Did you know that the blockchain application is going far beyond cryptocurrency and bitcoin? The report predicts that Blockchain’s business value will exceed $15.3 billion by 2023,
Nearly 86% of top executives believe that Blockchain will eventually become mainstream. So what is it that has been making it so trendy these days? What is the reason that even the governments are turning towards Blockchain? Let’s begin with what a blockchain is.
Blockchain is a technology that came into highlight via the bitcoin network, which is a popular cryptocurrency. But it is not just a backup network for cryptocurrencies but a lot more than that. In a simple term, it is a specific type of database. A database designed to house significantly larger amounts of information can be accessed, filtered, and manipulated quickly and easily by any number of users at once.
A blockchain collects information together in specific groups known as a block. It holds sets of data. Blocks have specific storage capacities and, when one block is filled, It is chained onto the previously served block. Thus, all the chains of those blocks of data are known as the “blockchain.”
Blockchain and the Technology
In 2008, Satoshi Nakamoto came up with blockchain technology, and the first cryptocurrency is based on it. It’s the reason why many people still associate bitcoin with blockchain technology. One fun fact: Bitcoin has now taken a grasp in developing nations as well, and you can now convert bitcoin to naira too via Vertex Market.
Technology at the heart of bitcoin and virtual currencies, Blockchain is an open distributed ledger that records the transaction between two parties efficiently, verifiably, and permanently. Thus, Blockchain doesn’t only revolve around bitcoin and cryptocurrency but also beyond digital assets. It is said to be one of the most disruptive and revolutionary technologies of our time.
To find out how it has been solved in the world of business, we need to figure out the problems that the business world has been facing. Thus, let’s quickly move towards the real business problem worldwide and how this revolutionary technology is used to solve them.
Supply Chain Management
Today more than half of the world’s most valuable public companies have internet-driven, platform-based business models as a well-optimized supply chain ensures maximum productivity with reduced fraudulent activity and overhead costs. As you can imagine, implementing this in the real world is a real hectic job. Automation efforts have been made using AI and Machine Learning, but Blockchain promises to be a game-changer in this area.
Blockchain helps invisibility of every transaction and its associated value to anyone with access to the system. Transparency in data sharing makes sure everyone is on the same page. There is transparency in every transaction from manufacturer to retailers, from vendors to contractors. It has helped to reduce conflicts and delay in operation. The risk of misplacements in the supply chain, and we can track products in real-time.
It offers flexibility with large databases being available from multiple locations throughout the world. It means that no matter how big the business is or how spread across the globe, companies can manage their supply chain effortlessly using Blockchain.
Walmart, one of the biggest retail shops, are utilizing Blockchain to improve its supply chain.
One of the challenges for companies doing international business is sending international payments via established banking channels. It is a complicated procedure that involves several intermediaries. As per the World Bank, the average transaction fee for worldwide payments is around 7%, which is a lot. Below is the average transaction fee for Etherum.
Image Source: YCharts
Etherum came into the market, as one of Bitcoin alternatives and has started performing well. You can see this content to see how to buy Ethereum in Nigeria.
Cross-border payments supported by Blockchain provide significant advantages to businesses and consumers. Blockchain-based fees are cost-effective, almost immediate, secure, and transparent. It helps to streamline the entire procedure by reducing all the intermediaries and time-consuming processes.
According to Deloitte, for transactions made using Blockchain, the involved parties incur around 40% to 80% fewer in transaction cost and take an average of four to six-second to finalize. Thus, Blockchain has been certainly valuable for all the cross border activity as well. (Source)
Identities are the most valuable assets a person could have, and with the advancement in digitization and technologies, our privacies are no longer secured.
Most of us usually ignore reading the small or do in-depth technical assessments before sharing information online or accepting any terms of condition. People bother to share a different password for each account or re-enter credit card numbers every time making an online purchase. As a result, we effectively put every company and government institution in the identity management business, which leads to an identity crisis.
Blockchain enabled identity management not only gives the ownership of data but also keeps it very secure. It makes a sovereign individual. Blockchain technology makes it extremely difficult for fraudsters to gain data illegally. Blockchain-based data can be dispersed across an extensive network of individuals and grant more ownership over their data.
Many companies have been using it for their users/consumers to share their identity without worrying about losing their consumer’s sensitive data.
Smart contracts and Agreement
Many business organizations go through legal procedures for creating contracts and Agreements. It is required to build trust amongst the transacted parties. As a result, they spend a lot of time and money on the intermediaries. Lawyers, regulatory paperwork, and gathering all the signatures are very hectic. Similarly, the government system and public sector rely on traditional ways for all their time-consuming processes and space for corruption.
Blockchain came up with the smart contracts, which are programmed to execute specific actions – ideally, process a transaction as soon as the terms and conditions specified in the code lines are met. Companies have started using such smart contracts that eventually allows for greater transparency as well as reduces intermediaries. Smart contracts can automate many labor-intensive tasks, streamlining the process, and helping reduce time and cost.
Digital Copyright And Piracy
Many big media houses and music industries are suffering from piracy and illegal media distribution among the people. Such initiatives still hold on to legacy systems and business models relevant back when the hard-copy format was popular. The system is not adept in the world of the Internet.
Blockchain has been helping artists and creators digitize the metadata of their content timestamp and in intellectual copyright. Creators can upload their content on a public market and secure their information as the Blockchain can record every time the content gets accessed or used. It creates a sort of transparent real-time tracking, which also opens the possibility for consumption-based pricing mechanisms, which will be better for the consumer.
Crowdfunding and Fundraising
Crowdfunding allows businesses with great products and service ideas to raise funds from regular people in small investment amounts. When it works, it can give your business a big boost. But having said that, these platforms are overwhelmed with some issues starting from investor abuse, security concerns, and even illegal transactions. Such activities have made a destructive impact on crowdfunding.
Blockchain brings potential solutions to its use of a crowdfunding platform. It allows for securities or initial crowdfunding, which is similar to public offerings. A company or startup will issue tokens that will function as its share but without equity exchange. It has been making the funding process safe and offering completely transparent access from anywhere in the world.
In so forth form or iteration, Blockchain manifests itself within, clearly seems to be strengthening hold in the enterprise business landscape. It is slowly integrated with the current system as we can see its delightful impact on business. It can solve the supply chain’s acute issues, data storage and security, transaction processing and intermediaries, intellectual property, government operations, and crowdfunding.
Some experts say that the implementation of Blockchain in these spheres will dramatically affect the invention of the Internet once had. Technology will mature immensely in the year ahead, and business can run. It will indeed contribute towards a better and safer place for the next generation.