The cryptocurrency bull run is well underway, and nothing seems to stop it shortly. And with the prices skyrocketing, investors have increased interest to buy bitcoin with a credit card or any other means necessary.
And thanks to this hype, many businesses have increased their interest in blockchain technology and the improvements that it can bring to their functioning process.
If you wish to learn how blockchain technology can help you optimize various business processes, you’ve reached the right place. This article will go over the main advantages of blockchain for business and some particular use cases where it can provide considerable improvements.
But first, let’s go over the main characteristics of blockchain and some of its major benefits.
What is blockchain?
The blockchain is a technology that was made popular through the release of the original cryptocurrency – Bitcoin, way back in 2009.
Blockchain is a distributed digital ledger of records initially used to record bitcoin transactions on its payment network. The main goal was to provide a decentralized process for people to transact money on the internet without financial institutions as an intermediary.
By definition, blockchains are:
- Decentralized – this means that no single entity controls the blockchain. Instead, a consensus from more than 50% of the participants is needed to alter the chain. As such, blockchains cannot be shut down by governments.
- Distributed – thousands, sometimes millions of computers maintain a copy of the digital ledger. This renders the network highly resistant to fraud and modification, making it inherently secure for preserving data.
- Public – blockchain networks are permissionless and global. This means that they can be accessed, consulted, and used by anyone and anywhere in the world.
Thanks to these three properties, the data on the blockchain remains easily accessible and verifiable. Furthermore, the network provides a trustless environment for exchanging information or value, thanks to its transparency.
Worth noting is that since smart contracts in 2015, any asset of value can be tokenized recorded on the blockchain. This revolutionary advancement has brought a wide variety of use cases in the business environment.
Application of blockchain in business
Since the proliferation of smart contract blockchains, there’s been a huge growth of use cases for the technology in business. Let’s see which ones are the most relevant for optimizing and improving tedious and inefficient processes.
Increase traceability in the workflow and supply chain
As we mentioned earlier, everything of value can be tokenized on the blockchain. This includes commodities, raw materials, finished products, insurance policies, even data processes.
Once deployed, each token on the blockchain enjoys the benefits of the environment, meaning increased trust, security, and ease of transfer.
Moreover, blockchain records can be used for tracing data or products each step of the way. For instance, products can be linked to IoT devices and update their status automatically on the blockchain. This data is then easily accessible by anyone involved in the process, which allows us to detect issues and pain points and deal with them accordingly.
Improve quality control
The traceability on the blockchain also allows us to conduct thorough and precise quality control of our products.
Every step of a product’s life is represented on the blockchain, allowing us to find the best supplier by comparing performances and accessing live price quotes for raw materials, for instance.
Strengthen data security and interoperability
One of the main benefits of blockchain is the immutability of the data recorded on it. This provides a trustless environment where data cannot be compromised.
Furthermore, the transparency and inclusiveness of the network allow users across the globe to share this data without the risk of malicious intent. This offers new ways to operate with data and share knowledge instantly.
Having a decentralized universal database allows multiple industries to share information otherwise locked to a certain sector. For instance, healthcare, pharmacy, and insurance can hold a single database of patient records, which is highly efficient for the care industry.
Streamline tedious processes and reduce costs
The addition of smart contracts helps automate various processes, commonly pain points due to their dependence on human interaction. Due to the lack of intermediaries, processes are less susceptible to errors.
Equally, they are much more cost-effective as there’s no trusted party that needs to be dealt with.
Finally, blockchain transactions are much cheaper than their traditional financial institution counterparts. While the price of cryptocurrencies is rising, many blockchains are providing extremely low-cost solutions for international remittance.
Blockchain technology has managed to disrupt almost every industry today. Healthcare, insurances, finances, agriculture, supply chain – each one of these sectors can be improved and streamlined with blockchain.
As the popularity of the tech increases, so will the number of businesses making the first step towards blockchain implementation.