Why Blockchain Is Important in Modern Technology? 24 Key Reasons You Should Know in 2025

Blockchain is a decentralized digital ledger technology that stores data across multiple computers, making it secure and transparent. Its features like decentralization, security, and immutability make it a valuable tool for industries like finance, where data security is essential for efficient operations. 

The adoption of blockchain in industries involved in the global supply chain is projected to increase by 15% over the next four years. This growing trend can be attributed to blockchain’s core features, such as distributed ledger and cryptographic encryption, which are critical for industries that prioritize security and data integrity.

24 Key Reasons Why Blockchain Is Important in Today’s World

Blockchain’s features like decentralization, security, and its role in enabling new economic models (like cryptocurrencies and DAOs) are making it popular today. In industries like manufacturing, blockchain helps create tamper-proof data that end users can verify.

Here are the key reasons why blockchain is important.

1. Enhanced Blockchain Security

Every transaction is encrypted and recorded in a block, which is then linked to the previous one using hashing. Features like cryptographic algorithms (SHA-256) prevent unauthorized actors from making changes to the ledger.

Example: Blockchain platforms like JPMorgan’s Quorum or Citi’s Settlement Network allow secure and transparent financial transactions. Even if a hacker manages to infiltrate one part of the network, they cannot change the transaction history without altering all blocks.

2. Trust and Transparency 

Blockchain's transparency stems from its public ledger that is visible to all participants. Every participant can independently verify transactions without relying on a central authority. Since multiple participants are involved in verifying transactions, you cannot alter the transaction history without detection. 

Example: In supply chain management, companies like Walmart and De Beers use blockchain to track products from their origin to retail. This builds customers' trust as they can verify that the supply chain is free of fraud, as every step is recorded and visible on the blockchain.

3. Cost-Effective

Blockchain does not need intermediaries such as banks, lawyers, or brokers by enabling peer-to-peer transactions between participants. This reduces costs in industries with high transaction fees, such as finance.

Example: In cross-border payments, services like Ripple use blockchain to enable faster and cheaper money transfers. There is no involvement of banks, thus saving service charges.

4. Faster Transactions

Blockchain speeds up transactions by removing intermediaries like banks or brokers. In addition, automated smart contracts execute transactions when certain conditions are met, reducing processing time.

Example: For cryptocurrency transactions, Bitcoin enables transactions to be verified and completed within minutes, compared to the hours or days needed by traditional financial systems. 

Ethereum uses smart contracts to automatically trigger actions (e.g., fund transfer and ownership changes) once certain conditions are met.

5. Improved Financial Efficiency

Using smart contracts in blockchain enables seamless execution of financial operations like loans, payments, or asset transfers. This reduces manual intervention and speeds up the process.

Example: Platforms like Aave or Compound use blockchain to offer lending and borrowing without traditional banks. They automatically execute contracts for lending and borrowing based on smart contracts.

6. Fraud Prevention

Blockchain distributes the data across multiple nodes (computers), making it highly resistant to tampering. The data is cryptographically sealed in a block, and every block is linked to the previous one, creating a chain of events that cannot be modified without detection.

Example: In the diamond industry, Everledger uses blockchain to create a digital ledger of diamonds. Each transaction related to the diamond is recorded on the blockchain, making it impossible for fake diamonds to enter the market.

7. Growing Use of Blockchain Tokens

Cryptocurrencies and non-fungible tokens (NFTs) are used as digital assets that can represent access rights, ownership, or value. Their secure, transparent, and easily transferable nature makes these tokens popular.

Example: Artists can tokenize their work on blockchain platforms like OpenSea or Rarible, allowing you to purchase, sell, or trade digital artwork in a transparent and secure marketplace. 

Learn how to create, buy, and sell unique digital assets. Enroll in upGrad's Non-Fungible Tokens (NFT) Courses and be a part of the future of digital art.

8. Potential for Innovation

Emerging technologies like decentralized applications (dApps), smart contracts, and NFT have the potential to start new business models, such as peer-to-peer lending. These technologies, supported by blockchain, make it a popular choice for innovators.

Example: On the Ethereum blockchain, decentralized applications like Uniswap have changed cryptocurrency trade. Rather than relying on centralized exchanges like Coinbase, you can trade directly from your wallets without intermediaries. 

9. No Intermediaries

In most cases, the peer-to-peer nature of blockchain allows individuals or businesses to interact without relying on third-party organizations. You can transfer funds, avail loans, or lend money without waiting for intermediaries like finance companies or banks.

Example: In real estate transactions, blockchain platforms like Propy allow buyers and sellers to interact directly without the need for real estate agents. This reduces the risk of human error and fraud.

