What do you know about blockchain technology? Businesses are increasingly using it to streamline operations and improve partnership working and transparency. It’s a new and exciting technology that is already disrupting industries. But for anyone new to the concept it can seem complicated at first. This article outlines the key benefits to help you to start to think about how blockchain technology could work for you. It is also worth talking to experts in a blockchain consultation to explore opportunities for your particular situation.
Statista forecasted blockchain’s market size to surpass $39.7 billion by 2025, currently growing at 85.5% CAGR. This surge in growth is down to the multiple benefits the technology offers to organisations and businesses. A note of caution though, blockchain uses a huge amount of computing power, so it’s expensive and time-consuming to set-up, and not that environmentally friendly. Those are issues to bear in mind and balance if you move ahead with this technology.
Here are ten of the main benefits. Let’s check them out.
Benefit #1: Helps develop trust in your customers
Establishing trust between two entities in systems like blockchain is easily achievable and narrows down to completing business transactions quickly. Blockchain is a ‘trustless model’ — entities on either side need not trust anybody except the highly secured algorithm.
Besides, the technology stores your transactions across all the systems in nodes – part of the distributed ledger system (DLS) – ensuring data safety.
Benefit #2: Provides you with a decentralized platform
Unlike traditional platforms, blockchain technology doesn’t belong to a single entity. It distributes power across the users and sustains democracy.
Since blockchain is a decentralized platform, it is not regulated by any agency or government body. Instead, it holds an independent status, which builds trust between users and businesses. While this is a benefit, there are of course also risks involved in utilising unregulated resources. If in doubt make sure that you get legal advice for your specific situation.
Benefit #3: Ensures business privacy
Blockchain technology maintains business anonymity by never publicly declaring your wallet address. It provides high-level privacy to all the users involved in the transaction. It records the transactions in blocks. No one can tamper with them, giving businesses confidence and integrity. It also provides specific permissions to view the transactions.
Benefit #4: Strengthens security for your business
Blockchain uses peer-to-peer networks to store data on computers. So even if hackers and fraudsters tamper with the information on one computer, it doesn’t change anything across the entire network.
Also, the technology can resolve privacy very quickly — compared to conventional computers — by anonymizing data and restricting access permissions.
Benefit #5: Increases your business’s productivity
Blockchain is way ahead in increasing speed and efficiency for various businesses.
From making transactions in less than a second to tracing the product’s origin in the supply chain hassle-free, blockchain has your back. It does so by eliminating third-party intermediaries from transactions.
The Home Depot is an American multinational home improvement retail corporation. It sells tools, construction products, and appliances using IBM blockchain technology to manage and address disputes in the supply chain faster and efficiently.
Benefit #6: Increases transparency in transactions
One of the main attributes of Blockchain technology is its transparency. It means it’s much easier to trace and maintain the transactions/data.
Its end-to-end encryption mechanism and other control methods protect transparency by storing information uniquely. This way, the information cannot be tampered with without recording the changes.
Benefit #7: Provides traceability to the origin of the product
With its distributed ledger technology, blockchain has become a game changer in pharma, food, finance, and retail industries.
Since every product’s movement is recorded in the nodes, it’s easier to trace whether the product is counterfeited or has come from its source.
For example, Nestle uses blockchain to track where the coffee beans came from and how they were manufactured in the company’s Sweden factory.
Benefit #8: Reduces business expenses
By eliminating third-party intermediates, blockchain reduces the massive expenses required to complete basic processes.
For example, PayPal charges up to 4% commission on all transactions, but Binance charges only 0.1% for cryptocurrency transactions.
Benefit #9: Ensures immutability of data
Immutability refers to keeping a record of transactions or movement of the Product at each stage. And each record is dated and time stamped, so it becomes permanent.
Blockchain can track information over time and provide a safe, trustworthy data audit.
Benefit #10: Tokenizes your digital assets
Tokenization can help safeguard valuable information of businesses in the form of tokens built on blockchain. It adds a layer of security to protect your confidential information.
Besides this, tokenization also:
- gives ownership of digital assets,
- helps to sell,
- makes trading experiences smooth, and
- reduces the probability of malicious activities.