Last Updated on December 16, 2020 by Jason
There are a lot of people out there that associate blockchain with Bitcoin. While it is true that the success of Bitcoin accelerated blockchain into the mainstream world, Bitcoin is just one example of how you can use blockchain to your advantage.
There are many other industries that can benefit immensely from blockchain technology. Businesses, in particular, can take advantage of technology like this to not only reduce their costs, but to increase accountability.
What are the Advantages of Blockchain Technology for Businesses?
Simply put, the advantages of blockchain technology are security, transparency, and decentralization.
- Blockchain permits verification without having to use a third-party to do so.
- Because the structure of data in a blockchain is append-only, this means that it cannot be deleted or altered.
- It secures data ledgers with protected cryptography and the current ledger is dependent on a completed block to complete the cryptography process.
- The maximum process of trust verification is applied to all data and transactions that are attached to the block.
- Transactions are recorded in chronological order, which means that all blocks are timestamped within the blockchain.
- The ledger is distributed evenly across every single node in the blockchain.
- Transactions that are stored within the blocks are included in millions of computers that are part of the chain. This is why it is decentralized. This way, there is no possibility that the data cannot be recovered if it’s lost.
- All transactions that take place are transparent. This means that the individuals who have the authority to do so can view the transaction.
- Any ledger’s origin can be tracked along the chain to the source.
- More than one consensus protocol is needed to validate an entry into the blockchain, which reduces the risk of fraud or duplicate entry.
- Using smart contracts, businesses can preset conditions with blockchain. This means that certain transactions can only be carried out when the conditions are met.
Precautions to Take When Investing in Blockchain Technology
It is recommended that all businesses that are looking to invest in blockchain technology first invest in a strategic evaluation, to make sure that it is economical and feasible for their particular business model. A lot of companies out there will not see a return on their investment in the first few years, and any unstructured implementation of this technology could lead to catastrophic failure.
This is why it’s important to perform assessments to work out which application can be used with blockchain technology. You need to identify the points where it can be applied, and its impact has to be assessed with specific examples.
The right strategic approach is needed to get the most out of using blockchain technology.
Industries That Can Use Blockchain Technology
Blockchain technology can virtually be applied to any industry. This means that whether you are in banking, education, health care, agriculture, property, E-commerce, retail, mining, logistics, transport, entertainment, or the media, there’s a chance that blockchain can be helpful for you.
Of course, the more you understand about applying blockchain technology to your business, the better you can apply it.
Blockchain Architecture for Businesses
Blockchain architecture of course includes private and public options. With public, this means that anyone can join. Blockchain that is public is made secure by allowing only authorized participates in. When it comes to private blockchains, only authorized participants can read and join.
Of course, the type of blockchain architecture that you use will depend on your business style, as well as where you are implementing it.
How Can Businesses Use Blockchain to Their Advantage?
Now that we have talked about the benefits of blockchain technology, let’s take a look at how it can help businesses. Blockchain technology is primarily used to store transactions and records.
1. Static Registry
This is where the ledger includes records that are stored for reference. Take, for example, a land title. There can be a lot of muddy water when it comes to title ownership, but with blockchain technology, once you have recorded and stored a ledger, it cannot be altered.
Additionally, if any changes are made, they will be timestamped. This makes it really easy to track the title to the origin, in case of a dispute. This type of registry can also be used for food safety, research articles, and patents.
Similar to static registry, but this of course includes identity-related information that is stored. This can include court cases, police records, civil registry, voting, and identity frauds.
3. Smart Contracts
In order for a transaction to get validated, a set of predefined conditions need to be met. Once those conditions have been met, the actions will automatically get triggered. Take, for example, an insurance payout.
The insurance provider will set the conditions that need to be met for an insurance claim, and the amount will be transferred only if the clients claim satisfies the conditions that have been set by the contract.
4. Dynamic Registry
This is where the ledger keeps a record of goods and services that are exchanged on a digital platform. A good example of this is the drug supply chain. The drugs will go directly from the manufacturer onto the distributor, and eventually to the pharmacy, and all of this can be tracked.
The ledger will provide updated information about where the drugs are, and this kind of information can also help prevent certain companies supplying counterfeit drugs within the industry.
5. Payment Registry
This is another example of a dynamic registry that can be updated regularly as cryptocurrency or cash payments are made on the network. Of course, this is helpful if your business has to make international payments.
As you can see, there are many different uses for blockchain technology these days, especially when it comes to running a business.
While there are some setbacks to implementing this type of technology, there are also advantages, so the more you know about blockchain technology in relation to your particular niche in industry, the better you can apply it.