What does blockchain solve?

A blockchain performs various functions. We will discuss each of them briefly here and in detail later:

• Security: Due to its consensus structure and multiple failback points, there is minimum chance of failure. Its distributed nature gives better security and reliability.
• Faster settlements: Traditional banking protocols are very time-consuming and incur fairly large forex charges; on the other hand, Bitcoins based on blockchain offer near-instant speed, saving time and costs for the entire financial industry.
• Transparency: Being decentralized in nature, there is no need for a third party, as blockchain is shared with everyone with a wallet, making it a transparent system with trust.
• Economical: Having no third party and the ledger being shared by everyone means no overhead costs or auditing expenses.

The following diagram depicts the difference between centralized, decentralized, and distributed networks:

Being distributed in nature, blockchain offers lots of out-of-the-box features, such as high stability, security, scalability, and other features discussed previously.