5 Ways to Make Blockchain Work for Your Business
Blockchain technology is slowly but surely making inroads into businesses. It provides several advantages over traditional processes and can revolutionize your business due to its features.
Blockchain has tremendous potential to introduce new concepts and ideas and to integrate with existing ones to further augment their utility.
In this blog, we will explore in detail how blockchain technology can be leveraged for your business.
So, let’s start without further delay…
5 Ways to Leverage Blockchain
Although blockchain technology has multiple applications in the business world, we will focus on 5 most important ones at present. These applications are increasingly becoming popular making blockchain technology indispensable.
Security
Blockchain technology is capable of providing a high level of transparency and robust security. It can be used to store and verify all the information on the network.
The technology makes use of decentralization which is the biggest differentiating factor between blockchain and traditional Databases.
Blockchain networks come with higher complexity, making them robust and lowering the risk of cyber attacks.
It can be used for digital identity, which facilitates the businesses to store and protect the identity of customers and use it for various purposes securely.
Smart Contracts
The name itself indicates that it is a better version of on-paper legal contracts. It is a type of self-executing contract, with the terms & conditions of both parties written in a programming language.
Once written, this code is then stored in blockchain networks which are decentralized. This makes smart contracts an immutable document which is ideal for business processes.
Whenever the terms & conditions written in code are fulfilled, the contract is executed automatically.
The advantage smart contracts provides to businesses is that it eliminates the need for attorneys, lawyers, government officials and other middlemen.
Supply Chain Management
Blockchain technology can help Small and Medium Enterprises(SMEs) to track their products/services right from procuring raw materials and manufacturing to delivery of finished goods.
As blockchain is highly transparent and tamper proof, it facilitates tracking of products from origin to final destination. As a result, it increases accountability and also reduces the risk of fraud.
It increases trust between the two parties, who can track everything in real-time.
Blockchain technology is capable of automating several processes of the supply chain, increasing efficiency and cutting costs. Automated processes include logistics, inventory tracking, and payments to vendors or third-parties.
All these lead to increased customer satisfaction and leads, conversions, and sales.
Finance
Blockchain technology is a boon for Finance related processes in any business. It has the capability to process payments instantaneously and securely.
Blockchain can transform the stock market as well by eliminating time-consuming and complicated processes. It offers a peer-to-peer investment process, which means an individual investing directly with a firm instead via a broker.
Financial institutions need to maintain the secrecy of their customer’s digital identity.
Blockchain technology increases accountability, efficiency and trust in data security.
Financial services firms can leverage blockchain technology’s decentralized mechanisms to significantly decrease the risk of cyber attacks.
At present, businesses are spending a lot of money to manage the current financial system. Blockchain technology can not only reduce the costs but also increase the efficiency of the system.
Businesses can save a lot of money by eliminating third-party vendors and making use of blockchain technology. There is very little interaction needed to validate a transaction using blockchain, which saves time and resources.
The financial services industry can also make use of blockchain to eliminate the manual collection of required documents from clients, like insurance policies and forms.
Blockchain technology is also capable of replacing paper currency and metal coins, and eliminating the inefficiency and hassles associated with them.
Quality Assurance
Blockchain technology can play a role in Quality Assurance of products, especially when there are defects. Blockchain provides a definitive, contiguous ledger to identify the issue almost immediately.
Every single product of the defective batch can be flagged and removed, no matter whether it is still being packed, in transit or in the retail store. This blockchain-based QA system can notify everyone within seconds.
Thus, blockchain technology can be used to ensure product quality. This system ensures that products are not adulterated and defective ones can be traced within seconds. As a result, products meet quality standards and have required safety measures.
As blockchain technology makes use of cryptography, it ensures secure sharing of QA-related data amongst stakeholders, without data breaches and unauthorized access.
Challenges in Implementing Blockchain
Although blockchain technology can transform the way businesses operate and foster their growth, its adoption by businesses is slow. There are some challenges that need to be addressed to make the technology more popular.
Energy Consumption
Blockchain makes use of intensive cryptographic computations to validate transactions, which consumes a lot of electricity. Blockchain works by consensus amongst all the computers on the network for every transaction.
This process of arriving at a consensus is known as mining, which makes use of powerful computer chips, software, internet connectivity and air conditioning, all of which requires electricity.
It is estimated that one bitcoin transaction, which is a blockchain based cryptocurrency, consumes as much energy as 100,000 Visa transactions.
Insufficient Number of Blockchain Developers
One of the major problems associated with blockchain technology is that there are not enough skilled developers. As a result, smaller businesses have to pay higher wages to keep blockchain experts with them.
As a result, with a lesser number of blockchain experts, its adoption becomes costlier, forcing businesses to look for other options.
As blockchain is a multidisciplinary field, developers need to have diverse skills, including those in cryptography, smart contracts, and consensus algorithms. This is a difficult task, especially for inexperienced developers.
Scalability Issues
Blockchain provides advantages like no single point of control or failure, immutability of data, and decentralization. However, these advantages also cause scalability issues for blockchain technology.
As the number of transactions grows on a blockchain network, it becomes expensive and slow for payment services. Scaling these systems is not a simple task like adding more resources as more nodes slow down the network.
As a result, there is a need for better design for scalability.
On a Closing Note…
As we have already discussed, blockchain technology has immense potential for businesses belonging to diverse sectors. As the technology adoption is still in its nascent stage, we have just seen the tip of the iceberg.
However, as challenges of scalability, huge energy consumption and dearth of skilled blockchain developers are addressed in the future, blockchain technology would make more inroads into the business world.
In case you are looking for a reliable blockchain development company, look no further than Junkies Coder.
Blockchain FAQs
(1) What is Blockchain technology?
Blockchain consists of a chain of digital blocks which are storing batches of transactions securely. It is based on Digital Ledger Technology(DLT) and is the technology behind cryptocurrencies like Bitcoin.
(2) When was blockchain technology first used?
Blockchain technology was first officially used in 2009 for the cryptocurrency called Bitcoin. It has been used for several other applications since then.
(3) What are obstacles to adoption of blockchain?
Blockchain technology faces adoption obstacles like scalability issues, high energy consumption, and lack of adequate number of professionals who can utilize it efficiently.
(4) What is the future of blockchain?
Blockchain has a lot of potential for large scale use in the future as obstacles are removed. It will increasingly be used for supply chain management, secure cloud storage and asset tokenization.