10. Wide Range of Applications

Blockchain is used in applications like healthcare (storing patient records securely), supply chain (origin of product), and finance (cryptocurrency transactions).

Example: In healthcare, MedRec uses blockchain to manage and share medical records securely, thus reducing errors and improving patient care.

Also Read: Top 10 Blockchain Applications in 2024

11. Role in Internet of Things (IoT)

IoT devices operate in decentralized, distributed environments where security is critical.  Blockchain stores this IoT data and ensures that data exchanged between devices is secure, transparent, and tamper-proof.

Example: The IOTA blockchain platform ensures connected devices like traffic lights, meters, and sensors communicate with each other without the risk of tampering or fraud.

12. Smart Contracts

Smart contracts are a type of self-executing contract where the terms of the agreement are directly written into code. By integrating it with blockchain, contracts are executed exactly as agreed upon by all parties without the risk of tampering or the need for intermediaries.

Example: In real estate transactions, blockchain platforms like Propy use smart contracts to automate the transfer of property ownership. Once the terms of the contract are met (e.g., payment made, title verified), there is no need for intervention.

13. Versatility Across Industries

Blockchain’s use in sectors like finance, healthcare, and manufacturing helps address issues such as preventing fraud, maintaining data integrity, and ensuring accountability.

Example: In the automotive industry, companies like BMW and Mercedes-Benz are using blockchain to track and authenticate car parts. This prevents the use of counterfeit parts, improving safety and reducing the risk of fraud. 

14. Decentralized Autonomous Organizations (DAOs)

A Decentralized Autonomous Organization (DAO) works without a central governing body, instead using blockchain to manage rules, voting, and decision-making processes. The use of blockchain ensures decisions are transparent and verifiable.

Example: The DAO, a venture capital fund, operates autonomously, with members making decisions through voting mechanisms encoded on the blockchain.

15. Managing Sensitive Records

Blockchain can store sensitive records, such as credit card numbers, ensuring that it is secure and cannot be tampered with. This is crucial in sectors like healthcare, government, and finance, where misuse of data can have consequences, like financial losses.

Example: In healthcare, Guardtime uses blockchain to ensure that patient records cannot be altered after entry, protecting against fraud or unauthorized changes.

16. Significant Cost Savings

Blockchain removes the need for middlemen such as brokers, banks, and legal services. Businesses can cut transaction costs, improve efficiency, and automate repetitive tasks, such as processing payments manually.

Example: In cross-border payments, companies like Ripple provide blockchain-based solutions that allow companies to transfer money internationally at a fraction of the cost of traditional banking systems.

17. Financial Privacy

Blockchain uses cryptographic techniques such as zero-knowledge proofs (ZKPs) and ring signatures. This allows you to carry out transactions without revealing sensitive information like transaction amounts, sender/receiver identities, or account balances. 

Example: In cryptocurrencies, platforms like Monero and Zcash use advanced cryptographic techniques for making transaction details—such as the sender, receiver, and transaction amount—remain private. 

18. Preventing Cyber Threats

Each transaction on the blockchain is time-stamped and encrypted using strong cryptographic algorithms. In addition, Proof of Work ensures that every transaction is legitimate before being added to the blockchain.

Example: In the banking industry, Chainalysis analyzes blockchain transaction data and identifies potential security threats in real time. 

Master the skills to safeguard your applications and data from threats. Join the free course on Fundamentals of Cybersecurity.

19. Empowering Individuals

Blockchain technology, like cryptocurrency, allows you to send or receive funds without needing a third party like a bank. Wallets are directly controlled by individuals, and private keys grant full ownership over the funds.

Example: In cryptocurrency, Bitcoin and Ethereum allow you to send, receive, or store in your digital wallets. You don't have to rely on centralized banks or financial institutions to make transactions.

20. Authenticity and Provenance

Every transaction recorded on a blockchain cannot be altered due to the involvement of multiple authenticators. You can trace back the origin or transaction, allowing for better control over quality and compliance with regulations.

Example: Everledger uses blockchain to track the origin of diamonds. Each diamond is assigned a unique ID and recorded on the blockchain with information about its origin, ownership, and transaction history.

21. Creating Digital Records

Every transaction or entry on the blockchain is time-stamped, encrypted, and linked to previous transactions, creating a permanent and unalterable record. 

Example: In real estate, platforms like Propy use blockchain to create secure digital records of property transactions. Every time a property is sold or bought, a transaction is recorded, which can be verified by buyers.

