Is your business using blockchain? The technology could improve your security, enhance your supply chain visibility, and even speed up your payment cycle. Read on as we explore the main benefits of blockchain for companies.
What is blockchain?
Blockchain is a platform designed to make any transaction (money, goods, contracts, etc.) safer and more transparent. Think of it as a digital record book shared across a network of participants, that’s checked and verified by unlimited numbers of impartial computers. Transactions are recorded in "blocks" that are linked together securely, forming a tamper-proof chain.
Thanks to the advantages of blockchain technology, businesses of all sizes are leveraging it to transform their operations – from revolutionizing their logistics processes to improving security. It’s forecast that by the end of 2024, annual global data spending on blockchain solutions will reach US$19 billion1. So, should your business tap into its potential? Let’s explore 10 reasons it should…
10 ways blockchain can help small businesses
1. Increase transparency and build trust with customers
Blockchain technology creates a transparent record of all transactions. In instances where the participants are unknown to each other – such as an e-commerce business and a customer – this is a valuable reassurance to all parties. It also removes the need for an intermediary, making the transactional process quicker and more seamless.
2. Decentralized system
Blockchain does not store any data in a central location. Instead, it is shared within an ecosystem of businesses – like suppliers and distributors. This means information and decision-making is not controlled by a single entity, which helps to build trust.
3. Improve blockchain security
One of the biggest advantages of blockchain technology – especially for small businesses – is its high level of security. With end-to-end encryption, it creates an immutable record of transactions, meaning in the rare instance that there is a hack, you’ll be able to quickly identify what has changed and take corrective steps. Furthermore, the system can anonymize data to protect sensitive information – providing reassurance to your business and its customers.
4. Streamline operations and reduce costs
Blockchain enables peer-to-peer transactions, eliminating the fees charged by payment processors and other financial middlemen. For businesses with international customers, the blockchain network enables the direct transfer of money in seconds, converting it into other currencies instantly.
Blockchain’s capabilities also cover manual tasks such as reporting, auditing and data collecting –removing the need for spending on vendors and third-party providers.
5. Automate tasks and boost efficiency
Blockchain technology can automate multiple business processes, eliminating human error. Combined with AI, it can streamline routine tasks such as invoicing, inventory management and customer support. For small businesses with limited staff, automating key processes will relieve pressure and save valuable time.
Meanwhile, blockchain’s “smart contracts” automate the actions specific to a contract between two parties, ensuring all conditions are met before payments or services are provided.
6. Real-time visibility and traceability in your supply chain
The movement of goods on the blockchain ledger can be accessed by all parties within a supply chain, ensuring transparency and accountability.
Goods can be tracked, in real time, from the manufacturer to the end customer, so if something goes wrong – such as a supplier failing to provide your business with goods or services on time – it can be spotted and rectified quickly. It also means if faulty or counterfeit goods are identified, they can be traced back to their source quickly.
You may wish to integrate other technologies with blockchain, such as the Internet of Things, to further track the status of your shipments, and execute payments upon delivery – thus speeding up the payment cycle.
7. An immutable database
All transactions on the blockchain are time-stamped and date-stamped; they cannot be changed, altered or deleted. This immutability protects the integrity of the data and prevents disputes as transactions are recorded permanently. Many businesses opt to save sensitive data on the blockchain thanks to this level of security.
8. Secure and efficient validation of documents and assets
Businesses can leverage blockchain to validate documents and assets in a low-cost way. Its structure ensures that all nodes in the network reach an agreement on the validity of transactions before they are added to the blockchain, thus preventing inaccurate or fraudulent data.
9. Enhances the customer experience
Blockchain offers several ways for your business to enhance the customer experience. The technology can lower your operating costs – savings you can pass on to your customers. You can speed up key transactions – such as payment for services and products – whilst building trust in your business by giving greater transparency over your data protection and security policies. Furthermore, you can streamline and automate your customer service processes, meaning disputes will be resolved more quickly.
10. Improves hiring processes
Employees or organizations can use blockchain verification systems to tokenize key employee information like academic records and references. Businesses can then leverage this to vet talent and find candidates most suited to their requirements – resulting in higher-quality hires.
Will you create a blockchain supply chain?
Blockchain’s vast capabilities – from automating manual processes, enhancing security, and increasing supply chain visibility – means it should be a consideration for every business wishing to streamline and improve its services. In 2021, approximately 29% of small to medium-sized businesses utilized blockchain technology2. Will your business join them?
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