“It is going to disrupt [enter the name of any industry here]”. You see this statement written from time to time. The blockchain technology is the new ‘it’ of innovations that keeps trending. Initially, Bitcoin’s rise in popularity got people talking about the benefits of blockchain, but now the main reason is that it has tremendous potential in a number of industries, especially banking and finance, insurance, and governance, to name a few. It is estimated that global spending on blockchain development will amount to $2.1 billion in 2018.
In fact, implementing blockchain can make any startup a leader in its niche, even if there is a lot less hype about implementing it in that particular industry. Keep reading to find out about the top four benefits blockchain technology can bring to enhance your business (and your applications).
16 Big Industries Blockchain Could Transform, CBINSIGHTS, 2018
A Few Words about Blockchain Itself
Let’s make sure we are on the same page here first. There is one thing some people get wrong about blockchain technology: it’s not just about Bitcoin. Yes, it was invented as the basis for Bitcoin, but it can do so much more than just creating new coins or tokens.
But what is blockchain, anyway? Basically, a blockchain is a record of transactions or other data, but it’s not like your typical transaction records in a bank.
First of all, the information about previous entries can’t be altered in any way – the new blocks of information are created using cryptography to make sure of this.
Secondly, before any block gets added to the chain, it must be validated – but not by a trusted third party like a bank or another institution. The validation is the responsibility of the blockchain users – they need to reach a consensus. There are several mechanisms for this, like Proof-of-Work, Proof-of-Stake, and Delegated Proof-of-Stake.
Third, blockchain transactions can’t be reversed or canceled.
Most experts consider lack of scalability to be the main con of the blockchain technology, but more and more solutions are appearing to address this issue. For instance, while one blockchain-driven platform for smart contracts, Ethereum, processes only 15 transactions per second, a competitor, EOS, can process over 1,000 transactions per second.
EOS, Bitcoin, and Ethereum – Source
4 Benefits of Blockchain Technology for Business
So, why does this technology deserve your close attention? We have gathered four reasons why any company or startup should give it some thought.
Faster, Trustless Transactions
Typically, when you deal with traditional transactions, you need to take a leap of faith and trust the third party in charge of the transaction not to steal your data and/or money. Blockchain eliminates the necessity to do this – there is no authority you have to trust.
How can this benefit your business? First of all, you don’t have to enforce this trust, which can save you resources. Secondly, “trustless” becomes “trustworthy” for your potential customers or clients – they know you can’t abuse your power and block their transaction, for example.
One more thing blockchain is really good at is eliminating the risk of double spending. Considering that all the transactions are immutable and you need confirmation from blockchain users to add it, you can’t just cancel your transaction and spend the money somewhere else again.
And what’s up with making transactions faster? When making transactions with traditional financial institutions, you have to wait for the transaction to be processed – and it can take up to a few days if your transaction is international. Blockchain enables anyone anywhere in the world to make a transaction – and it will take the same amount of time regardless of your location.
Again, in terms of the business benefits of blockchain in particular, you can set out to reach a global audience from the very beginning, gaining more customers/clients/users worldwide. In addition, you can trade with partner organizations without any limitations that come with borders.
Transparency & Traceability
Blockchains can be both public (anyone can see their content) and private (only authorized users can see the records). Yet, in both cases, if you have access to the blockchain, you can view all the information stored in it, no restrictions applied.
What does this mean for you as a business owner? First of all, if you use blockchain for your end-user product, this will allow users to trust you. If you implement blockchain in your corporate software for internal use only, this will do miracles for the way you store data – you can be sure about the integrity and security of your data. For instance, you can use the technology for accounting purposes, and you always know that the data is accurate and traceable.
Let’s take a closer look at the traceability feature of blockchain. Let’s say you have a complicated supply chain (or you provide solutions in the supply chain management industry). With blockchain, you can trace the movement of goods, their current status, origin, etc. – and have all the data in one place.
This is one of the advantages of blockchain that is sometimes overlooked (and it shouldn’t be). Blockchain makes it possible to transfer ownership in the same way you transfer tokens, no matter whether we’re talking about digital assets, physical objects or, let’s say, a share in the company – and it’s the best way to make sure there is no “double spending” of these assets.
Transferring the ownership of real-life assets, even though it is sometimes too complicated, is still possible offline – you always have a paper trail, and there is only one object, so you can’t “double spend” it. But when it comes to digital assets, like graphics, 3D objects, stock video, etc., things get much more complicated – no one can stop you from just copying the acquired items and sharing them online for free or, as often happens, posting them as your own without crediting the author.
Blockchain can enable us to upload information about ownership. Considering that the data on the blockchain is immutable, no one will be able to ignore it, and owners can transfer ownership faster and in a much easier way (no need to deal with bureaucracy). Moreover, you can trade ownership in the same way you trade any other assets using blockchain – and you will have a transfer of a single asset to a single entity.
We’ve mentioned them a couple of times throughout our list of top blockchain benefits, and now it’s time to take a closer look at them. Smart contracts are, in essence, blockchain-powered agreements. Any smart contract is a piece of code that contains the conditions of the deal and is self-executable.
It enables making deals without having to turn to a third party to ensure the agreement is carried out – once the conditions are met, the transaction (or any other action) takes place automatically. For instance, if your smart contract regards a certain service, once you get it, the money from your account is automatically transferred to the service provider.
The benefits are obvious in this case – you get to reduce costs (no need to turn to third parties to insure the agreement) and save time. This is one more example of how blockchain can make a certain part of your business operations trustless. You can look up tips for creating smart contracts; it’s not as complicated as it may seem.
Smart Contracts – Source
Blockchain has the potential to transform any industry, and it is already transforming some of them. There is no denying this. We have included only the not-so-obvious blockchain benefits for business, but they all lead to the same outcome. With blockchain, you can make your data and/or transactions more secure, transparent, and traceable, all while cutting costs (since you don’t have to employ the services of middlemen) and gaining more trust from your partners and customers/clients/users.
Are you inspired? Have a revolutionary idea in mind? Reach out to us, and we will make your blockchain app concept a reality!