A blockchain development company provides start-ups with training, mentoring, funding and networking opportunities to help them get established. They are an important part of the growth of the cryptocurrency field.
The technology they use provides both businesses and individuals with a range of benefits, from better security to fewer processing fees. However it also comes with some drawbacks. This article will examine the pros and cons of blockchain development company technology.
Pros
Some of the main advantages of the technology are:
Security
The technology is decentralised, which means that its information is not stored in a specific, or ‘central’, location. The data is shared across a network of computers and is updated whenever a change is made. This decentralisation makes it difficult for people to hack into and modify the data, and makes it hard for the whole network to be compromised. This makes any information stored within the system highly secure.
Low fees
When a customer goes through a bank or other third-party, they are typically required to pay a fee for their services. This includes the use of things like credit cards, as their bank charges a fee for processing a transaction. Blockchain development company technology, however, doesn’t have a central authority which means that fees are limited to non-existent. This means that customers can save money.
Privacy
While the system uses a public database (meaning anyone with access to the internet can see the entire transaction history), actual personal information about the user cannot be seen. The network uses public keys (or ‘codes’) rather than personal data, which means that this information cannot be accessed by hackers. This makes transactions private.
Accuracy
Transactions within the blockchain development company technology system are approved by thousands – potentially even millions – of computers across the network. This gets rid of the need for human involvement, making verification less prone to human error. If one computer makes an error, this error would only apply to a single copy and not the majority. This makes information on the system highly accurate.
Speed
One of the greatest benefits of this technology is the speed at which transactions can occur. Transactions which take place through a central authority such as a bank may take several days to be completed, meaning customers have to wait a long time to access their money. Transactions made using blockchain development company technology can be settled in just ten minutes and are secure after just a few hours. This can be done at any time (including weekends and public holidays!), which makes it highly convenient. It is also of great benefit to those doing cross-border trade, as the process is made much faster regardless of time-zone issues.
Cons
There are several disadvantages of blockchain development company technology to be aware of. These are not just technical concerns but political ones, and they include:
Making illegal trade easier
The system’s confidentiality is a double-edged sword; while it protects user’s identity, it also lets illegal trading occur. Illegal purchases cannot be tracked, making it of great concern to both the government and the public.
Susceptibility to attack
New cryptocurrencies and networks may be more prone to 51% attacks in which hackers rent computational power in order to gain majority control of a network. This can result in the loss of hundreds of thousands of dollars.
Power costs
While blockchain development company technology limits the need for transactional fees, the amount of electricity required to operate the network can be quite costly. For instance, mining a single bitcoin can cost anywhere from around $530 to $26,000 in energy expenditure.