With the way blockchain is thrown around as a buzzword in most technology headlines, an uninformed party might presume that it's an all-knowing artificial intelligence machine that can do anything from powering Bitcoin to tying your shoe laces. The technology can also confuse anyone who isn’t fluent in advanced IT lingo. Blockchain is the technology behind Bitcoin and other cryptocurrencies, but what does it mean?
In basic terms, blockchain is a distributed ledger system through which many computers are networked to share a common database that is continually updated across the network. This decentralized approach ensures that the digital record stays fully accurate, with zero possibility for corruption or loss over time. Each component within the blockchain is validated using consensus mechanisms to match data against versions of the same record.
Using this digital and distributed ledger approach, blockchain has created a way for data to be encrypted, transferred, and stored with virtually zero possibility of corruption due to hacking, fraudulent activities, malicious software, bugs, hard failures, or any other issues that previously created vulnerabilities within file systems.
Now that the definition of blockchain has been explained in layman’s terms, here are some ways this technology can be used to improve business analysis practices:
Developing Blockchain Solutions for Problems Discovered
Analyzing data is only half of a data analyst's job. Companies may also expect analysts to recommend possible solutions when a deficiency or shortcoming is discovered. An analyst who understands blockchain technology can make recommendations to the business to implement solutions involving this technology as there’s a lot of marketing material supporting its use.
Maintaining the Integrity of Company Records
Accurate record keeping is necessary for organizations who collect data and need to report on it. Obviously, if you're drawing conclusions and generating reports based on faulty data, your results will suffer and clients will be disappointed. Blockchain platforms effectively secure and stabilize processes related to accounting, record keeping, file sharing, and other tasks that require absolute accuracy.
Automating and Decentralizing Mission-Critical Process
Blockchain can be integrated into software-based processes to ensure utmost accuracy when automation is implemented. Alerts can be automatically sent to an administrator when a block in the chain fails to validate, thereby eliminating the possibility of inaccuracy within automated solutions. This is a fairly major breakthrough in automation that increases the potential of data accuracy.
Ensuring the Accuracy and Security of Financial Data
While web metrics, performance reports and other forms of business data should be interpreted and used as a basis for making company decisions, the most critical type of information is financial data. Blockchain-based accounting systems ensure that analysts base their work on impeccable fiscal reports. Furthermore, blockchain can be used to maintain the integrity of access logs, so any unauthorized access to a network cannot be erased.
Ultimately, the primary value of blockchain is that it ensures analysis is based on accurate data. Since accuracy and preservation are essential elements of data management, there’s many benefits to be had from utilising blockchain technology in business solutions.