Blockchain is commonly known as a digital ledger that records transactions across many computers. Its initial purpose was in bitcoin and other cryptocurrencies to create a decentralized network, which means any single entity doesn’t control it.
The decentralized nature of blockchain allows for greater security and transparency across the system since no single person or company can manipulate the recorded data. As mentioned, blockchain is often associated with cryptocurrency, but nowadays, you’ll see it in all industries, from finance to manufacturing to healthcare.
With more organizations and businesses realizing the potential of this technology outside its initial use, blockchain has amassed massive popularity, enough for communities apart from cryptocurrency circles to discuss it as a viable business tool in the last few years.
Top 5 Benefits of Blockchain for Business
As more become aware of how blockchain can improve their business processes, the implementation of blockchain into business systems will become more rampant, expediting the rise of the technology to becoming the norm rather than the exception. The benefits that blockchain offers your business are numerous, but below is a glimpse of what you can expect.
1. Improved Security
A blockchain records transactions securely and transparently. Multiple computer nodes connected to the internet help store the recorded data. Other nodes much reach a consensus to verify and add new documents to the chain.
This system makes it almost impossible for cybercriminals to hack into your data because they would have to access each node on the network individually across millions of users globally.
2. Ability to instantly trace documents
Blockchain allows for the complete traceability of documents from one point to another. It can also track the entire history of a record and its various changes, so there is no need for multiple versions or revisions of the same file.
The ability to instantly trace documents can be instrumental in industries like healthcare, where confidentiality and privacy are key concerns.
Moreover, blockchain provides a transparent way to trace product ownership from its source through every supply chain step. Instant tracing makes it easy for companies to prove that they comply with regulations governing food safety or pesticide use in agriculture.
3. Increased transparency
One of the most intriguing aspects of blockchain is its ability to increase transparency. By creating a digital ledger distributed across multiple computers without the risk of outside modification, blockchain can provide unprecedented clarity about what’s happening inside a company.
This increased transparency can help businesses eliminate the need for third-party verification and paper-based record-keeping, saving time and money. It also makes sharing information with clients and partners easier without worrying about security or privacy issues.
4. Improved speed and efficiency
Blockchain technology is a great way to streamline your business. While it’s not a magic pill that will solve all of your problems, it is a tool that can help you get things done more efficiently and quickly without having to worry about human error or other issues that might arise when working with paper-based systems.
With blockchain, you can ensure that every transaction recording is accurate and secure, so you don’t need to worry about someone taking advantage of the system or making errors themselves.
Blockchain also allows for near-instant payments and transfers between parties, so if you’re looking to get things done more quickly, this technology can help.
5. The ability to automate processes
You can automate business processes through the blockchain using smart contracts.
Smart contracts are agreements between two parties facilitated by code. The agreement terms are written in code and stored on the blockchain, where they can’t be changed or tampered with. For example, some use smart contracts to create a binding agreement between two people to sell goods, services, or property.
The benefit of using smart contracts over traditional contracts is that they are immutable, meaning no one can change them once they’re written. Automation through smart contracts eliminates the possibility of fraud and corruption because finalized contract terms will be difficult or impossible to alter.
When you use blockchain to create a smart contract, you’re essentially writing your agreement into computer code and storing it on a distributed database. All parties regularly update it to keep track of changes made throughout the transaction.
As soon as one party makes a change within its copy, like changing an amount, everyone else’s copy will update immediately, so everyone has access to the latest version at all times.
Blockchain’s Potential to Make A Difference
The creation of cryptocurrency was a life changer for many as it became a worthy alternative to traditional monetary resources, and blockchain is doing the same for businesses.
Blockchain today isn’t exclusive to cryptocurrency enthusiasts, with ordinary citizens and large companies slowly realizing its full potential. What was once a way to help cryptocurrency users has now become advanced enough to help organizations of all sizes and make a difference in how they run their operations.