchain technology to prove digital, physical, or intellectual property ownership
- Heavy Industry & Manufacturing- scale transparency and trust through all stages of the industrial value chain, from sourcing raw materials to producing the finished product ready
- add a higher level of security by preventing data breaches by utilizing transparency and virtual incorruptibilityInternet of Things
- Personal Identity Security- drop in identity theft by keeping birth certificates, birth dates, and social security numbers.
- Smart contracts- these are real-time contracts on a blockchain that does not require any third party to verify the agreements.
Conclusion
In the coming years, blockchain technology will cover more sectors. The below image shows how the blockchain technology market will boom in the coming years globally.
The earlier digital currency failed due to security and trust issues, but blockchain has eliminated all those fears and emerged as rising colour.
So, if you have not invested or made transactions yet, you must try this once. But, make sure to read all about its pros and cons.