22. Revolutionizing Crowdfunding

Peer-to-peer transactions using Initial Coin Offerings (ICOs) or Security Token Offerings (STOs) reduce the need for intermediaries such as banks or financial institutions. 

Example: In the tech industry, Ethereum has been used for several successful ICOs, where investors can directly contribute to the development of startups in exchange for tokens. 

23. Improving Traceability

Blockchain’s immutable and transparent ledger tracks products or transactions at every stage of the supply chain, ensuring that all data is securely recorded and accessible. The decentralized nature of blockchain makes it harder to manipulate or falsify records.

Example: In the pharmaceutical sector, companies like MediLedger use blockchain to monitor the movement of prescription drugs from manufacturer to pharmacy. Each drug batch is given a unique identifier recorded on the blockchain, preventing counterfeit drugs from entering the market. 

Also Read: Blockchain Applications in Supply Chain

24. Immutable Records

Once information is added, it cannot be altered without changing every subsequent block, which would require consensus from the majority of the network. 

Example: In financial transactions using Bitcoin, each transaction is verified by miners through Proof of Work and then permanently recorded on the blockchain. You cannot alter or erase transaction history, making it a reliable, tamper-proof record system.

Also Read: Blockchain Technology in Cryptocurrency: Benefits, Challenges & Structure

Diverse applications in finance, healthcare, supply chain management, and art make blockchain technology a potential tool for future growth. Now, let's explore how blockchain technology is transforming various industries.

Importance of Blockchain Technology Across Various Industries

Blockchain’s use for fast cross-border transactions, managing patient data securely, and tracking products make it a popular choice for industries like finance, healthcare, and manufacturing.

Here’s the importance of blockchain technology for industries.

Blockchain’s applications span across industries, from finance to manufacturing. However, it is most popularly used for cryptocurrency. Let’s explore why is blockchain important for cryptocurrency.

Why is Blockchain Important for Cryptocurrency? 

Blockchain records transactions across a network of computers, ensuring transparency and eliminating the need for intermediaries like banks. Cryptocurrencies like Bitcoin, Ethereum, and stablecoins utilize this technology to operate securely and transparently.

While Bitcoin focuses on decentralized value transfer, Ethereum expands blockchain's capabilities by enabling smart contracts and decentralized applications (dApps).

Let's examine why blockchain is crucial for the functioning of cryptocurrencies.

• Decentralized Control

In cryptocurrency, transactions are validated by miners through a consensus mechanism called Proof of Work and Proof of Stake. 

Proof of work ensures that control over the blockchain is distributed across numerous participants. In Proof of Stake, validators are selected at random (though weighted by stake) to validate transactions. 

This decentralization makes cryptocurrencies resistant to manipulation or control by any single entity, such as governments or financial institutions.

• Secure Transactions

Each transaction on a blockchain is encrypted and linked to the previous transaction. This cryptographic structure makes it virtually impossible to alter any recorded data.

When a cryptocurrency transaction is initiated, it is verified by multiple network participants (nodes) before being added to the blockchain, ensuring that the transaction is valid and secure.

• Transparency and Immutability

Since the data is stored on a decentralized network, it is tamper-resistant. Once data is added to the blockchain, it is encrypted and linked to previous blocks, making it difficult to alter or erase.

Cryptographic hashing (SHA-256) is used to link to the previous block’s hash, creating a secure chain of blocks.

However, some blockchains, like Ethereum, allow for updates and modifications through mechanisms like hard forks.

Also Read: How Does Cryptocurrency Work? A Beginner's Guide for 2025

Ready to leap into the world of blockchain? Let's see how upGrad can help you on your learning journey.

How Can upGrad Support Your Growth in Learning Blockchain Technology?

The applications of blockchain range from cryptocurrencies like Bitcoin to supply chain management, healthcare, finance, and even government operations. Whether you’re planning to work in cybersecurity, data analytics, or smart contract development, blockchain expertise can be beneficial.

To build knowledge, upGrad's courses can be a good starting point. These courses will equip you with the skills needed for future study in this field.

Here are the courses offered by upGrad in blockchain and related technologies.

• Blockchain Features Simplified
• Introduction to Cryptocurrency
• Blockchain: A Quick Introduction
• Introduction to NFTs

Do you need help deciding which courses can help you in blockchain? Contact upGrad for personalized counseling and valuable insights. For more details, you can also visit your nearest upGrad offline center.

Similar Read:

• What is Cryptocurrency Mining? How Does it Work?
• Top 10 Tools for Blockchain Development You Should Know

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Reference Link:

https://www.sdcexec.com/software-technology/emerging-technologies/article/22888075/aventus-how-blockchain-is-transforming-global-supply-chains