Top 10 business benefits of blockchain technology

When Bitcoin came out in the world in 2009, it was the first time that blockchain was used in the real world, showing that this digital distributed ledger technology does work. Since then, businesses have been trying to figure out how they, too, can use blockchain.

Blockchain is being used by well-known companies, government agencies, and non-profits to improve processes and create new business models.

The value of blockchain comes from the fact that it lets entities share data quickly and securely, without any one entity having to be in charge of keeping the data safe or making the transactions happen.

Ayman Omar, an associate professor at American University’s Department of Information Technology & Analytics and a research fellow at the Kogod Cybersecurity Governance Center, said, “It’s a list of transactions that each have their own unique characteristics. These characteristics help us fix problems in our systems and processes.”

In fact, businesses can benefit from the blockchain and its features in many ways, whether they use a public blockchain network or choose private or permissioned blockchain-based applications.

The following are what experts say are the top benefits of blockchain:

1. Trust

Blockchain makes trust between entities where it either doesn’t exist or hasn’t been proven. Because of this, these organizations are willing to do business transactions or share data that they might not have done before or would have needed an intermediary to do. One of the most-mentioned benefits of blockchain is that it makes trust possible. Early uses of blockchain showed its value by making it easier for people who didn’t know each other directly but still had to share data or payments. Bitcoin and other cryptocurrencies are great examples of how blockchain makes it possible for people who don’t know each other to trust each other.

2. Decentralized structure

Daniel Field, head of a blockchain at UST, a global provider of digital technology and services, said that blockchain really shows its worth when there isn’t a single person or group who makes trust possible. So, blockchain makes it possible for people who don’t know each other to trust each other, and it also makes it possible for businesses to share data in an ecosystem where no single business is in charge. The supply chain is a good example. Many businesses, from suppliers and transportation companies to producers, distributors, and retailers, want or need information from others in the chain, but no one is in charge of making sure that all this information sharing happens. This problem is solved by the fact that blockchain is decentralized.

3. Better safety and privacy

The security of systems that use blockchain is another important benefit of this new technology. Blockchain’s increased security comes from the way it works: end-to-end encryption creates an unchangeable record of transactions, which stops fraud and other unauthorized actions. Also, blockchain data is stored on a network of computers, which makes it almost impossible to hack (unlike conventional computer systems that store data together on servers). Also, blockchain is a better way to deal with privacy issues than traditional computer systems because it can make data anonymous and use permissions to limit access.

4. Costs went down

Because of how it works, blockchain development services can also help organizations save money. It speeds up the way transactions are handled. It also cuts down on manual tasks like putting together and changing data and makes reporting and auditing easier. Experts pointed out how much money financial institutions save when they use blockchain. They said this is because blockchain’s ability to speed up clearing and settlement directly reduces the cost of doing business. In a broader sense, blockchain helps businesses save money by getting rid of vendors and other third-party providers who used to do the work that blockchain can do.

Blockchain’s unique features can help businesses improve trust, security, and transparency, among other things.

5. Speed

Blockchain can handle transactions much faster than traditional methods because it cuts out middlemen and replaces any manual steps that are still needed. In some situations, blockchain can complete a transaction in less than a second. But times can be different. How quickly a blockchain-based system can process transactions depends on many things, like how big each block of data is and how busy the network is. Still, experts have come to the conclusion that blockchain is often faster than other processes and technologies. Walmart used blockchain to find out where sliced mangoes came from in seconds, a process that used to take seven days. This is one of the most well-known uses of blockchain.

6. Visibility and being able to track

Walmart uses blockchain not just for speed but also so they can find out where mangoes and other products come from. This lets stores like Walmart better keep track of their stock, deal with problems or questions, and check the history of their goods. If a farm has to recall its products because they might be contaminated, a store that uses blockchain can figure out which produce comes from that farm and take it off the shelves while leaving the rest of the produce for sale. Experts say that blockchain can help track the origins of many things, like medicines to make sure they’re real and not fake, and organic items to make sure they really are organic.

7. Immutability

Once a transaction is recorded on the blockchain server, it can’t be changed or deleted. All transactions are time- and date-stamped on the blockchain, so there is a permanent record. So, blockchain can be used to keep track of information over time, making it possible to audit information in a safe and reliable way. Omar gave the example of how Sweden uses blockchain to digitize real estate transactions and keep track of property titles even as they change hands as an example of how this benefit could be useful.

8. Individual control of data

Experts say that blockchain gives people more control over their own digital data than ever before. A research director at ABI Research named Michela Menting said, “In a world where data is a very valuable commodity, the technology protects the data you own while letting you control it.” Individuals and organizations can choose what digital data they want to share, with whom, and for how long. Smart contracts that use blockchain can enforce these limits.

9. Tokenization

Tokenization is the process of turning the value of an asset, whether it’s something physical or digital, into a digital token that can be recorded on a blockchain and shared. Tokenization is popular with digital art and other virtual assets, but Joe Davey, director of technology at global consulting firm West Monroe, says tokenization has more uses that could make business transactions easier. Under carbon cap programs, tokenization could be used by utilities to trade carbon emission allowances.

10. Innovation

Leaders in many different industries are looking into and using blockchain-based systems to solve hard-to-solve problems and improve long-standing practices that are hard to change. Field gave as an example the use of blockchain to check the information on job applicants’ resumes. Studies show that a large number of people lie on their resumes, which means that hiring managers have to spend a lot of time manually checking the information. But pilot programs that let universities put information about their graduates and the degrees they were given on a blockchain that can then be accessed by authorized hiring managers help solve both problems by getting to the truth quickly and easily.

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