The document discusses the pros and cons of blockchain technology, highlighting its potential as a decentralized and secure method for transactions that enhances trust, lowers costs, and improves data security. It outlines ten significant advantages, such as faster transactions and reduced fraud, alongside five drawbacks including scalability issues and high operational costs. Ultimately, it emphasizes the need for proper planning and expertise for effective implementation of blockchain in businesses.

1. Pros and Cons of Blockchain
Technology: Your Complete Go-to
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by Varun Bhagat / December 23, 2021

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Blockchain is the biggest opportunity set we can think of over the next decade or so –
Bob Greifeld, Nasdaq Chief Executive.
The internet has enabled a new form of collaboration between people and businesses.
This is evident in the development of so many online communities where users create,
self-govern and thrive on their terms.
Blockchain technology takes it to another level – enabling people who have no
affiliation with each other except that they use the same platform to collaborate and
transact value.
The benefits of Blockchain are many, but do you know what makes it the need of the
hour? Multiple participants manage its decentralized database known as Distributed
Ledger Technology (DLT).

3. Yes, Blockchain is a disruptive technology compared to traditional database systems.
Besides, not a single entity controls it; there is no chance of exploitation or
suppression from any one party. As a business owner, I know you might be thinking of
adopting Blockchain; however, you are still unsure about it.
To take you out of this dilemma, I am here to discuss some most prominent pros and
cons of Blockchain. So, get ready to dive deep and discover some amazing Blockchain
benefits along with some disadvantages.
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Pros and Cons of Blockchain Technolog…
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10 Major Pros of Blockchain Technology

4. 10 Major Pros of Blockchain Technology
“Blockchain is the tech. Bitcoin is merely the first mainstream manifestation of its
potential.”—Marc Kenigsberg, founder of Bitcoin Chaser.
Let’s look at the 10 most significant blockchain advantages today and why businesses
and individuals are eager to adopt the technology.
1) Enables Decentralized Trust
The fact that you don’t have to trust a third party to make a transaction is one of
blockchain’s biggest strengths. It enables people worldwide to cooperate because they
can be confident that no single party can manipulate transactions, view personal
information, or take other steps that violate their privacy and security.

5. That doesn’t mean blockchain-based applications are always secure—that depends on
how good developers are at creating secure code—but it does mean there are
opportunities for better security than in conventional applications. With blockchain,
you can feel more confident about your data and identity.
You only share what you want; companies cannot see your data without your
permission. You can also feel more confident about getting paid for providing services.
With blockchain, payment is instant; there’s no need to wait days for money orders or
checks to clear.
2) Low Cost of Operation
Low cost of operation is one of the greatest strengths of Blockchain. There are no
servers to maintain because it has no centralized authority, drastically reducing
overhead costs.
The decentralized nature also cuts out payment processing and banking fees—
transactions are peer-to-peer and don’t require a third party. There’s no third party to
monitor or enforce contracts. It is possible to embed any documents, agreements, or
transactions into a blockchain.
And finally, because blockchains are encrypted, they provide an extra layer of security
against identity theft that conventional payment systems simply cannot match.
3) No Single Point of Failure

6. With blockchain technology, there’s no single point of failure. If a hacker were to gain
access to your business’s server or database, they could very easily wipe out your
entire network—all at once.
This means that if you host files on one single network and that network goes down for
any reason, you could lose all of your data as well. Blockchain technology is
distributed, so hackers can’t break into one central network and affect every
connected account.
And blockchain has greater security than regular networks because private keys can
be much longer; a typical password is usually 8 characters long (including letters and
numbers), but passwords can be 100 characters long with blockchain! That makes it
almost impractical for hackers to crack them through brute force methods such as
guessing passwords.
4) Improved Security & Con몭dentiality

7. Being distributed across a global network of computers and protected by cryptography,
blockchain technology is inherently more secure than centralized systems.
As the Economist reports, it is tough to tamper with records once they are in there. Any
attempt to alter one record will show up immediately because copies and digital
signatures are automatically checked against each other.
In other words, your data will be secure from hackers. Blockchain networks also have
an added layer of confidentiality because transactions are impossible to trace or link
back to an individual user. Furthermore, blockchain users can choose whether their
names or email addresses appear on their transactions; if a person has chosen not to
share information on his transaction history, he remains anonymous.
This means that you can use blockchain-based services without having to worry about
advertisers tracking your activity or identity thieves accessing sensitive information
such as credit card numbers.
5) Faster Transactions
Blockchain is capable of processing much faster transactions than any traditional
bank. As a result, businesses that use blockchain instead of banks can save a

