It seems like we live in the age of blockchain. It is perhaps best known as the technology underpinning bitcoin but its application potential is much greater and goes beyond enabling digital currencies. Yes, it is true that the success of Bitcoin gave us an insight into the blockchain technology, but that was just an example of how decentralized transaction ledgers could be applied.
Originally designed to serve as a public ledger for the Bitcoin digital currency, the tech has created a new type of the Internet backbone – one that allows digital information to be distributed but not copied.
Blockchain technology has gone through an amazing evolution in the past few years, thus giving businesses the opportunity to expand and improve their services better than ever. A growing number of industries including finance, insurance, healthcare, and supply chain management have embraced this revolutionary technology because it provides a multitude of benefits such as reducing their costs and increasing accountability.
Read on to find out how blockchain provides such benefits and learn more about using blockchain in your industry.
When the general population is asked about the meaning of blockchain, their understanding is often limited to Bitcoin, thus many people associate it with payments. Yet, those who have a deeper understanding of its concepts understand that it is about executing logic on a distributed ledger or distributed application platform.
The most unique characteristic of blockchain technology is that it has no central authority and it’s shared by different users without any intermediary. It is a shared and immutable ledger thus making the information that is stored on it very transparent for everyone. It is a simple and ingenious way to transfer information around the network in a fully automated and safe manner, as the information cannot be falsified. Essentially, blockchain is a digital database which can be used and shared throughout a network that records transactions between two parties in an efficient and verifiable way.
Now that we know what blockchain technology is, let us see how it can help businesses and why you should consider working with a blockchain development company. The blockchain technology is mainly used by businesses to store records and transactions and gives businesses benefits such as greater transparency, enhanced security, increased traceability, and reduced costs.
One of the most appealing aspects of blockchain technology, which can become an important benefit for businesses, is the degree of privacy it can provide. Many people are led to confusion when it comes to how transparency and privacy can work together in the business world. Blockchain gives large businesses a platform to act with genuine integrity towards their customers and partners. Transaction histories are more transparent with this technology because all network participants share the same documentation rather than individual copies. Thus, the shared version of the data can be updated only with the consensus of everyone. Compared to the paper-heavy processes that businesses used before, using blockchain technology makes data more accurate, consistent, and transparent.
Increased security and protection against hacking
Now more than ever, due to technological advancements, security is the main issue of concern for any organization and business. Compared to other record-keeping systems, blockchain is certainly more secure in several ways.
First of all, all transactions must be agreed upon before they are recorded, meaning that no fraudulent activity can be done without consent. Along with this, due to the open and transparent network infrastructure of blockchain, trust will no longer be an issue because any fraudulent activity such as data breach, attempts to corrupt, delete, or change information will be noticeable and traceable.
In any industry and for any business, protecting sensitive data is essential as it can be hacked and stolen by your competitors and used against your company as a competitive advantage. Hence, blockchain technology has the power to help businesses to safely store their critical data to prevent fraud and unauthorized activity. All the transactions and data are attached to the block after the process of maximum trust verification from all participants of the network.
Enhanced traceability is a benefit that is strongly linked to the security that the blockchain technology offers to your business. Historical transaction data can be used to verify the authenticity of all assets and prevent any fraudulent activity. Using blockchain technology, businesses from the supply chain sector can benefit from enhanced traceability.
Simply put, this technology gives businesses the opportunity to find out where a product comes from and to follow its route throughout the entire transformation and distribution chain.
Reduced costs by eliminating the need for a third party
Regardless of your industry, one of your business priorities is to reduce costs. Another benefit that businesses can get from using blockchain technology is cost reduction.
Since it only implies trusting the data that appears on the blockchain, businesses no longer need as many third parties to ensure that they can trust their trading partners. Thus, it allows verification without having to be dependent on third-parties.
Efficiency and productivity are keywords in the business world that lead to success. It seems that blockchain technology can also positively impact the efficiency of the processes within a company. Companies no longer have to deal with paper-heavy and time-consuming processes that are not only prone to human errors but also often require a third-party mediation. Participants share a single digital ledger, having access to the same information making it easier to trust each other and to create the path for clearing and settlements much quicker.
There is no limit to how blockchain technology can provide businesses a better and safer way to do things in finance, operations, and the productivity of their processes. As it is an efficient mechanism to bring your business to the highest degree of accountability, it can substantially impact the way your company performs for good.