6 Ways Blockchain Technology can Help Your Small Business
The excitement surrounding Bitcoin and other cryptocurrencies has been hard to miss. If you’re familiar with Bitcoin’s revolutionary cryptocurrency then you’ve already been introduced to an innovative technology known as “blockchain”.
A blockchain is a transparent digitised public ledger – in essence, an unhackable record of transactions – maintained by the blockchain’s users, hosted on each user’s computer. A truly transparent system, everyone involved has access to every blockchain transaction in real time.
To a business owner, the value of secure financial transactions may be obvious. However, blockchain technology offers much more than a safe option for data transfers. Once you can imagine the variety of applications blockchain technology has to offer, you’ll understand why some are calling its development more important than the internet.
Here are 6 benefits of using blockchain technology in your business:
1. Easier Access to Capital
One of the great benefits of blockchain technology is it opens up opportunities for anyone to access funds, minus the arrangement fees and paperwork. Using a blockchain, lenders can authorise financial agreements with another party, sidestepping the administrative burden that comes into play when “middlemen” are in the picture. Some financial institutions are already working with blockchain technology to offer small enterprises attractive financing solutions at much lower fees. Moving to this type of technology benefits all parties as accountability is improved and transaction tracking is streamlined.
2. Save Money on Payment Transfers
The use of blockchain technology to transfer money to employees, vendors and suppliers anywhere in the world also offers businesses significant cost savings. With the blockchain there’s no need to transfer funds between financial institutions, so you can avoid incurring bank transaction fees. Business owners who operate internationally know all too well how quickly transaction fees can add up. A simple bank transfer, for instance, typically includes an origination fee, transfer fee, receiving fee, and a percentage on the foreign exchange fee.
3. Sign Smart Contracts
A blockchain “smart contract” allows two parties to enter into a binding agreement without the need for a notary or registration authorities. Smart contracts can help businesses move forward with their business plans more quickly, while lowering costs on legal fees and documentation. It’s expected that smart contracts will revolutionise the financial and real estate industries by simplifying and automating agreements, eliminating legal and accounting costs, while also lowering the risk of fraud.
4. Protect Intellectual Property
Blockchain technology, including smart contracts, can also be used to help protect a company’s intellectual property (IP). In addition to easily registering and clearing IP rights and tracking the distribution of unregistered intellectual property, business owners can use the blockchain to establish and enforce agreements and licenses, making it much easier to collect on royalties and payments.
5. More Secure Cloud Storage
As cloud storage becomes more secure and more affordable, more companies and individuals are joining in on the revolution. From smartphone owners storing their photos and videos in the cloud, to corporations moving their critical files to cloud storage, this trend is already underway.
Even so, traditional cloud storage has some drawbacks, and the blockchain hopes to address those issues. Blockchain technology promises to make cloud storage safer, more secure, and hack-resistant. Those advantages are sure to be attractive for both individual users and corporations.
6. Improve Customer Loyalty
By tapping into the blockchain’s secure digital verification capabilities, small business owners can streamline their loyalty rewards program. Businesses and customers can interact through a smart contract using digital wallets and social media. This streamlined execution of what can be a time-consuming project for a small business owner can result in hours of saved admin time and personnel costs.
While cryptocurrencies like Bitcoin and Ethereum have received the most attention, it is the blockchain (and not new forms of payment) that show the most promise.
This article originally appeared on the blog of our member firm, MHA Carpenter Box.