Since Bitcoin catapulted Blockchain into the limelight and it’s been widely touted for its potential to transform the industry, there is no denying that small businesses can use blockchain technology to transform themselves.
The benefits of Blockchain technology are far-reaching — no matter your industry, and it is predicted to expand into a $39 billion industry in the next four years.
So it would be most reasonable to consider the power of Blockchain technology and understand more about casting your business model into the future with broad scope for easy optimization and operations with the support of Blockchain technology.
Must read – Do you know biggest blockchain myths?
What is Blockchain Technology, and how does this technology work?
So first thing first. Blockchain technology is not a cryptocurrency; however, Blockchain technology supports cryptocurrency transactions. Some people also confuse blockchain with machine learning or artificial intelligence. Finally, it’s not a programming language, and it’s also not a cryptographic codification.
A blockchain is an ever-growing list of digital data records. Such a list comprises many data blocks, organized in chronological order, and linked and secured by cryptographic evidence. By nature, it’s a digital ledger of economic transactions, capable of documenting all types of transactions as they occur — and they are not just financial data. Blockchain technology virtually records anything of value.
Transactions recorded on Blockchain do not need any form of validation or authenticity. This implies that one can store anything on the Blockchain without ever changing it, making the information unchangeable.
Benefits of Blockchain Technology for Business
Blockchain Technology is incredibly diverse. It’s so diverse that it can be applied in almost any business today—businesses like e-commerce, mining, logistics, transport, and healthcare. The list is inexhaustible.
Understanding Blockchain technology can help the business owner understand and assess how it can benefit their business. Let’s look at the top 10 benefits of Blockchain Technology for business:
- Greater Transparency & Openness
The transaction data are recorded identically in multiple locations with pre-approved access to view. The members can view the transaction history as the recorded data has time and date stamped. This is one of the most notable features of Blockchain, and its ledger is available for viewing by the public.
Each organization must keep a separate database if they don’t have blockchain technology. While blockchain uses a distributed ledger; data and transactions are recorded identically in numerous locations.
- Increased Efficiency
Blockchain ends the need for intermediaries or a third party by replacing the manual processes. It has made managing transaction processes much faster than old methods. However, the speed of blockchain-based systems may depend on various factors, such as network traffic, data block size, and more. Still, specialists believe that Blockchain boosts faster transactions.
When the business follows traditional trading practices, everything is a time-consuming process prone to human errors and often requires intermediaries. By simplifying these processes with Blockchain technology, transactions can be conducted faster and more efficiently.
- Improved Traceability
If a company deals in products through a complex supply chain on a daily basis, one must know how hard it can get to trace an item back to its origin through inventory.
On the other hand, transactions of goods are recorded on a blockchain, and the audit trail indicates where an asset came from and every stop it took throughout its journey. This transaction data record will help the business verify the authenticity of assets and their whereabouts and prevent fraud.
Blockchain tech makes an audit trail of the asset with the date and timestamp of its journey. In an industry troubled by counterfeiting and fraud — this assists in providing the evidence. Tracing data can also expose weaknesses in any supply chain management process.
- Finer Security
Record-keeping of Blockchain is more secure than any other record-keeping system. However, the transactions must be agreed upon before transactions are recorded in the Blockchain. The data is encrypted and linked to the previous transaction as the transaction is approved. Information is stored over a vast network of computers instead of a single server, making it hard for hackers to compromise transaction data.
Protecting sensitive data is crucial in any industry — Blockchain has an opportunity to change how vital details are shared by helping prevent fraud and unauthorized activity.
- Fraud Control
A system in which the data is kept in multiple places instead of one is immune to hackers’ attacks. It’s not easy for hackers to access the information, and even if they get access, the data can quickly be recovered.
Fraudsters use various methods to hide their criminal activities, including deleting or altering information in a company’s systems. But using an interconnected digital ledger can help reduce fraud. It raises the transparency and visibility of the transactions made throughout a supply chain and between business network associates.
- Reduced Costs
As per the study by Mckinsey, the 70% value of Blockchain has been referred to as cost reduction, followed by income generation and capital relief. This can change the flow of value by capturing lost revenue and creating new revenue for Blockchain service providers.
Organizations using Blockchain can bring down expenses associated with third-party vendors. There is no inherited centralized player, and there is no need to pay for vendor costs. Furthermore, less interaction is required when validating a transaction, removing the need to invest more money or do basic stuff.
Blockchain Technology can have the disruptive potential of being the basis of unique operating models. However, its initial impact will push operational efficiencies. It will allow removing costs associated with infrastructure and operational parts of the energy sector.
It’s one of the main attributes of Blockchain. It tells that once recorded; data cannot be deleted or modified. All trades are immutably recorded in the Blockchain with timestamp and date-stamp, creating a permanent record.
It also presents a secure and reliable information audit used to track the data over a period.
Blockchain enables the transaction to be automated as it raises the efficiency and pace of the process. It automatically runs the next step of the transaction once the last transaction is completed. Automation in Blockchain lessens human intervention and reliance on third parties to certify the contract terms.
Blockchain operates on the decentralization approach, which means its operation decision-making duties are split into a hierarchy.
For example, it is used in supply chain management, where there is a system chain from suppliers to producers, distributors, and retailers. There is no party in the center acting in Blockchain as it enables sharing of data within the business ecosystem.
Business leaders of diverse industries keep exploring new ideas and technology that can provide them with overall solutions. Blockchain-based techniques can assist organizations in working smarter and innovating faster. And enforcing blockchain technology in the system fixes many solving obstinate questions.
Must read – How to make a Successful Career in Blockchain?
Blockchain technology is valuable in almost every industry. Many businesses are actively executing this tech for assistance in their processes. Now that you have realized the potential of this technology, you can make well-informed decisions for your business.
Author Bio: Ryan Allen is a content writer @ GoodFirms – a rating agency that offers a level playing field to all software development and mobile app development companies. He has a Master’s degree in Journalism and is an avid non-fiction reader.