5 Good Reasons To Bring Blockchain In Business
Over the past few years, Bitcoin and other digital currencies went through significant enough price surges that they are now monitored regularly in mainstream media outlets. While a proportion of population abstained from being a part of trading, others invested heavily.
Since 2017, Bitcoin, Ethereum, and a couple of other altcoins are going through price fluctuations, which are being watched closely in the global market. Bubble warning announcements from investors, price fluctuations by “whales” and other key players, exert an influence on the value of these digital-currencies, which could take years and some regulation before they achieve mainstream acceptance as a safe investment option.
However, the technology solution behind the bringing up the digital-revolution known as the Blockchain popularly known as “smart contract” and ledger technology has much more in-built potential, which is yet to be explored. Entrepreneurs and large corporations have already started taking a step forward in exploring ways to improve and overhaul existing processes using Blockchain. In this context, we will explore some of the ways it could impact or applied to the existing business model.
Financial sector
The term “Banking” interprets in various forms as per one’s perception. Some find it monetary depository while others consider it as an entity that offers certain funds at some rate of interest. Broadly emphasizing this term, we’ll agree to the fact that banking is an important part of one’s life-cycle.
Besides providing easy management of monetary funds, banks offer numerous services like loans, cash transfer and many more. However, if we look for an improvement in the services provided by the majority of banks, we’ll come across the fact that this financial organization still lags in putting “Digitalization” into play. There are certain issues that people face in their daily life and find it cumbersome while banking! The Reason is that banks are using outdated systems, which bring users under risk from phishing, social engineering, and cyber attacks.
These are just a few of the reasons why the financial sector needs the blockchain solution to transform the obsolete banking structure. Several worlds’ leading banks have already joined a consortium, known as R3, to create Corda, a distributed ledger platform that meets the highest standards of the banking industry, to improve the speed and security of financial transactions for both consumers and businesses.
Asset management and tracking
Asset management has been easy because one needs to deal with many data, keeping it safe, secure and accessible. Thus, there is an utmost need to make use of Blockchain to make it hassle-free and adept in all terms. For instance, a World leader in shipping logistics, Maersk, has already started working over the trial of the Hyperledger Fabric to track shipping containers around the world, while keeping the records safe and unaltered. This blockchain application created by IBM and Digital Asset, promises to host a “chain code” of data, more securely than traditional asset management and tracking systems.
Taking a step forward over this aspect of blockchain technology are finding that blockchain features such as the security of the records are worth looking into further, compared to traditional software especially when records can be modified too easily.
Smart contracts
While Bitcoin has been getting a ton of attention from investors globally due to its rapidly rising stock, major financial institutions have also become interested in Blockchain and smart contracts. It has proven to be an effective tool in wiping off the need of any “middle man” and execute a transaction as soon as a meeting of a specific set of criteria. Further, Smart contracts, compared to traditional contracts, can bring Enforceability in the system that requires the confirmation of all participants in the smart contract after all the terms are met. With the relevant proof, the contract is enacted, while failing to adhere to the prescribed terms and conditions, this would mean the payment is withheld. Now, the big question is, how can these contracts impact businesses and their transactions?
The benefit of using smart contracts for businesses comes in the form of improved speed, and reduced cost that is executed as soon as all the conditions of the contract are met, thereby, allowing funds transfers between parties in no time. Further, these transactions are all monitored through software that automates the entire process, which cuts the cost required to execute than our current transaction methodology.
Even though being impressive, smart contracts are not known to a large population because of the popularity gained by the digital currency, Bitcoin because of its soaring stock, has overruled the importance of smart contracts in the global market. While an average population may relate a smart contract from Apple smartphones or smartwatches, but they would not find it comfortable to adapt to the transaction methodology. There are also legal grey areas when it comes to smart contracts; e.g. only in Arizona, one of the U.S. state in the southwestern region of the United States digital signatures on smart contracts are considered legally binding. In all other States, there are either no laws or very vague laws, on smart contracts. Henceforth, to be accepted and gain widespread popularity, some social marketing, and legal groundwork may need to be done.
Improving security
With Online scams being on the hike, Businesses of every size are at risk. In the last few years, getting through the online world safe has become a real concern and further looking at how intense, and sophisticated some of the recent hacker attacks around the world have been, it seems like things are bound only to get worse.
Even though hackers are getting better at hacking, the ways to combat them are also improving very fast. We have a nearly impenetrable technology, known as Blockchain. Blockchain can be used to protect our data from cyber attacks and improve cybersecurity across industries which unlike traditional servers and data stores, including the cloud, where everything is in the same place making it prone to cyber attacks. Blockchain is considerably more secure than traditional security systems because the data stored in a blockchain is decentralized with multiple computers, or nodes, storing pieces of the information.
Thus, decrypting a whole network is a near impossible task, which means confidential data is safer over the blockchain network.
Data compliance and records
Undoubtedly, business data is a valuable asset, and it needs to be kept safe and confidential. However, Cybercriminals are discovering smarter ways to gain access to the systems. Thus, entrepreneurs’ needs to adapt to the blockchain interface, which are the distributed networks having billions of users all over the world, adding information to the Blockchain simultaneously which secures itself through cryptography that verifies that the data added to the Blockchain is real. Further, this verified piece of data forms a block which then has to be added to the chain. To do this, blockchain users have to use their respective keys and powerful computing systems to run algorithms that solve very complex mathematical problems. When a problem is solved, the block adds to the chain and the data it contains exists on the network forever, meaning that it cannot be altered or removed.
To make updates to a particular piece of data, the owner of that data must add a new block on top of the previous block, creating a specific chain of code. If anything, even something as small as a comma, gets altered from how it appears in a previous block, the entire chain across the network also changes accordingly. This means that every single alteration or change to any piece of data tracked and absolutely no data is lost or deleted because users can always look at previous versions of a block to identify what is different in the latest version. Using this thorough form of record-keeping makes it easy for the system to detect blocks that have incorrect or false data, preventing loss, damage, and corruption.
Henceforth, blockchain technology is crafted in such a way that there is no central authority or storage location, whereby, every user over the network plays a part in storing some or all of the Blockchain.
Summing up to these aspects, we may infer the fact that Blockchain being the most potent distributed-ledger technology poised to revolutionize the way entire industries do business from supply chain tracking to real-estate transaction processing and the intermediaries. Hence, as a long-term solution to data security, record keeping, and compliance, Blockchain has numerous uses that will make it easier for businesses to operate and grow. Further, blockchain technology hasn’t been limited to digital currencies for exchange but advanced to change the way we do business and foster growth in reshaping several industries in domains like finance, healthcare, government, and manufacturing; thereby, this technology will continue to evolve and used in more innovative ways.
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