Bitcoin’s recent surge as a cryptocurrency has certainly brought blockchain technology into the limelight. However, this technology has profound implications beyond currency speculators. As a way of creating irrefutable documents throughout a business network, blockchains have the power to change how your business operates.
As an open system with few barriers to adoption, it’s especially interesting to small medium businesses. It solves many common issues such businesses face. Transactional disputes, document fraud and data storage issues become a thing of the past. The blockchain platform enhances internal operations, supplier processes and vitally, customer satisfaction.
3 business benefits to expect:
1 - Reduce transaction fees
Due to blockchain’s secure nature, the need for trusted intermediaries (and their associated fees) are vastly reduced. Implementing blockchain helps businesses compete, by reducing these operational costs. For example, product sellers no longer need to rely on online marketplaces (e.g. TradeMe, Amazon, Ebay) to facilitate payments. Blockchain enables direct buyer-to-seller transactions. Businesses that accept cryptocurrencies, reduce their dependency on traditional financial methods (e.g. banks and credit cards).
2 - Increase supply chain transparency
Businesses rely on a network of suppliers, throughout a typical production process. This makes the movement of goods and its supporting documents open to fraud and abuse. Using blockchains can protect businesses from such fraud. It creates a permanent, auditable digital record, as each transaction is verified, time-stamped and encrypted. This saves businesses time, and potential dispute costs that might occur during the production process.
3 - Faster settlements
Blockchain is faster than other payment systems as it's inherently decentralized. Rather than having to wait for intermediaries to process payments, every entity can add and verify transactions. For example, if you sell products overseas, payments typically pass through several foreign banks. Blockchains shortcut this process to process a buyer’s payment directly to the you. It allows you to record, verify and process the transaction immediately.
Adoption of blockchain technology is gaining momentum. Mastercard is launching its own bitcoin variant, so merchants can reap its benefits. The Australian Securities Exchange now manages the clearing of equity transactions via blockchain. Bitcoin futures have just been added to Chicago’s Option Exchange. IBM, Bosch and Cisco are standardising blockchain protocols to support the Internet of Things. The only remaining question - when will your business adopt its advantages?