Blockchain tech is here to stay. Here is how small businesses can put it to use.
Blockchain is one of the fastest-growing technology markets, providing endless solutions for secure business transactions. Market Reports Hub predicts that the blockchain market will grow to more than $2 billion by 2021. Despite this, the term "blockchain" remains mysterious and confusing to most people, who are unaware of the potential gains it offers.
Blockchain is on its way to becoming a major solution for governments, industries and people, despite the prevailing lack of awareness and understanding of how it works. However, you do not need to understand all of blockchain's working principles to realize its benefits and tap into the technology. For example, not many people can tell you exactly how the internet operates, yet internet technology has become an essential part of our lives. Many industries are powered by the internet, and many of them actually emerged because of it.
Many blockchain adopters and proponents claim that blockchain's potential is almost limitless, to the point where it may disrupt entire industries, or just serve you a cup of coffee in the morning. Despite being a brilliant cutting-edge technology, blockchain offers many attractive opportunities for businesses of any size. Large corporations are either already incorporating blockchain or considering doing so, because its technology makes trust, transparency and immutability a reality for its adopters. Small businesses may feel they are not able to keep up with the fast-evolving technological landscape, but they can't afford not to.
Trust, transparency and immutability have always been issues for companies of any size. Blockchain helps companies solve these problems. The secure technology of blockchain circumvents the need for intermediaries, saving time, cutting expenses and facilitating a variety of processes.
With all the hype and bold predictions being made about the future of blockchain, large corporations are testing the waters to see how blockchain will impact their business. However, small businesses and startups may stand to gain even more, because they now have the opportunity to engage competitively with established larger businesses, thanks to blockchain.
To allay any doubts and help you understand the potential of blockchain for business, here are some simple practical ideas on how small business owners can take advantage of blockchain technology.
1. Fast and secure money operations
Blockchain has its roots in cryptocurrency, so the idea of fast and secure fund transfer makes perfect sense. No matter what operation you choose to execute through blockchain by means of cryptocurrency – accepting payments, paying vendors or subcontractors, or transferring wages to employees – blockchain makes the process smooth and secure.
Before the advent of blockchain, we had only the banking system for payments and money transfers. We had to rely on an intermediary we don't trust and were charged for its services.
Most blockchain transactions have minimal fees, and real-time seamless money operations add a layer of security. Blockchain transactions are not restricted by country borders, enhancing opportunities for businesses to grow globally, employ foreign workers and collaborate with foreign partners.
2. Unbreakable contracts
Business is fundamentally about transfer of value between parties. Blockchain provides a secure environment for the execution of digital contracts. Smart contracts – the technology that works on top of blockchain – enable the digitalization of traditional contracts whose terms can be translated into if-then statements.
Smart contracts are unique self-executed coded agreements that guarantee to deliver outcomes, provided all predetermined conditions are met. By translating contracts into sophisticated translated code, this software provides a revolutionary and risk-free way for businesses to manage and regulate relationships with vendors and subcontractors.
Smart contracts reduce the need for lawyers and save businesses the bureaucracy and expense of legal proceedings due to a party's bad faith. As long as conditions are met, value transfer happens no matter what. Contracts are safely stored on blockchain, reducing to nothing the odds of agreements being altered or deleted by either party.
3. Smooth supply chain operation and proof of provenance
Businesses whose processes are tied up in shipping and logistics know how much paperwork and stress it takes to manage and keep everything in order. In most cases, it is hard to keep track of the current location of goods and shipments in real time. Delays with shipments can affect businesses, resulting in additional overhead and strained relations with those dependent on a partner's smooth supply chain operation.
Proof of provenance is another important issue. In most cases, the final product that reaches consumers is not produced by a single manufacturer. For example, exquisite furniture may be made by a company that orders wood from Chinese suppliers and metallic furniture fittings from an Italian manufacturer, which in turn orders metal from someplace else, potentially creating legal concerns for the manufacturer. Tracking the provenance of components to make sure that the wood does not originate from illegal logging and that the fittings are made of the exact metal the manufacturer expects is very hard, if not impossible. But with blockchain, it takes zero effort to track the provenance details of each component.
Blockchain makes it possible to track and keep records of each stage of a product's journey – from its origin to the buyer's shopping cart – in real time and with no hassle.
4. Safe storage of data
Businesses and personal users spend well over $20 billion every year on cloud storage, even though a great portion of prepaid storage space remains unused. Moreover, users must entrust their precious data to centralized providers whose servers can be destroyed or hacked anytime.
Blockchain applications allow users to store data in a safe way and for reasonable prices, without compromising data security or overspending. The idea behind cloud storage is simple – all blockchain users can mutually store data on each other's computers by renting additional hard drive space. Stored data is encrypted, and access is limited to those who have the cryptokey. Blockchain offers a solution that enables businesses to reduce costs, earn more money and keep their data secure from cybercrime.
5. Smart offices with smart devices
The future is predicted to be fully sensorized. In homes and offices today, devices can be connected with one another through blockchain to form one autonomous network for efficient device-to-device communication, operation and decision-making. All office devices are now able to self-manage, fix bugs, auto-update, and even schedule and pay for their own maintenance.
Imagine a scenario where your printer can order and purchase consumables such as paper and ink, or your robot vacuum can detect the most appropriate time to run to save you money on electricity, based on real-time grid prices and overall power consumption. Real-world examples are not limited to these few. Letting the office manage itself may seem like a minor change, but it could save significant time and money.
It is impossible to predict whether blockchain will work for small businesses in the same ways it works for huge corporations today. Businesses of any scope should take a realistic and coolheaded approach to leveraging any new technology. Blockchain's potential is yet to be fully tapped, and we will no doubt discover more applications and solutions for business and personal use in the near future.