5 Industry benefits of Blockchain Technology and who is using it?
We’ve all heard of cryptocurrency by now. It seemed to be the buzz word of 2017 and 2018. But have you heard about blockchain technology? The blockchain is the type of technology that is underpinning all cryptocurrencies. It is this tech that is creating a great deal of excitement among the business sector, despite the fact that public interest and hype for trading of cryptocurrencies has settled.
In addition to being a tradable asset in the form of cryptocurrency, blockchain technology has many other applications that are proving beneficial to businesses worldwide. They can help to increase the efficiency of a business and provide greater transparency for parties involved in various transactions.
Here we look at the five main benefits of blockchain for businesses.
- Quality Assurance
One of the leading benefits of blockchain technology is the ease with which issues can be detected and traced. If there is an irregularity somewhere along the line, the blockchain structure can lead you to the point of origin. This can in turn save businesses time and money as resources don’t have to be wasted trying to find a problem. Issues can be easily located and businesses can then undertake the necessary processes to rectify the problem.
- Smart Contracts
This new technology enables “Smart Contracts” (also known as cyrptocontracts) to be created on the blockchain. A smart contract is basically a digital contract that permits the exchange of money, shares, property or anything that has value. These contracts can be instantly validated and enforced via the blockchain, rendering the traditional middle man such as lawyers or solicitors, virtually unnecessary.
They also ensure that information remains highly secure as there is no need to disclose to a third party, maintaining confidentiality on sensitive contracts. In addition to this, smart contracts save the business time and money as they do not need to be reviewed or signed off by outside parties.
- Increase to Speed and Efficiency
We’ve all been there. You make a payment to someone via the traditional banking system and it takes days to arrive in the other person’s account. Even payments from a personal account to credit card can take days to settle. The reason for this is that most banks have multiple internal processes to complete before the money can pass through from one account to the next. With blockchain technology the transfer is almost always instant. Blockchain never closes and works 24/7, 7 days a week, everywhere in the world. Because of this, transactions can be processed fast and efficiently, with minimal fees and there are no transaction limits affecting payment amounts.
- Greater level of Transparency
Blockchain is open source technology which enables almost any user to have the opportunity to modify it. Once data is logged on the blockchain it makes it difficult to alter as there are so many eyes on it at once. This greater level of transparency contributes to the security of the technology.
The technology also allows transactions to be traceable and can help to track the movement of goods, determine their origin and trace payments easily. The benefits of business to business transactions using blockchain are being further explored, with new applications being discovered every day.
There is no central hub or data centre housing blockchain technology, meaning that the technology is decentralized. The major benefit to having no central location where data is stored is that should the blockchain be hacked or compromised in any way only a small amount of data will be affected, rather than an entire network. The lack of a central authorization point means that the information being stored is infinitely more secure and also far less susceptible to tampering.
Another advantage to having a decentralized network is that the system does not rely on a central authority to transact. In turn, this means there are no high fees that are normally collected by fiat based institutions, however, there is a small nominal fee that is collected and used to reward the miners running nodes on the network.
Which industries are undertaking mass adoption of blockchain technology?
So which industries are utilizing this new tech and integrating blockchain into their existing processes?
Businesses in the tech space and financial services are leading the charge with mass adoption of blockchain technology. This is closely followed by the real estate sector who are finding benefits in smart contracts and increased business efficiency.
Charities have also started to recognize the benefits of cryptocurrency and blockchain and many are now accepting donations via crypto. This is also helping to bolster their image in the public eye and provide peace of mind to donors that their money is not being wasted on institutional fees.
The retail sector is following suit, with many small and large businesses now accepting crypto payments for services and products. Skincare giant Lush Cosmetics is now accepting Bitcoin for online payments, so it may only be a matter of time before other big businesses follow suit.
And for all those that love a beer, the craft brewing industry has launched its very first crypto bar in London, which has proven extremely popular with millennials, the generation that is showing the greatest level of crypto interest and adoption.
What does the future hold for blockchain technology?
It is impossible to predict where crypto is going to be taking the business sector. It will render some existing processes obsolete and pave the way for new opportunities and roles to come to the forefront.
The application of blockchain and its potential to drive business efficiency sky high, could effectively disrupt existing business models and will no doubt prove to be a positive move in the long run.