How do businesses benefit from using Blockchain?
The distinct features of blockchain help with a variety of business problems. Blockchain increases trust, security, transparency, and the traceability of data shared across a business network. Here are 07 important benefits of blockchain
- Trust
- Blockchain fosters trust between entities where trust is either absent or unproven
- One of the most frequently mentioned advantages of blockchain is the facilitation of trust
- Its worth can be seen in early blockchain use cases, which facilitated transactions between entities that did not have direct relationships but needed to share data or payments
- Bitcoin and cryptocurrencies, in general, are iconic examples of how blockchain enables trust between strangers
2. Decentralized structure
- Blockchain truly demonstrates its worth when there is no central actor to facilitate trust, according to Daniel Field, head of the blockchain at UST, a global provider of digital technology and services
- As a result, in addition to enabling trust when participants lack trust because they are unfamiliar with one another, blockchain enables data sharing within an ecosystem of businesses where no single entity is solely in charge
- A good example is the supply chain: Multiple businesses, ranging from suppliers and transportation companies to producers, distributors, and retailers, want or require information from others in the supply chain
- But no one is in charge of facilitating that information sharing
- Blockchain, due to its decentralized nature, solves this quandary
3. Improved security and privacy
- Another significant advantage of this emerging technology is the security of blockchain-enabled systems
- The increased security provided by blockchain stems from how the technology works: With end-to-end encryption, blockchain creates an immutable record of transactions that prevents fraud and unauthorized activity
- Furthermore, data on the blockchain is distributed across a network of computers, making hacking nearly impossible
- By anonymizing data and requiring permissions to limit access, blockchain can address privacy concerns better than traditional computer systems
4. Reduced costs
- The nature of blockchain can also help organizations save money
- It improves transaction processing efficiency and it also reduces manual tasks like data aggregation and editing, as well as reporting and auditing processes
- Experts emphasized the savings that financial institutions see when using blockchain, explaining that the ability of blockchain to streamline clearing and settlement translates directly into process cost savings
- In general, blockchain helps businesses save money by eliminating the middlemen who have traditionally provided the processing that blockchain can do
5. Speed
- Blockchain can handle transactions much faster than traditional methods because it eliminates intermediaries and replaces remaining manual processes in transactions
- In some cases, blockchain transactions can be completed in seconds or less
- However, times can vary; how quickly a blockchain-based system can process transactions is determined by a number of factors, including the size of each data block and network traffic
- Nonetheless, experts have concluded that in terms of speed, blockchain typically outperforms other processes and technologies
6. Immutability
- Immutability simply means that transactions cannot be changed or deleted once they have been recorded on the blockchain
- All transactions on the blockchain are time-stamped and date stamped, creating a permanent record
- As a result, blockchain can be used to track information over time, allowing for a secure and reliable audit of data
7. Individual control of data
- According to experts, blockchain enables unprecedented levels of individual control over one’s own digital data
- “In a world where data is a very valuable commodity, the technology inherently protects your data while giving you control,” said Michela Menting, research director at ABI Research
- Individuals and organizations can choose which parts of their digital data to share, with whom, and for how long, with limits imposed by blockchain-enabled smart contracts
DISCLOSURE:
None of these articles constitutes financial advice. Articles are highly summarised to make it easy for the reader and save your time, so please DYOR further before putting your hard-earned money into any product mentioned.
Please note that the tech industry evolves rapidly and this article’s information is correct at the time of publishing. As Heraclitus said, “Change is the only constant”, so if anything sounds old or off please holler on the socials or comment here so everyone stays peeled.
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