What is Blockchain and Why Does Your Business Need it?

Thanks to the incredible hype surrounding bitcoin and cryptocurrency over the last few years, blockchain is a big buzzword thrown around the world of technology and finance. Although there are countless references in movies, pop culture, and even the everyday business world, many business owners still don’t fully understand what blockchain really is. Needless to say, they don’t know just how it can help their business, either.

Blockchain services has the power to reshape not only the world of finance but also video game companies, retailers, and many other businesses across industries. Smarty companies even partner with Blockchain consulting organizations to ensure that they are using the technology as effectively as possible for their specific niche – and it can also be a bit of a confusing topic to fully understand for those not working with it day-in and day-out.

What is Blockchain?

Many businesses lose money due to issues like procedural delays, fees paid to middlemen or intermediary services, and old fashioned human error. These problems are definitely not new for business owners, but there is finally a modern solution for these common issues: blockchain. The power of this technology allows companies to speed their business up while eliminating silly errors and helping to get rid of middle people and services.

To put it simply, blockchain is a type of technology that records transactions into a digital ledger. Once the transactions are in the said ledger, they can’t be changed or altered. These “blocks” or records of information are then linked using cryptography. As the name implies, these blocks are linked together to make a series of data.

While data isn’t removable from the ledger or chain, more data is addable in the form of new blocks. This is very valuable for entities transacting with one another. With the distributed ledger technology, participants with the necessary permissions are then able to access the same information at the same time to build trust, improve overall efficiency, and remove any type of friction.

Blockchain gained quite a bit of admiration from a wide variety of users due to the fact that it isn’t owned by one single entity, meaning that it’s decentralized, and the data is cryptographically stored. Once data is inside the blockchain, no one can tamper with it and it’s immutable. The blockchain itself is transparent, so users have the ability to track the data if they please.

Blockchain is already revolutionizing the world of finance and industry. It’s also quickly becoming an ally for the healthcare sector and is helping to lead the way towards a smarter energy sector when paired with the Internet of Things and artificial intelligence.

Why Do Businesses Need Blockchain?

Blockchain is an exciting new addition and even a replacement for traditional methods of currency, transactions, and centralized banking. Not only is this changing the way that businesses handle financial transactions, but also offers alternative uses that will eventually change the world in other ways.

From day-to-day advancements to long-term solutions, blockchain has the ability to majorly shake things up for businesses in many ways, including:

More transparent contracts

Every business experiences situations where a contract is ready for signatures from all of the involved parties, but then suffers delays when getting started on the project. This delay is typically caused by it taking a long time for everyone to read and sign the final version of the document.

Smart contracts powered by blockchain help to eliminate this problem. A smart contract is a self-executing contract in which all of the terms for all of the parties involved are directly written into the code. The terms and code of the contract then live on a decentralized blockchain network.

Every involved party always has access to the most current version of documents. By eliminating the need to send out revised copies and ensuring that everyone is working off of the same one, businesses save time by skipping the wait for approvals and signatures.

This also helps to ensure that companies get paid once they deliver on their end of the deal while guaranteeing goods or services should the other party back out, even on short notice. Smart contracts are ideal tools for companies to use when they are doing business with people they aren’t familiar with and such.

Paying employees and tracking finances

As blockchain began in the world of Bitcoin and cryptocurrency, it’s also a great application or method to pay employees. Blockchain allows companies to compensate their employees in less than an hour without having to deal with the ridiculous transaction fees associated with traditional banking.

Paying employees or contract workers via blockchain is especially useful when the employees are based remotely. It can also help save companies money in other ways. For example, transactional records in blockchain make it easy for businesses to track their cash flow and manage all of their payments. This makes tax season much less stressful as well.

Improved marketing campaigns

Good marketing is absolutely vital to any company looking to succeed in today’s marketplace. However, blockchain can help companies boost their marketing efforts and make them even more successful.

Marketing experts use blockchain to track client information and behavior to study customers over time. With this information, they then build better, more behavior-backed marketing tactics and campaigns to bring in a larger return on investment for the company. The ability to track things within blockchain makes it easy to identify any changes made throughout the campaign. Additionally, should a mistake occur, it’s easy to see what happened, when it happened, and helps easily identify the responsible party.

Conclusion

Although blockchain began in the financial sector and within the world of cryptocurrency, it’s already expanding far beyond finances. Blockchain has already begun to make everyday business practices easier and more efficient. From budding entrepreneurs to enterprise-level corporations, blockchain is undoubtedly going to soon continue to take over more and more of these processes and procedures.

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