8. bank. As a result, businesses that use blockchain instead of banks can save a
considerable amount on fees.
In fact, research conducted by Deloitte has predicted that blockchain technology could
save companies up to $20 billion in banking fees per year by 2022.
This cost reduction is due to blockchain’s decentralized structure, which doesn’t
require massive data centers and expensive third-party verification. Plus, it doesn’t
need the same number of employees.
6) Reduces Fraud
Blockchain technology has some fantastic attributes that make it ideal for financial
institutions to reduce forgery. Because a digital ledger has every transaction, it’s not

9. possible for anyone to double-spend their currency.
Each block store the financial information and if there is any modification made to a
previous block, other nodes on the network reject it.
This means once your bank confirms your money was transferred, they can’t go back
and say they never received it. On top of that, you would be able to see that fraudulent
activity happened when another node changed transactions.
Before going to my next point, I want to give crucial advice to companies who wish to
deploy Blockchain within their organization. What is that? Since the technology is not
so old and needs expertise, always hire a trusted Blockchain development company in
India.
7) Transparent & Universal Recording System
Once any transaction occurs within a blockchain, it is recorded in a public ledger, which
anyone can view. This means that anybody can see how many coins are stored at a
particular wallet address, but they can’t tell who owns that specific wallet address.
A wallet could be tied to an individual or group. Still, if users want to remain
anonymous, they must transfer their Bitcoins to another address (e.g., a different
Bitcoin wallet) that isn’t linked with their real identity.
But even without anonymity features enabled, blockchain tech provides more
transparency than traditional payment methods like credit cards and checks; you don’t
need a bank intermediary (or permission from one) to see what or whom you paid or
received money from.
Also Read: 13 Questions To Ask Before You Hire a Software Development Team
8) Better Accessibility
A blockchain allows anyone with a computer and an internet connection to be part of

10. its network. It is decentralized, which means any single entity can’t control it—and
that everyone has equal access to it.
Anyone can make changes (add information) or add new blocks (to store data) to a
blockchain, provided they know how to do so. Even tech-illiterate individuals have
some access to blockchains! This openness makes blockchains much more accessible
than traditional institutions like banks and financial services.
That doesn’t mean you shouldn’t be wary when dealing with blockchain providers: you
should always research your choices before making any significant financial decisions.
9) Prevents Double Spending
Bitcoin transactions are verified by network nodes through cryptography and recorded
in a public distributed ledger called a blockchain. This ensures safety by eliminating
direct access to your money. With bitcoin, double spending is prevented (i.e., no one
can spend money you don’t have).
That’s why some people say bitcoin is fungible—its value is equal even if its physical
form changes. In other words, unlike fiat currency like U.S. dollars or euros that get
their value from an organization’s financial standing, bitcoins derive their worth from
mathematics alone.
It may sound silly to think about an individual bitcoin as being identical to any other
bitcoin, but it’s true; every single bitcoin carries with it all of its transactional histories
within that particular blockchain framework.
Once you own a bitcoin, though, it’s yours forever; there’s no threat of anyone ever
taking that away from you. And once again: since there’s so much debate surrounding
how many bitcoins will be released over time, there is only one way to find out-by
buying them!
10) Seamless Integration Into Existing Systems
Blockchain offers businesses a way to integrate their current financial systems with

11. Blockchain offers businesses a way to integrate their current financial systems with
outside networks seamlessly. It is possible to do in two ways: Blockchain as a Service
(BaaS) and blockchain application platforms.
BaaS offers organizations using cloud services a secure connection to blockchain
networks, while blockchain application platforms allow anyone – even those without
cloud services – to make use of blockchain technology. The integration process is
much more seamless than other means of blockchain access.
Blockchain as a Service allows businesses to connect directly with blockchain
networks, giving them immediate access to all that these decentralized ledgers have
to offer. It doesn’t force you to use one blockchain or another, and it gives you a higher
level of control than some other methods.
Additionally, BaaS is typically quicker and easier to set up than other services, making
it ideal for organizations that may need blockchains immediately, such as supply chain
management applications.
5 Major Cons of Blockchain Technology
1) Scalability
Currently, blockchain can only handle a small number of transactions per second. This

