Blockchain vs Centralized Database

Blockchain is a game changer because it is decentralized. The majority of database solutions are currently centralized, meaning that they have one central database. Central databases are both inefficient and insecure. A decentralized database is a data system that has more than one database.

What exactly does decentralized mean?

Blockchain is a system of blocks that are all connected. Imagine that I had an application that was built with blockchain for a grocery shopping list. You and your partner both had this application on your phones and decided to go to separate stores. With blockchain, the moment you checked something off on your list… it would be checked off on your partners. The information is both stored and directly connected on each phone. A traditional centralized database could produce the same results… but at a much less efficient rate. This, of course, is the extreme simplification. As you can see in the above example a centralized database system has only one database that all information is drawn to and from. Decentralized data systems like blockchain have many and they are all directly and securely connected.

Pros and Cons.

A centralized database system has pretty much only one pro, you know where your data is at all times. The drawbacks of using a centralized database are many and most IT guys can relate. Servers are expensive, limited storage capabilities, extremely vulnerable, backup is required, and time.

Blockchains decentralized system solves most of these problems. We see this in the perfect and most famous example which is bitcoin. Blockchain is not centralized and that means if your server crashes, you don’t crash with it. It also means that it is much more secure. There is no one server to hack and if you happened to find a block it would be incredibly hard to decrypt. Blockchain is also much faster and helps eliminate the error.

Blockchain is so powerful that it is estimated it will reduce bank infrastructure cost by 30% and save banks an estimated $12 Billion. In fact, 90% of banks are already exploring blockchain options.

IBM was quick to realize the potential that blockchain has and invested $200 Million in their new blockchain department.

Every industry needs it.

IBM is working on creating solutions for every single industry. If you are in business, then you are online and your data is the most important thing. Just like it is expected to save banks $12 Billion, it is also expected to reduce data operating cost by an estimated 40% across the board. These savings are spread out across things like security cost, error cost, speed cost, and energy cost.

Blockchain has so many benefits. Every transaction is validated, making it secure. Blockchain eliminates security threats and the need for a 3rd party peer-to-peer system. All data is consistently available to users, more accurate, and complete. Transaction times are reduced to only minutes and constantly available. Blockchain decentralized system is also less likely to be hacked. All of these benefits and more are the reasons that companies that use, move, or create data should be using blockchain.

Who is using it now?

Nasdaq is currently working to implement blockchain into their private market platform. They are creating Nasdaq Linq, a digital ledger technology that will use blockchain to facilitate the issuance, cataloging, and recording of transfers of shares. Blockchain will give everybody involved more comprehensive historical records of issuance and transfer securities. Blockchain is not a spreadsheet that can be edited or changed. It will protect investors and bring transparency.

Federal Reserve is already working with IBM to create a new digital payment system using blockchain.

Santander bank is also putting together a blockchain team and exploring opportunities to reduce infrastructure cost.

ASX Australia’s biggest stock exchange is developing a privately distributed ledger solutions with AUD and has already paid $14.9 Million for a 5% equity interest in digital asset holdings.

Those who aren’t taking blockchain seriously aren’t paying attention. These companies understand the importance of data and use, move, and store large amounts. Blockchain is proven and it is already being implemented.

Those who are too late.

When technology leaps forward, power shifts. Those who are not exploring blockchain now are falling behind. This is the data era. Every company running today creates, moves, and stores data. Even dairy farms which are becoming more and more automated use data. This data is essential to your company and the technology that is creating, moving, and storing this data is just as important. The numbers add up, the technology is here, so what are you waiting for?

Where to start.

Start by finding a consultant that you can trust. GoIoT.co is a trusted firm with years of experience and a reputation that we are proud of. We offer completely free consulting. Above all, we believe in educating, not selling. We will help you determine if blockchain is a good fit for your company, educate you on your options, and share our experience with you. Contact us today for your free consultation.

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