As more practical business applications emerge, blockchain technology is capturing the attention of the business world. Here are the benefits that leaders are envisioning for businesses who embrace the practical applications of blockchain.
Blockchain technology is famous as the mystifying technology that supports cryptocurrencies. The likes of Bitcoin have had a dramatic run in the public eye, bringing blockchain along with them into the spotlight. But that has not stopped developers and influencers from considering practical business applications of this nascent technology.
Blockchain has the potential to become a game-changing force, not only in government and finance (where is more well-known) but in other industries, too. According to PR Newswire news, the global blockchain market was valued at USD 708 Million in 2017 and is expected to reach USD 60 Billion by 2024.
One thing is true: as more practical business applications emerge, blockchain is capturing the attention of leaders in the mainstream business world. Many leaders are already investing along these lines, including Walmart, DHL, and the World Wildlife Fund (WWF). As these pioneers lead the way, it won’t be long before other leaders will be thinking about blockchain too.
Here are the benefits that thought leaders are envisioning for businesses who embrace the practical applications of blockchain.
Ease of cross-border payment processes
Financial companies have many of the same pain points as the first adopters of bitcoin. For that simple reason, they have gained the most ground in using blockchain technology for business solutions. The core impact of blockchain has been, after all, to facilitate digital payments via cryptocurrency. Verifying financial information and transferring assets is the core of their business.
The strategic value of blockchain is even more apparent with cross-border payments. These typically require at least two intermediaries, not to mention geographic challenges like time zones, varying regulations across borders, and foreign languages, just to name a few.
This is why 90 percent of major banks in Europe, North American, and Australia are currently involved in developing blockchain, according to one McKinsey. Another recent news reveals that more than 40 central banks are testing blockchain technology.
In all likelihood, the first round of business adoption of blockchain will be in the area of cost reduction. The underlying feature of blockchain is that it removes the need for third-party assistance with a wide range of business transactions. Take the cryptocurrency example. The main attraction of using a blockchain-based currency has been the ability to transact money without the need for bank-based validity or a government-backed identification system.
Trust is established by the blockchain technology itself, allowing two parties to trust that the money will go where they want it to go.
Likewise, businesses can transact data without an intermediary. One sector where this is showing true promise is providers in the healthcare system. Exchanging medical records requires enormous amounts of overhead, especially when it comes to record keeping. The decentralized ledger of blockchain simplifies data storage and access. It also bolsters security and enhances privacy protections for patients, all without the need for third-party solutions that dominate the process now.
One of the more exciting practical blockchain benefits for consumers is enhanced access and control of their private data. As privacy concerns mount in the public eye and as security breaches capture their attention in the news, more are demanding upgraded privacy measures in the companies they choose to do business with. This trend is set to grow with time.
In the meantime, businesses are now faced with tighter security and privacy regulations. This comes thanks to the EU’s General Data Protection Regulation (GDPR), which dictates how data is collected, stored, handled, and shared for all EU citizens. Since we are all digital citizens and the internet knows no international boundaries, the GDPR affects virtually any business owner regardless of where they are based.
Supply chain transparency
Blockchain can track goods along the entire length of a supply chain, offering quick-and-easy visibility to industrial companies. They can leverage this to create greater transparency with their customers, who are increasingly demanding it. Manufacturers can provide evidence of the high quality of their materials and raw ingredients.
The fashion industry is at the beginning stages of a “transparency revolution”. Concerned about sweatshop conditions around the world, customers are increasingly demanding to know where their clothing is made. Retailers who practice ethical sourcing are eager to help their customers understand their products and blockchain technology will be their solution.
Efficient processes, especially when collaborating
The underlying business benefit of blockchain is the validity of data that’s made possible by an encrypted, distributed database. Going right to the root of blockchain, it is fundamentally a super database. So imagine what businesses can do with a super-charged data storage system. The possibilities are endless.
When business units have fast, democratized access to important data, they can meet their team goals faster and with more confidence, knowing their data is valid.
When individual employees have fast, easy access to important company documents, they can do their jobs faster. When remote teams have fast, easy access to important information that is authenticated (trustworthy), collaboration is even more productive.
One area where serious inroads have been made is property ownership records. Titles and other land registry information can be stored on blockchain ledgers, which erases doubt about who owns real estate property. In the real estate business, this can dramatically alter the way property gets sold. With the traditional way, there are lots of openings for potential fraud, such as forged signatures, for example. Blockchain eliminates not just these possibilities but also the chance of flaws in the paperwork and other common problems in this business.
Because the information stored on blockchains is essentially unalterable, it is immensely easier for managers to track internal data. With access to reliable data, internal audits become faster and easier. The State of Delaware is already allowing businesses to incorporate via a blockchain registry. The system promises better regulation of stock owners in real time.
The same features that make supply chain transparency also make event tracking easier, too. When an issue arises (a safety incident, for example, or contamination in a food supply chain), managers can quickly and easily track the origin of the problem and react faster to fix the problem. This also works in a preventive manner, where managers can quickly identify where problems started and work to find solutions to prevent future incidents.
To Sum Up
The blockchain technology is increasingly being adopted within several industries, beyond the financial and government sectors where the use of this technology is more traditional.
From cost reduction solutions to privacy enhancement to entirely new business models that will someday emerge and that will replace intermediate trust agents, blockchain holds tremendous potential for businesses. It is still a young technology and as it stands now, adoption is slow as leaders explore the risks and challenges. But we will be watching as it emerges from under the shadow of bitcoin to reveal a bright future as a business essential.
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