12. means that if a platform like Bitcoin were to process Visa’s peak volume of 4,000
transactions per second, it would take more than eight full days for all transactions to
be finalized. There are several proposed solutions for scaling blockchains, but none
have been adopted in any meaningful way yet.
2) Security
As a distributed ledger, blockchain is publicly accessible. While there are provisions to
add privacy and encryption layers to blockchains, they’re not commonplace yet. As
such, everything you do on a blockchain can be monitored by anyone with an internet
connection. That may be a con for some users who would prefer more privacy.
Moreover, much of your data is linked directly to your digital identity (i.e., public keys),
so it could potentially expose parts of your private life that you wouldn’t necessarily
want online. Security concerns often lead people to trust third-party solutions (like
exchanges) over direct blockchain transactions, relinquishing control over personal
assets.
3) Cost
One of the biggest problems with blockchain technology is that it requires enormous
energy. Because miners have to solve complicated math problems to get a payout, they
need powerful rigs that consume tons of electricity.
As a result, some blockchains are incredibly costly to run, especially for smaller
businesses or individuals. And you’re not going to be able to change your mind later; if
you want your blockchain online, you need to pay for it up front!
4) Competitiveness
With all these industries trying to use blockchain, there’s a lot of hype surrounding it.
This can create unnecessary competition between businesses, which can be harmful
to those trying to implement it professionally and is harming some companies by
wasting time, money, and effort on technology that isn’t even needed. Companies will
have no alternative but to invest heavily to keep up with their competitors.

13. have no alternative but to invest heavily to keep up with their competitors.
5) Speed
The other significant con to blockchain technology is its speed. Compared to a
centralized database, blockchains require miners—or people with high-end computers
and dedicated software which solve computational puzzles in exchange for new crypto
tokens.
If explained simply, blockchain transactions take longer than traditional payment
methods like cash or credit cards. This can be discouraging if you’re interested in
using blockchain technology as a daily payment method.
Final Thoughts
Blockchain technology is a revolutionary way of storing and transferring data. While it
has its share of cons, it is possible to rectify most of them with the right planning and
execution. The current state of blockchain technology makes it the best suit for
businesses that want to take advantage of its distributed ledger features. However, the
technology is not simple as it seems to be. Hence, I would once again recommend you
to hire Blockchain developers with experience and the right skills. Otherwise, your
business may suffer.
Have any further queries? Mention them in the comment section below!

14. Frequently Asked Questions
Question 1: How long does it take to create a blockchain?
The time varies depending on several factors, but the most important factor is whether
you want proof of work (POW) or proof of stake (POS). With POW, there are proof-of-
work algorithms that must be computed. With POS, the creator of the next block is
chosen through a lottery system depending on the size of their holdings. There is no
set time for this process.
Question 2: How much does it cost to create a blockchain?
It depends on which blockchain you want to create. For Bitcoin, the estimated cost is
around $26 million. For Ethereum, it would be less than $2 million.
Question 3: What are some of the pros and cons of blockchain technology?
The pros are that it’s secure, transparent, and efficient. The cons are that it’s not very
private, expensive to implement, and slows the network.
Question 4: What are some examples of companies that use blockchain?
Blockchain is being used by companies in various industries, including banking, real
estate, financial services, insurance, healthcare, retail, and more. It can be
implemented at the enterprise level or the consumer level.

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Question 5: What is the difference between a blockchain and a distributed ledger?
A blockchain is a type of distributed ledger. Distributed ledgers can have various
structures, including blockchains, but not all blockchains are distributed ledgers. In
addition, not all distributed ledgers are blockchains. For example, Ripple is a
distributed ledger but does not use blockchain technology. Conversely, Ethereum is a
blockchain but does not use distributed ledger technology.
Question 6: How do I get started with blockchain?
If you want to get started with blockchain, you need to first understand the basics of
cryptocurrencies and how they work. After that, you can explore various platforms and
software that allow you to create your own blockchain. You can also find helpful
resources online to get you started.
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