Everything You Need to Know about Blockchain for Business
During the last year, blockchain technology and cryptocurrencies have gained popularity mainly due to the frantic growth rate. Over the past six months, Bitcoin’s prices have shot up more than three times. Every last man and his dog are now talking about blockchain and cryptocurrencies. If earlier only enthusiasts were keen on the topic, now a growing number of serious companies are turning their attention to the blockchain. However, we have to admit that with all the mad hype around the phenomenon, not many people have the grip on the true meaning of blockchain technology and the ways it can be applied in business. In this article, we will try to explain in detail how these technologies can be implemented in real business processes and how to deal with small companies that do not have the opportunity to develop their own product.
What is blockchain and why would a business need it?
To begin with, we will deal with one very important detail : blockchain and cryptocurrencies are very closely related but are not the same thing. If you think a little more thoroughly, it becomes clear that cryptocurrencies are the first and main derivatives of the new technology. In other words, blockchain can exist without cryptocurrencies, but there is no cryptocurrency without blockchain.
Now let’s consider the basic principle of the technology and why it attracts modern business. For easier understanding let’s analyze one example. We have a standard computer network which has a server and an administrator. They are the center of the entire system and have the right to any action, including the modification of the stored data. In other words, the working capacity of this network entirely depends on the server and the administrator. The blockchain is a decentralized network in which each participant is equal. In addition, it is not possible to change the data that already exist.
What’s the big deal, you might think? But let’s make a brief summary of what we already know and outline the main advantages of blockchain for business:
Security. Take the example of a server: it can be hacked and stolen or the data could be changed. If the blockchain technology is used, the lack of a single center will protect information from getting hacked.
Reliability. If we take the issue of the business process into consideration, the blockchain favorably stands out for its reliability. Documents can be faked or backdated. The blockchain technology excludes this risk.
Decentralization. A system in which each participant is equal is much more reliable from the technical point of view. In a standard network, the failure of the server or an important node can completely stop the work for a long time. With equal participants, this is physically impossible.
The availability of smart contracts. The technology of blockchain allows introducing smart contracts into the system. This is an electronic algorithm that allows conducting some financial transactions when certain conditions are met. A bookmaking system is a good example: if your bet is played, the payout is automatic. In fact, these are only the main advantages of this technology. A lot depends on specific projects, but we’ll talk about this in more detail below.
The real use of blockchain in business
Is it possible to use blockchain without cryptocurrencies? It is possible, and some state structures are considering the transfer of some workflow to this technology. In addition, some large banks are implementing blockchain for remote account management. Major businesses can be interested in blockchain as far as they need to simplify and reduce the cost of financial transactions.
The current financial system is built in a way that makes it impossible to pay, transfer or receive money without the participation of an intermediary. To date, the commission for one payment is about 50 cents, which is not a big amount. However, if you sum up a huge number of transactions, the amount will be impressive. Blockchain perfectly solves this problem, allowing you to directly conduct operations between the participants of the system.
Conclusion
The blockchain is the technology of the future, which more and more businesses begin to understand. If you are interested in the security of your transactions and the speed of their transactions, do not waste your time. Already today, the use of similar business processes is worth it. Blockchain will reduce the cost of financial transactions for your business. Also, the duration of all financial transactions will be reduced, which enhances customer loyalty. Moreover, the inability to rewrite chain blocks and smart contract technology will increase trust between business partners.
Author
CREDITS Team
CREDITS
