According to the PwC Global Blockchain Survey 2018, 84 percent of companies are “actively involved with blockchain.” This does not come as a surprise given the value that this innovative new technology could potentially provide to businesses.
In this article, you will discover how businesses could benefit from implementing blockchain technology and why adopting blockchain solutions may be the right move for your company.
Boost Operational Efficiency
As a decentralized peer-to-peer network that can transfer data in a secure and timely manner, businesses can benefit from the blockchain as it can help to increase operational efficiencies.
Blockchain solutions, including smart contracts, can alleviate the need for intermediaries, and combined with the digitization of documents, they can improve a wide range of operational processes that were previously paperwork-heavy. This can be seen in a number of blockchain supply chain trials, for example.
The blockchain can also help to lower costs business costs by reducing transaction fees and eliminating costly intermediaries.
Blockchain money transfers, for example, are
“388x faster and 127x cheaper than through traditional remittance channels,”
according to a report by BlockData. Hence, through leveraging blockchain-based payment system, companies can reduce transaction fees and deal with clients and B2B partners directly. By cutting out middlemen, the fees that would normally go to intermediaries would disappear entirely, reducing a company’s cost base.
Increase Data Security and Transparency
The implementation of blockchain technology can also increase data security as the distributed nature of blockchain networks eliminate a single point of failure, which centralized networks suffer from. Hence, from a cybersecurity point of view, blockchain-powered data storage and transfer solutions can improve a company’s data security.
Moreover, due to the immutability and the auditability of the blockchain, a company can increase data integrity and its level of transparency for internal reporting as well as communications with regulators or even customers.
By having a fully-trackable, digitized audit trail, businesses can provide the level of transparency that regulators and, increasingly, customers want to see from today’s businesses.
Tokenization of Assets
A business could also benefit from the blockchain-powered tokenization of assets. The tokenization of assets refers to the conversion of the rights to an asset into a digital token. These digital tokens are generally tradable, which can create liquidity in previously illiquid assets.
By tokenizing some company assets, such as real estate, for example, a business could unlock capital that has previously been locked up a highly illiquid asset, which can now be used as working capital or to expand business operations.
New Methods of Fundraising
Finally, blockchain technology can also be leveraged to raise funds at a lower cost than traditional fundraising options such as a stock IPO. For example, a business could launch a security token offering (STO) to fund its expansion.
So, instead of selling stocks to investors, a company could sell equity tokens, which provide investors with a digital share in the company. The key difference is that STOs are much cheaper to execute than IPOs so that even startups and SMEs can partake in this new form of funding.
We Can Expect More Blockchain in Business
While adopting blockchain solutions may not be suitable for all businesses, the large number of benefits of implementing blockchain technology will likely lead to widespread adoption of this new technology at multinational corporations, small and medium-sized businesses, and even startups.
Moreover, as the blockchain sector matures, many businesses will likely end up adopting user-friendly, industry-standard distributed ledger solutions without even realizing that they are using the technology that underlies Bitcoin.
Leading technology companies IBM and Microsoft have launched Blockchain-as-a-Service (BaaS) platforms and are investing heavily in the development of business-friendly blockchain applications, which is a testament to the belief that blockchain enterprise solutions will become a massive market in the next five to ten years.