Technological advancements are altering the way we perform tasks whether in homes or in the corporate sector. Unlike decades ago, technology now rules every aspect of life and it will surely continue to do so. With every advancement in technology, there comes a new way of doing things. Within the business world, it has become a platform for automation, streamlining of tasks, and employee efficiency.
Technologies like AI (Artificial Intelligence), VR (Virtual reality), AR (Augmented Reality), and metaverse are changing the world. These technologies are also helping businesses stay afloat, maximize opportunities, meet customer demands, and optimize ROI. At this juncture, we would like to talk about a common technology known as Blockchain.
If you’re interested in cryptocurrency or would love to enhance business operations using modern technologies, then this is a perfect read. We will explore what Blockchain is and the associated advantages it has for modern businesses. Let’s begin!
What is Blockchain Technology?
Blockchain technology is merely an online ledger where transactions are recorded. It is a secure database shared across a network where those with access update information and analyze it in real time. Blockchain technology stores data in the form of blocks and they are linked together to create a chain.
When a block is full, it is closed and linked to the previous one, and a new block is created. This digital ledger allows anyone with access to analyze transactions, their movements, and the current situation of the ledger. The technology generally allows immutable and transparent recording of data.
You might be familiar with the way blockchain technology works in case you engage in cryptocurrency activities but the technology can do more than that. The power of Blockchain technology isn’t yet fully explored by different players across fields.
However, its traction is vivid in various sectors like healthcare, crypto, insurance, supply chain, management, and IoT field. Gartner indicates that blockchain technology will produce a yearly business value of about USD 3.1 trillion by 2030. To substantiate this, Statista asserts that blockchain technology revenues will surpass USD 39 billion by 2025.
Within a tech-savvy era like today, blockchain technology offers a competitive edge wherever leveraged. The ledger technology offers a chance to make transactions, however, records once added to the blocks are immutable. It means that they can’t be altered, however, they can be identified and recognized by the network or rejected.
Transactions are encrypted, and new data blocks don’t erode away the old ones, rather, they are added together for easy monitoring. Whenever data is added to the network, the majority of other nodes must confirm the legitimacy of the created data. After which a new block is created and the chain is updated.
Blockchain technology is currently used to make international payments and money transfers among other concerns. So, if you run a business and want to scale your operations, you might wonder whether the technology is advantageous to you. Let’s find out about that!
Advantages of Blockchain Technology for Businesses
There are many advantages of Blockchain technology in business, but here are the major ones;
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Automation
With blockchain technology, you don’t need to rely on paperwork to make a transaction, record it or authenticate it. The technology allows one to make a transaction and it will either approve it or reject it. The transactions are automated with the help of smart contracts where a given set of guidelines must be met to authenticate the transaction. This medium eliminates human intervention which enhances efficiency and also minimizes errors.
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Cost-Efficient
Although some businesses may find it challenging to introduce the latest technologies to their businesses, blockchain is cost-effective and you can surely leverage it on a good budget. Businesses within the financial sector can leverage blockchain technology to cut their operational costs and improve service delivery.
Blockchain technology can process and audit transactions, eliminating the need for a large workforce. It also eliminates the need for third parties who may be required to analyze transactions or verify them.
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Improved Transparency
Building trust comes at a cost and when neglected, it can affect the business’s bottom line. Blockchain technology can help businesses ensure transparency between themselves and their clients. The technology generally ensures transparency through the immutable ledger where transactions are recorded and remain unaltered.
Users can also monitor transactions as the ledger maintains a complete history of all activities that happen on it. Any user with the key can access the ledger and analyze the data to track it which fosters transparency.
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Enhanced Security
Financial data requires the highest degree of security and confidentiality. With paper-based approaches, data is more likely to end up in the wrong hands and be manipulated. However, Blockchain technology ensures a greater degree of accuracy and privacy. Data is encrypted and can’t be altered once added to the block.
Blockchain can prevent unauthorized access which allows data or remains in the right hands. The data is also stored across a network of computers and this minimizes the likelihood of cybercrimes. The technology also prevents fraud as all data is analyzed before being added to the blocks. Security is an add-on to a range of critical success factors in business and blockchain technology can help any organization ensure data protection.
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Free from Censorship
No authority can interrupt the blockchain network and that means that it fully operates without being affected by governments, or banks. It is true that different governments are currently making regulations for cryptocurrencies, but no single authority has overall control over blockchain technology. It is currently a conventional database that can be used by anyone and anywhere.
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Seamless Traceability
Blockchain technology streamlines every activity that is conducted on the network, which caters to easy traceability. There is no way one can fail to realize how a transaction came about and what its endpoint was. The technology allows everyone with the key to trace the origin and end of a transaction.
The trail of all transactions is openly displayed and the ledger can show any changes that were made and how they came about. Precisely, one has full control over the data and can also monitor happenings effectively. This also makes it possible to ascertain risk possibilities in the chain.
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Unrestricted By Time
Blockchain is an online ledger and can be used at any time and anywhere. Besides that, it carries out more operations when compared to traditional databases. It automates time-consuming processes which cater to efficiency and reduced errors. You don’t need to first attain assistance from third parties as long as you know how to use the digital ledger. Transactions can be done at any time which improves efficiency.
Bottom Line
Blockchain is one of the emerging technologies in different business sectors. Currently, whether it’s healthcare, insurance, cybersecurity, financial, or supply chain, all these fields can benefit from Blockchain technology. The technology maintains a decentralized ledger where members can enter data and track transactions. It also helps prevent data breaches and optimizes value for businesses.
