Blockchain for Small Businesses: Explained

ABSTRACT:
Many small business owners are of the opinion that blockchain technology is utilized only for the exchange or creation of cryptocurrencies but this is not true. This article signifies the importance of blockchain and emphasizes the ways it is revolutionizing small businesses.

ARTICLE TEXT:
A blockchain is a public, decentralized, and a digitized ledger of all the cryptocurrency transactions. Originally, blockchain has been developed as the accounting method for Bitcoin(cryptocurrency). It uses a technology known as DLT(distributed ledger technology) and is appearing in various commercial applications nowadays.

There is a massive amount of data in our current world that is unverified or fragmented. Blockchain technology promises to change how data is exchanged and stored securely. It functions as an online ledger that can be viewed by everyone. The ledger is updated when a block is verified or updated. Blockchain can be utilized to collect data from the sources which are verified in order to generate unique transactions. Applying the features of blockchain would fix few of the inherent inefficiencies of industries by updating ledgers transparently, automatically, immediately, and with traceability.

Many small business owners are of the opinion that blockchain technology is utilized only for the exchange or creation of cryptocurrencies but this is not true. This article signifies the importance of blockchain and emphasizes the ways it is revolutionizing small businesses.

Nowadays, the small businesses mainly use blockchain technology as a decentralized ledger for accepting cryptocurrencies such as bitcoin. The blockchain is used to secure the bitcoin wallet. The decentralized approach with which the blockchain technology enforces, verifies, and records transactions account for various uses. Nevertheless, blockchain can also be utilized in various contractual situations and in situations where the identity of a person needs to be verified. Below here are ways small businesses are implementing blockchain.

Money Transfers and Payments

The most famous application of blockchain is being able to receive and send payments. This makes sense as blockchain has its beginnings in cryptocurrency. Let’s know how small business owners can get benefited from this.

By utilizing blockchain, you can transfer funds securely and directly to anyone in the blink of an eye with minimal service charges. This is because there are no mediators present to slow down the funds' transfer between some banks and levying excessive transaction fees. If at all any fee is charged, it is usually a monthly service charge for utilizing merchant wallet accounts. This is actually a much better amount when compared with two to three percent the credit card companies impose on a single transaction. This practice is mainly useful if your employees are engaged in the global marketplace or placed remotely.

Smart Contracts

The computer programs that can automate various kinds of operations and processes are known as smart contracts. The most common operations and processes include payments and actionable conditions on payment. For few most common financial transactions, a small business can easily evade a web of complex costs and regulations.

The reliance on a broker, a lawyer, or other intermediaries can be eliminated by smart contracts. The smart contract execution is transparent and any of the involved parties cannot manipulate it. As these are automated contracts, they are not only cheaper and faster but also highly accurate when compared with the manual filing of forms. Your documents and business are kept safe by the cryptography that is utilized to encrypt these contracts.

Security

Cyber attacks cost organizations precious resources and valuable time, presenting a hard challenge for small businesses without the IT resources to defend against these destructive intrusions. A blockchain transaction cannot be changed once it is recorded and verified. This is due to the mathematical cryptography utilized to record every transaction and also the fact that every blockchain transaction is stored in a decentralized ledger but not in a single master ledger. This can be a huge advantage for small business as they can maintain any amount of personal data without having to fear of cyber attacks.

Rather than paying hefty fees to Google or gaining knowledge on AWS or buying a centralized, expensive server architecture, the CEO of a startup can choose to rent decentralized, custom-sized space for hosting from a blockchain platform. So, due to its decentralized nature, blockchain technology provides security for an organization’s data and is a cost-effective feature, especially for small businesses.

Track Each Stage of a Product’s Journey

Business processes which are involved in logistics and shipping know how much stress and paperwork it takes to keep and manage everything in proper order. It is very hard to monitor the current location of shipments and goods in real-time in most cases. The businesses are affected by delays in shipments resulting in extra overhead. The final product that reaches end users is not produced by a single manufacturer in most cases. With blockchain, tracking the provenance details of each component takes zero effort. Thus, with blockchain technology, it is very easy to track each stage of a product’s journey right from its inception to the shopping cart of a buyer in real-time and with no difficulty.

Final Thoughts

There are many ways blockchain can be used by small businesses to minimize time and costs. Blockchain technology streamlines your small business transactions and contracts. So, small businesses should take a cool-headed and realistic approach to leverage blockchain technology. It’s important for any individual who wants to set up a business irrespective of its size to learn blockchain and obtain insights on how effectively they can use it in their respective businesses as the uses of blockchain in the small business sector will continue to grow further in the future.