Cryptocurrency isn't the only groundbreaking use for blockchain. See four more ways your business can use blockchain to its advantage.
According to a recent report on Upwork, a platform that connects freelancers with employers, blockchain development is the second most sought-after skill on the website. Similarly, according to an article in Computerworld, the popularity of blockchain development has grown more than 200 percent since December of last year.
Even the entire government of Dubai has embraced blockchain. The country has set a goal of becoming the world's first blockchain-powered government by 2020. This will include completing all transactions – visa applications, bill payments and license renewals – digitally using blockchain. The government anticipates savings of 5.5 billion dirham annually in document processing alone.
Despite its popularity, not enough is known about the innovation known as blockchain. While there is a lot of buzz around bitcoin and other cryptocurrencies, there is still a lot of mystery around blockchain, the technology behind it.
Blockchain is essentially a list of records, called blocks, which are linked. The data stored in the blocks is dependent on each block in the chain and can only be altered if all the blocks are altered. Transactions completed using blockchain are automatic, thanks to the code built into the blockchain network.
This technology is more than just the backbone of cryptocurrency. More and more companies are using it to revolutionize their operations and the way they do business. Here are four ways to use blockchain to streamline your business.
1. Increased security
Blockchain takes the guesswork out of security, because blockchain networks are more secure than others by design. Security is built into blockchain technology using cryptography code, and the blockchain ledger is regularly reconciled.
But blockchain databases are also more secure than other databases because the data stored in them is spread out across multiple locations. There is no centralized version of the database that could be compromised by hackers.
Blockchain databases are impossible to falsify or alter. In order to change any of the data contained on the blockchain, a person must alter every piece of the chain. This means businesses are guarded from internal corruption, and it means customers of businesses using blockchain can be confident the data the business collects from them is safe and secure.
Since blockchain data is spread out across multiple networks, it is decentralized. This protects against security breaches, and decentralized data networks also require fewer resources to maintain. This means that companies can manage blockchain data storage for a fraction of the cost of managing data infrastructure in a central location.
Smaller companies or startups can use infrastructure as a service (IaaS) companies that use blockchain technology to not only replace cloud storage, but also to provide increased processing power and memory. This allows your business to execute resource-intensive projects, such as artificial intelligence or virtual reality, without worrying about the limitations of their physical infrastructure. By decentralizing storage and services, you can also minimize outages.
Because of the decentralized nature of blockchain storage, your business can easily scale storage capacity as your growth warrants it. This means smaller businesses can grow in capacity without having to pay for infrastructure they don't need.
3. Automation through smart contracts
Smart contracts can be created using blockchain technology. They automate legal arrangements, accounting and escrow agreements so businesses can eliminate the cost of the third party that is usually responsible for facilitating these deals. The technology also eliminates the need for a central authority to oversee transactions by connecting parties directly and requiring all participants to agree on the validity of the information in the contract.
Smart contracts are also more transparent than physical contracts, because data contained on blockchains is stored on peer-to-peer networks visible to the public. Businesses that want to restore faith with customers can demonstrate their integrity with smart contracts. This can give customers peace of mind that companies they do business with have nothing to hide.
4. Efficiency in processes
Altogether, blockchain technology can make businesses faster and more efficient by accelerating transactions. Since no third parties are involved, legal contracts can be completed much more quickly. Also, because blockchain technology creates a tamper-proof log of sensitive activity, there's no need for security oversight or regulatory bodies.
The impact of blockchain on processes' speed is especially apparent in the financial industry. International banking has long been a career in and of itself due to the complex nature of international transactions. But blockchain technology can handle international payments and money transfers efficiently, eliminating the need for banks to manually verify these transactions. Automation has been built into blockchain transactions with cryptographic algorithms that streamline these transactions. For this reason, financial institutions are embracing the technology in record numbers. Deutsche Bank executives have predicted that, by 2027, 10 percent of the gross domestic product will be regulated or tracked by a blockchain protocol.