The world has seen a multitude of changes when it comes to business. Different business processes with other uses have swept the stage and have given birth to digitalization. Digitalization has come far when it comes to managing operations, verifying transactions, and overseeing business performance. It has found many uses and is still being updated, innovated, and changed today.
With digitalization changing the way of money transactions and payment systems, digital currencies like Bitcoin now allow peer-to-peer transfers of value in a way that was impossible before. The first of its kind, Bitcoin only entered the scene a little over a decade ago. In 2008, Bitcoin was a proposition from Satoshi Nakamoto (a pseudonymous person still unknown). Nakamoto posted a paper entitled Bitcoin: A Peer-to-Peer Electronic Cash System to a mailing list in cryptography. However, Bitcoin would take a year to transact within the blockchain.
The word “blockchain” often denotes the rising trend of Bitcoin and other cryptocurrencies. This direct association is true, but even though it’s in the early stages, blockchain technology for business has several benefits in business operations. Some applications can include fund transfers, trading, voting, etc.
One major defining factor of blockchain is that the data stored in it is distributed across computers everywhere, making it decentralized.
This decentralization is one thing that makes blockchain so innovative and dynamic. Traditional databases are centralized, usually managed and processed by a central administrator (i.e., the government), whereas the entire blockchain is transparent, verifying data through user consensus.
How Does Blockchain Help Businesses?
Blockchain technology allows businesses and their consumers to track each transaction from start to finish without needing a central server. Transactions made using cryptocurrency can be segregated for better transparency and security, benefitting both parties of the transaction.
Businesses that would benefit from blockchain technology want to move away from paper-based storage and transmit a large volume of information. What is the Future of Blockchain Technology in Business Operations?
1. Improved management of the supply chain
Product development teams in manufacturing industries have seen the difference blockchain has made for them. With one of blockchain’s main characteristics of transparency, transactions made here provide management teams with end-to-end documentation of a product’s history, from its inception to the transferring of goods to warehouses.
Blockchain supports inventory management and is the perfect solution for real-time reporting of all transactions from inventory to shipping. In addition, the risk of human error is reduced, especially since manual changes are out of the equation.
2. Improved quality assurance and auditing
An accurate record of all transactions your business has is imperative in developing and maintaining quality assurance. Thankfully, blockchain technology lets companies identify the problems encountered in manufacturing and distribution processes and enable businesses to track where the problem occurs. In addition, the records blockchains have made auditing a breeze since it is much more accurate than the conventional method and is much less time-consuming. Blockchain technology allows accountants to automate day-to-day processes, providing new accounting automation solutions that maintain and adhere to strict regulatory requirements.
3. Quicker processing of business transactions with lower fees
More businesses are now seeing the benefits of automation when it comes to their operations. One of the most prominent benefits of automation is the ease of transaction. Cryptocurrencies, like Bitcoin, are powered by blockchain technology. There are several reasons why payment using Bitcoin has slowly gained preference over traditional transactions.
- User autonomy – Bitcoin promises user autonomy since its price does not depend on government policies.
- Pseudonymous transactions – Blockchain transactions allow users to control who they’re transacting with, which is missing in traditional transactions. These usually require some identity verification, placing an intermediary firmly in charge of the exchange.
- No banking fees – Bitcoin users are not subject to banking fees, meaning no minimum balance, no extra charge, and whatnot.
- Secure transactions – Bitcoin isn’t physical currency meaning that thieves can’t grab it from someone else unless they know the user’s private keys for the user’s cryptocurrency wallet.
- Accessibility – Users can send and receive Bitcoins using only a smartphone or a computer without the need for access to more traditional banking systems like credit/debit cards.
Blockchain technology’s speed, cost, and security make transactions quick, simple, and hassle-free, not to mention cheaper than traditional processes. As a result, operation teams can now focus on other essential parts of the business instead of overseeing, managing, and keeping track of business transactions.
4. Multiple contract executions
Another future we see for blockchain is how it can manage multiple contracts. Blockchain processes will be able to execute this with ease, from expirations to signage requirements and auto-renewals. In addition, blockchain technology allows these agreements to be digitized and managed using a set of parameters and protocols instead of being put on paper.
5. Increased business trust
Blockchain offers a high level of transparency. This transparency helps businesses gain public trust by putting their record out in the open. One of the main characteristics of blockchain is that it’s a distributed network where all members have copies of the same ledger. Trust is better established by removing an intermediary to process transactions and making everything public.
Business consumers can be more confident that they have witnesses for whatever data or transaction they’ve done. Moreover, it’s impossible to alter any data recorded in the chain, making it an excellent technology for tracing transactions and goods in supply chain management. With blockchain, organizations can practice better transparency and increase efficiency in their processes.
6. Unparalleled security
Another distinguishing factor of blockchain technology is embedded in the blocks themselves. Each block stores data, a hash (or digital fingerprint), and a part of the hash from the previous block encrypts the transaction to prevent fraud and unauthorized activities. The thing with blockchain is that any change made to the block creates an entirely different block. The previous block does not update but instead changes its hash.
Suppose, by chance, an attacker tries to commit a fraudulent act by double-spending or violating the protocols that govern the network. In that case, there are fully validating nodes (also known as full nodes) that can reject the transaction. Full nodes carry the complete copy of a blockchain transaction history. It passes on new data and blocks on the chain, verifies transactions, and blocks those that do not comply with the system’s rules.
Businesses can ensure that consumer data and transactions remain protected with blockchain technology because of this unique hash and end-to-end encryption system. By storing data in an immutable and secure ledger, businesses and customers can ensure their information is safe from corruption.
7. No downtime
Business systems must always have information and data available to ensure continuous operations without fail. Unlike banks and other financial institutions, you can make transactions even beyond business hours and weekends. You also don’t have to worry about services being down.
Since blockchain is a distributed network, it is stored in systems or computers across the network. However, no one has control over the network (which is in different locations), unlike a centralized server. There are no downtime issues with blockchain, which entails 24/7 service availability for financial transactions and business functions or processes that utilize the technology.
What’s in Store for Blockchain’s Future?
Blockchain has been making an impact not just in the business industry but also in sectors like finance, healthcare, and law. But of course, there’s still so much more to discover and develop with this technology, but one thing we know is that even know end-users have no idea that they’re using it, they will see and realize its benefits (privacy and fast payments).
Because of its nature as a decentralized system, people can expect it to run continuously in the background of businesses, laying out the foundation of essential business processes and making operations more manageable and smoother.
There’s no doubt that blockchain technology will only grow from here on out. Here’s a quick rundown of the things blockchain technology helps businesses with:
- Supply chain management: Blockchain technology helps sort out inventory and logging processes from start to finish.
- Better auditing and quality assurance: By running on a completely automated system, identifying business problems and ways to improve them becomes faster and easier.
- Quick business transactions: Cryptocurrencies run under no centralized systems like banks and governments, removing the intermediary organization that slows down transactions and increases fees.
- Multiple contract executions: It allows businesses to monitor and manage multiple contracts, a vital role in the operation. Agreements between parties have easier processing, put under specific parameters and protocols, allowing for a more secure transaction.
This article enumerated some examples of how blockchain technology for business is slowly changing today’s operations. With ease of use and a more transparent and secure system, companies of different industries can now reap the benefits of blockchain technology, helping business leaders, decision-makers, and tradespeople become familiar with the rising blockchain technology.