5 Ways Ethereum Will Power Small Business in the Future
By Nathan Allan Drescher on The Capital
Have you ever stopped to wonder what businesses of the future will look like? After all, blockchain technology continues to evolve at a phenomenal rate. But we don’t need to look too far ahead, because Ethereum is already powering small business today.
Of course, it’s Ethereum. No other crypto offers the customizability and multi-role use that Ethereum provides. That’s because Ethereum is more than just a cryptocurrency tied to a blockchain. In fact, the currency side of Ethereum is simply a byproduct.
Take a look.
At its heart, Ethereum uses blockchain technology to manage smart contracts. These contracts can be created for almost anything, from major international money exchange to a city bus pass. Because they’re on a blockchain, they are decentralized and verifiable. You can learn more about Ethereum at The Capital.
The thing you need to take away is that businesses are already beginning to implement Ethereum into their operations today. Some big names, such as Amazon and JP Morgan, have started to build their cloud services on top of Ethereum.
But it’s not only large companies harnessing this power. Startups such as Veem have found ways to use Ethereum smart contracts to ensure peer-to-peer payments remain secure.
And it’s just the beginning.
Why Ethereum?
You may be wondering why Ethereum, and not Bitcoin’s blockchain? What about the thousand other blockchains that have arisen in the wake of Bitcoin?
For starters, Ethereum does what none of the others can do. It manages data and not just money. That is, it’s more than a currency platform. Sure, Ethereum rewards miners with ether tokens, and people can invest in ether. But that’s a result of the platform and not the purpose of it.
You see, thanks to Ethereum’s smart contracts, ether tokens are traded easily. But so is data. Just take a look at uPort’s project to create one blockchain-based ID for citizens. Using a virtual world that anybody can join, uPort demonstrates that people can have their bank cards, bus passes, driver’s licenses, mortgages, and even their college degrees stored in a single ID on the Ethereum blockchain.
Now imagine using that kind of power to build a business. That’s exactly what the future of Ethereum and small business holds. Do you see where we’re going with this?
Let’s look at some examples.
How Ethereum Will Power Small Business in the Future
You’re probably thinking that small businesses powered by ethereum is a hundred years in the future, and you won’t see much movement in that area in your lifetime.
But you would be wrong.
Ethereum, although a younger crypto, is constantly evolving. The latest ERC20 standard provides greater stability and a better understanding of the underlying blockchain for developers. But ERC20 is set to be replaced by a newer protocol sometime in 2020.
So as the blockchain evolves, so too will the applications businesses can implement. Here are some examples.
Crowdfund ventures
Do you know what makes up the main cause of small business failure? Lack of cash to scale. Although a business may be doing well, without the ability to scale, it can’t grow. And banks are notorious for denying loans to small businesses, while venture capital remains exclusive to the tech industry.
But with Ethereum, small businesses can raise funds through blockchain investors. The smart contracts ensure that investors receive their share when they invest. And with Ethereum backing a business’ payment gateway, investors are guaranteed a return.
This is great for small businesses. And they can take it a step further and register an LLC, distributing shares using Ethereum tokens.
Manage employees
A more practical use for Ethereum in small business is to manage employees. Every employee can be issued an ID using ether tokens (more on that later). Their hours of work can be logged automatically, and smart contracts can automatically issue payments to the employees.
Think about it.
You’ll no longer need to pay a bookkeeper to calculate withholdings and distribute money every two weeks to your staff. Simply program a smart contract to release funds to the employee based on their hours of work, and set variables as deductions. Not only that, but you can choose to pay them every two weeks, every week, or even every hour that they work!
Small business owners won’t need to lift a finger once the smart contract parameters are set. The Ethereum blockchain will handle it all automatically.
Instant contracts
One of the biggest headaches in the world of business is dealing with legalities. Contracts and forms need to be signed, sealed and delivered. It usually involves a visit to the client or provider, or at least printing the pages, singing them, scanning them, and emailing them back.
Enter Ethereum.
Thanks to the decentralized power of smart contracts, businesses can sign contracts instantly with their clients and partners, right on their computer or smartphone. The blockchain verifies the contracts in Perpetua. They’ll never go away, and business owners will never lose them.
Customer loyalty
Admit it. You have a half dozen gas cards and probably an Air Miles card in your wallet. You collect points at every grocery store you visit.
But small businesses don’t have such a luxury. These things are expensive to implement and manage, requiring complicated databases. But with Ethereum, it’s all done automatically.
Assigning an ID to each customer will automatically track every interaction they have with a small business. Customers can be rewarded for every purchase.
The smart contracts can handle it all. If a customer buys a product, the smart contract can automatically apply a discount for their next purchase, or email them a gift card, or any number of unique ideas.
People management
By now you’re probably wondering about Ethereum ID tokens for every customer and employee. This is actually easy to do, and uPort’s project proves that Ethereum can handle it with no issues.
A business can create an ID for every single person they interact with. Employees receive one and the system can manage them automatically. Customers can receive one, provided they sign up with some personal information. Even sub-contractors and partners can get one.
It’s the ultimate people management tool.
With these IDs set, the smart contracts can run millions of tasks automatically. From customer loyalty to building customer profile data for marketing purposes. The smart contracts can handle email newsletters, or send an order to a supplier when stocks get low.
The sky is the limit.
This Is Only the Beginning
Ethereum will continue to evolve. Unlike Bitcoin, which needed to fork in order for changes to be implemented, Ethereum is malleable. Developers can improve the blockchain to handle more information. They can make transactions faster.
And this will only benefit small businesses using Ethereum. Of course, businesses can use it as a payment gateway, but there’s so much more that can be done with Ethereum.
Whether the Ethereum protocol will still be in use in a hundred years is anybody’s guess, but chances are that the technology behind it will be the foundation of whatever comes next.
In the meantime, expect to see Ethereum powering small businesses sometime in the next decade. After all, it’s already doing it now.
