Blockchain and its pros and cons

What is blockchain?

What is the blockchain that is the basis of cryptocurrency?

It is a ledger management technology based on distributed computing technology in which small-scale data called 'blocks' are stored in a distributed data storage environment based on chain-shaped links created based on the P2P method, so that no one can modify them arbitrarily and the results of changes can be viewed.

>> Then, let’s interpret the above definitions one by one.

P2P (peer-to-peer network) is a communication network between equal layers. It refers to a communication network made up of equal nodes without the concept of client and server. It is the opposite of centralized management.

And the key point here is that ‘anyone cannot arbitrarily modify it and the results of the change can be viewed.’

The concept of blockchain is to realize free transactions between parties. In the existing financial transaction system, all transactions are supervised by the bank and go through a process that allows the bank to know the traders' abilities and credit information and approve the transaction. In other words, it is under the monopoly of banks. If financial transactions take place without a bank, what should be done to ensure security and stability? Rather than hiding all transactions through security, on the contrary, all transaction details are made visible to all parties involved in the transaction. That is, anyone can view it. Instead, if anyone is prevented from making arbitrary changes, the authority to supervise transactions is given to all traders without being under the control of the bank.

Distributed computing is a field of computing science that studies distributed systems. It is a distributed processing model that attempts to solve huge computational problems by sending messages from one to another using the processing power of multiple computers connected to the Internet. Simply put, it is to increase computational processing power by implementing high-capacity super computing with multiple computers.

then! Let’s compare blockchain with the existing ledger management method.

1. Blockchain is different in that transactions occur between parties without a third party.

2. User trust can be maintained with open source technology. This is in contrast to the closed aspect of banking transactions.

3. Costs are reduced because there is no intervention other than the parties involved.

4. Hacking is difficult because all parties to the blockchain can view transaction details, and it is difficult to control all nodes, making it difficult for malicious acts to occur.

5. Blockchain itself requires more understanding from a technical perspective, but is highly scalable to add new features and functions.

6. It is more secure when storing information because it is resilient to data change or deletion.

Pros and Cons of Blockchain

Advantages of blockchain

Security is improved, costs are reduced, transaction speeds are increased, and visibility is maximized.

Here, the transaction speed is a transaction that excludes third parties, which improves the processing speed of the entire system. Maximizing visibility is that it is possible to monitor multiple nodes of the distributed ledger.

Disadvantages of Blockchain

Because transaction verification is an anonymous verifier for each node, it is difficult to prove transactions across multiple nodes. It is inefficient because all participating computers must have all the data. And considering only blockchain technology, it can be said that there is scalability to add new technological functions, but in reality, not all transactions are applied to blockchain technology, so there are limitations to expansion. Private information is exposed. Since all nodes are viewable, there is a privacy risk.

History of blockchain | Binance Academy

Window of Statistics 2018 Winter Issue

Blockchain - Wikipedia, the free encyclopedia

7 differences between bank ledger management and blockchain - ZDNet korea

What is distributed computing?. Technology story told by Uranus | by Uranus Official | Uranus_Korea | Medium

Let’s look at the characteristics and pros and cons of blockchain technology. — Steemit