Most people associate the word blockchain with Bitcoin or cryptocurrencies, and rightly so. It was developed to give Bitcoin and other cryptocurrencies a level of legitimacy necessary to gain mainstream acceptance.
But blockchain is much more than just a ledger for Bitcoin and other cryptocurrency transactions. In fact, blockchain can actually change the way we do business – for the better.
Bitcoin is mined, stored, and/or traded on markets such as Coinmama. All the transactions that occur through the cryptomarkets are stored on the blockchain ledger. And every transaction is verified through multiple, independent users.
However, that’s not what we are talking about today. Today we are going to talk about the benefits of blockchain for businesses. But before we jump into the benefits of blockchain for a business, let’s discuss what blockchain really is.
What Is Blockchain?
In simple terms, blockchain is an electronic ledger that is used to track transactions in sequential order. It is used to connect multiple transactions, from multiple parties, into an easy-to-follow record book.
Blockchain uses cryptographic digital keys to record every digital transaction made using the ledger for each specific network. Every transaction is authenticated using algorithms that “prove” the legitimacy of the transaction.
As the ledger increases in size, so does the complexity of the digital keys and the time and power necessary to verify the transaction. But this also ensures that the blockchain is secured and accurate.
3 Main Benefits For Businesses
Again, no one really expected blockchain to be used for anything other than cryptocurrencies – at least not in the beginning. In fact, it was built as a way to decentralize our lives and make everything more self-regulated.
But, things have changed. Blockchain is now being considered for use in businesses, in ways we’ve never considered before. So, here are three benefits for businesses where blockchain makes a TON of sense.
Most transactions go through several mediums before it is processed. During that time, businesses don’t have access to the funds – think three to five business days.
What if you could cut out the middlemen (i.e. mediums, processing agents)? Would that speed things up? Absolutely!
Blockchain can effectively cut out the middleman and make transactions a two-step process between the buyer and the seller. In fact, it can go beyond financial-only transactions.
Contracts signatures, milestones, revisions, can all be included in blockchain transactions. Instead of three emails, two mailouts, one revision, two more mailouts, everything could be handled in one location using blockchain.
The more efficient a business can run, the more profitable they can be (either in resources and/or hours worked).
Most every business dreads the end-of-the-year financial reports and the inevitable audits that come with them. So, wouldn’t it be better if the audits could be expedited or removed altogether?
If blockchain was involved, it could be. The reason behind this is simple – blockchain is a sequential record of events and/or transactions that can be followed back to the very beginning. On top of that, the record itself never ends so it is easy to find out where the problem might have arisen.
Most of the time, these records of transactions are located in a database, possibly on an old computer, where finding the offending record could take days or months.
In some instances, the record of a transaction might not have been entered in properly, or it might only be recorded on a paper receipt.
Using blockchain, all of these issues could be resolved in a matter of minutes as everything is recorded – transactions, payments, invoices, modifications, etc.
If your business could cut out the amount of time spent auditing records are trying to locate a missing invoice, how much time would it save?
And finally, businesses need security. In fact, they spend a lot on making sure that their systems are secured from outside access, their credit cards are protected, their computers are protected, and the list goes on.
What if you could lock down all of your transactions, and not just the financial ones? What if you could ensure that every change was made via authorized users only – no malicious changes and/or hacks?
Using blockchain, you could do just that. As the information could only be changed using private keys, the information would not be confirmed until it was verified on the blockchain ledger. Once verified, the information could then be changed and recorded into the record.
And you would be able to trace every change, to each user (private key), and know that everything is secured.
You wouldn’t have to worry about document and contract integrity as everything could be managed using the blockchain. Would that save on time and resources for a business?
As you can see, blockchain has a lot of potential. Bitcoin just happened to be the first implementation of blockchain technology. And then other cryptocurrencies jumped into the foray and the blockchain technology came into the limelight.
Initially, everyone linked cryptocurrencies with blockchain, marking blockchain technology as a rebel in the market. But blockchain is what makes the cryptomarkets work. In fact, without blockchain, cryptocurrencies wouldn’t survive.
But, businesses are starting to see the benefits of using blockchain to help them with their transactions, whether the transactions are financial, contractual, or other records of communication and/or changes.
We only discussed three benefits today, but can you see how your business could benefit from using blockchain technology. As you were reading through this, did something come to mind where you thought “hmm, maybe we could use blockchain technology for this?”
Cryptocurrencies like Bitcoin are here to stay, but so is blockchain technology. And while bitcoin prices fluctuate (sometimes wildly), the blockchain technology remains constant.
In fact, blockchain will live long after cryptocurrency has been replaced simply because of its design and premise. So, is your company ready to start moving towards blockchain transactions?