Why is Blockchain Technology important for Small Business?

5 minute read

Nowadays Blockchain is one of the fastest growing technology, it provides endless solutions for secure business transactions.

Blockchain is on its way to becoming a major solution for governments, industries and people, despite the lack of awareness and understanding of how it works. However, you don’t need to understand all of blockchain’s working principles to realize its benefits and tap into this technology. For instance, not many people can tell you exactly how the internet operates but internet technology has become an essential part of our lives. We can say that all industries are powered by the internet.

Blockchain offers many attractive opportunities for businesses of any size. Large corporations are either already incorporating blockchain or considering doing so, because its technology makes trust, transparency and immutability a reality for its adopters. Small businesses may feel they are not able to keep up with this fast growing technology, but they can’t afford not to.

To help you understand the potential of blockchain for small business, here is a brief ideas on how small business owners can take advantage of blockchain technology.

What is Blockchain?

Well, defined simply, blockchain is a digital, secured, distributed, and decentralized of transactions. It allows a network of untrusted parties to exchange commercial transactions by verifying and agreeing at regular intervals on the true state of a distributed collection. Each collections can contain different types of shared data, such as transaction records, attributes of transactions, or other pieces of information through a clever mix of cryptography, the collection is secured and does not require trusted nodes or centralized of transactions like traditional networks does. This is what allows Bitcoin transfering value across the globe without the need of traditional intermediaries such as banks.

What is Blockchain Technology?

Blockchain is a distributed database. Think of the blockchain as a large spreadsheet, there are copies of it on thousands of computers called nodes. and these nodes connect to each other, forming as a chain. When we make a new entry, every copies on the chain gets updated. Every entry has a timestamp too so tampering is almost impossible. The blockchain is also cryptographically secured, which makes hacking extremely difficult.

What are the advantages of Blockchain Technology for Small Business?

Blockchain technology has many advantages for small business as listed below:

  • It’s cheaper than traditional technology in developing. Simply because it’s decentralised system of nodes, so there’s no need go-betweens.

  • It’s saves time. The blockchain acts as a single shared database that’s always updated. If you’re on a blockchain network, there’s no need to create and maintain your own database.

  • It’s safe. The information has a timestamp, so tampering is extremely difficult. And there’s a copy on every node in the chain so if a node runs into issues, this won’t affect the database.

  • It’s transparent. Everyone on the network can see what’s on the blockchain (as long as they have access through a secure key).

How can Blockchain Technology help Small Business?

Here is a brief ideas on how small business owners can take advantage of Blockchain Technology:

Fast and Secure for Money Operations

Blockchain has its roots in cryptocurrency, so the idea of fast and secure fund transfer makes perfect sense. No matter what operation you choose to execute through blockchain such as accepting payments, paying vendors, subcontractors, transferring wages to employees blockchain makes the process smooth and secure.

Before the advent of blockchain, we had only the banking system for payments and transferings money. We had to rely on an intermediary we don’t really trust and were charged for its services.

Most blockchain transactions have minimal fees and real-time seamless money operations with a layer of security. Blockchain transactions are not restricted by country borders, enhancing opportunities for businesses to grow globally, employ foreign workers and collaborate with foreign partners.

Smart Contracts

Business is about transfer of value between parties. Blockchain provides a secure environment for the execution of digital contracts. Smart contracts is the technology that works on top of blockchain.

Smart contracts are unique self-executed coded agreements that guarantee to deliver outcomes, provided all predetermined conditions are met. By translating contracts into sophisticated translated code, it provides a risk-free way for businesses to manage and regulate relationships with vendors and subcontractors.

Smart contracts reduce the need for lawyers and save the businesses expense of legal proceedings. As long as conditions are met, value transfer happens no matter what. Contracts are safely stored on blockchain or deleted by either party.

Supply Chain Operation/Tracking Shipments

Businesses whose processes in shipping or logistics know how much paperwork and stress it takes to manage and keep everything in order. In most cases, it is hard to keep track of the current location of goods and shipments in real time. Delays with shipments can affect businesses strained relations with partner’s smooth supply chain operation.

Blockchain makes it possible to track and keep records of each stage of a product’s journey from its origin to the buyer’s shopping cart in real time and with no hassle.

Safe Cloud Storage of Data

Businesses and personal users spend a lot of money on cloud storage every year with storage space remains unused and users must entrust their precious data to centralized providers whose servers can be destroyed or hacked anytime from anywhere.

Blockchain applications allow users to store data in a safe way and for reasonable prices with no compromising on data security or overspending. The idea behind cloud storage is simple, all blockchain users can mutually store data on each other’s computers by renting additional hard drive space. Stored data is encrypted and access is limited to those who have the cryptokey. Blockchain offers a solution that enables businesses to reduce costs, earn more money and keep their data secure from cybercrime.

Smart Devices

Devices can be connected with another through blockchain to form one autonomous network for efficient device-to-device communication, operation and decision-making.

Conclusion

Blockchain will work for small businesses in the same ways it works for a huge corporations today. Blockchain’s potential is yet to be fully used, nowadays developers are trying to discover more applications and solutions for business and personal use in the near future.

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