5 Ways Blockchain Technology is Changing Business
See how these industries can use blockchain technology to improve current processes.
Many people have heard of blockchain technology in the context of cryptocurrencies, especially Bitcoin. While the blockchain is an integral part of the world of crypto coins, it has been adapted in many other industries. Blockchain technology can be used in dozens of ways that are completely unrelated to Bitcoin or other cryptocurrency.
A Decentralized Digital Ledger
The blockchain is a form of digital record keeping that has advantages over other methodologies. It’s a record book that can be seen by anyone, but past entries can’t be modified. A blockchain is what allows Bitcoin and hundreds of other cryptocurrencies to record transfers.
Transactions are stored in a distributed ledger that is spread out throughout a worldwide peer-to-peer network. The ledger is open, public, and anonymous by design. It’s responsible for keeping all transaction records in a fully decentralized manner as there is no central authority that has control over the blockchain its contents or access to it.
The blockchain takes advantage of the power of cryptography to ensure all records are kept in a highly secure manner. The transaction ledger is constantly growing as new transactions are made. Every computer connected to the Bitcoin P2P network is a node that gets a copy of the blockchain as soon as it joins.
How Does the Blockchain Work?
Once a new block of data has been added to the ledger, it stays there permanently. Removing or modifying it is nearly impossible without having a majority of nodes agree on rolling back transactions to a certain point in time. If a user wants to add data to a blockchain ledger, all nodes connected to the network will run an algorithm to determine whether the proposed transaction is valid.
This is how transactions are processed with Bitcoin. Each transaction is verified to ensure that the user has enough coins in their wallet and isn’t trying to spend coins twice. If the majority of nodes agree that a transaction is valid, a new block is created and then added to the chain.
Main Benefits of Blockchain
- Faster processing times: This is useful for finding data, confirming transactions, and settling potential disputes.
- Lower costs: The need for overhead and intermediaries is greatly reduced.
- Highly secure technology: The blockchain has been proven secure by being used for many years with cryptocurrencies and it can reduce the risks of embezzlement, fraud, and data tampering.
- Everything kept in a single ledger: This ensures all necessary data is accessible when needed and lowers the amount of digital clutter an organization has to deal with.
- No need for third parties: Two connected parties can make exchanges without the need for a third party to oversee it.
- Highly reliable technology: The design of the blockchain makes it completely decentralized, eliminating the possibility of a single point of failure and increasing its resilience to malicious attacks.
How Does Blockchain Affect Businesses?
Transactions on the blockchain are stored in a highly secure manner that allows for easy verification later on. Blockchain technology has the potential to change the way we do business by offering trust in a simple and affordable manner. Records in a blockchain can’t be altered, which allows all assets to be tracked. Therefore, even if two participants don’t fully trust each other, they can be sure that whatever is contained in the blockchain is reliable.
There are many areas where blockchain technology can be deployed, like financing, renewable energy, funding, marketing, supply chain, and more. Here are some examples how blockchain works in those areas.
Blockchain in Financing
The popularity of digital wallet apps has increased a lot in the last decade. Many of them are powered by blockchain technology, which cuts out the middle man from financial transactions. Using the blockchain also eliminates the need for currency exchanges in international transactions. Furthermore, blockchain-based payment solutions usually have lower payment processing fees compared to centralized ones.
Blockchain in Crowdfunding
The blockchain can be an excellent alternative to other crowdfunding methods. It provides opportunities for startups and small businesses with solid business models to raise funds through Initial Coin Offerings (ICOs). This involves issuing cryptocurrency tokens at lower prices to the public, which then increase in value.
Blockchain in Intellectual Property and Contracts
Intellectual property is a topic that is frequently discussed in the age of the internet. Global connectivity makes it easy to share your innovative creations. Unfortunately, it also makes it easier for malicious individuals to steal them and even claim them as they own. Proving that an intangible idea or concept was yours before it was stolen and monetized by someone else is often quite difficult.
With blockchain, claiming ownership of data is pretty straightforward. The technology stores data in a permanent way that can’t be manipulated. This lets you show to the world that a certain idea was yours from the very start.
Blockchain in Manufacturing
Another potential application for the blockchain is in supply chain management and auditing. Smart devices using the Internet of Things (IoT) can use the blockchain for order acceptance and processing. For example, smart contracts can be used for 3D printing orders, making sure that anything being printed is done exactly to specification. This is important in industries like aerospace, where precision is highly important.
Blockchain and Signatures, Promotions and Coupons
The blockchain is perfect for authentication and validating digital signatures, since you can always be sure that a signature is authentic and trace its source. The blockchain’s ability to process and store huge amounts of information in a distributed manner lets it be used for almost any business transaction. This can include uses as diverse as managing employee shifts to keeping track of how much materials a factory has.
Another innovative use of blockchain technology is keeping track of promotions, including coupons and discount offers. The authentication provided by the blockchain allows you to create unique coupons that can only be used once, as well as keep track of how many customers are benefiting from a certain promotional offer.
Blockchain technology is used to power cryptocurrencies like Bitcoin, but this is far from being its only use. The blockchain can be applied to many other industries and has often been dubbed as the business model of the future. It can do things like allowing people from all over the world to send and receive payments securely, reliably and with very low transaction processing costs.