The decentralized ledger technology isn’t something new. In fact, computer scientists have been discussing the theoretical creation of a similar system since the 80s and 90s. However, the rise of cryptocurrencies has brought blockchain to the general public’s attention. Investors putting capital towards buying and selling digital assets are constantly checking the ETH price chart before starting any transaction on the blockchain, as it helps them become more successful in their endeavors. As such, the blockchain works closely together with several other tools and systems.
And while the crypto market is progressing, as it is currently taking tentative steps back from the slump it hit in 2022, researchers believe there are many other areas in which the blockchain could help. In the wake of the pandemic, industries have been confronted with many of the limitations of their systems and were forced to deal with challenges they were largely unprepared for. Blockchain could offer a solution in this regard, as it is believed by many to hold the answer to many of the problems business owners are dealing with nowadays.
Inexpensive payments
One of the most critical aspects that blockchain can help with is making payments faster and less expensive. Virtually all the money that goes through financial institutions has to be processed accordingly. This adds several layers of complexity to the whole process and complicates it. There are also more fees that can pile up and become costly. Enter blockchain, a system well-renowned for its ability to power transfers that only take a few minutes or even seconds to complete. There are many benefits apart from the speed as well, including:
- Lower fees: When your customers pay using credit or debit cards, you have additional fees for processing that cut into the overall profit. Using blockchain helps significantly reduce or even eliminate these extra costs.
- Streamlining: There can be many hurdles within a business, and you might find that procedures lag as a result of complex practices. Blockchain can help make things more efficient, streamlining processes and ensuring your business works faster and cleverer.
- Insufficient funds: Customers sometimes make mistakes and pay for their goods with a card running out of funds or a bad check. This can cause losses and extra fees for you and may even imply legal hassle. When you use the blockchain, you’re confident in the knowledge that inadequate payments can be detected within minutes of being placed, so there’s nothing for you to worry about.
- Smart contracts: Used to power cryptocurrencies, smart contracts can help keep track of transactions and address any issues that may intervene during the process. The risk of human error is also reduced when your employees work using this system.
Combating fraud
Fraudulent activities are one of the main concerns for business owners everywhere. They are costly endeavors, and you have to spend a lot of time and resources to solve them. Your employees will also have to postpone some of their other tasks in order to help throughout the process, leading to your business stagnating. To top it all, it can also cause your reputation to take a few hits. In today’s competitive market, you need all the tools at your disposal to put up a fight against your competitors. If your clientele learns that your business is susceptible to fraudulent activities, that can lead to them losing their trust in you and moving over to your competitors.
Blockchain’s fraud resistance is intrinsically tied to the ways in which it operates as a system. Once data has been entered into the network and secured, there’s no further way to alter or modify it. Also, because it is a decentralized system, no single individual or organization is in charge of everything. Everyone using the blockchain has access to an identical copy of all the data entered into the system. Every single employee can view the business’s transactions and processes, so if something suspicious shows up, it can be dealt with promptly before it causes further damage.
These features also make the blockchain resistant to hackers or any other kind of cybercriminals. These individuals are known for their propensity towards attacking businesses and large serves. They are the preferred option over individual users due to the sheer quantity of data they host. As such, they can access thousands of your customers’ bank accounts. Denial-of-service attacks are pretty common within businesses as well. Using blockchain can help you bypass them. That’s because to infiltrate the blockchain, a hacker would have to alter over 50% of the copies present in the system. This is a nearly impossible task, particularly with the way in which the blockchain changes very fast all the time.
Overall benefits
Automation has brought many benefits for businesses, making processes faster, more efficient, and overall easier for employees to tackle. The blockchain is the next step in this process, aiming towards increasing change. Some of the other benefits of using the system in the business world include the following:
- Market reactivity: When the digital aspect is secure and working correctly, financial issuers can create financial instruments that are perfectly matched to market demands.
- New markets: The blockchain allows faster development, making transactions more scalable and secure. This also helps expand the use of blockchain to various assets, micro-economies, etc.
- Trust: The blockchain is a fully transparent solution. As an immutable ledger, it is easier for all the parties involved to manage data, collaborate and reach agreements that fit everybody.
- Privacy: Because the blockchain is a transparent tool, you shouldn’t believe privacy takes the backseat. However, it can also allow granular data sharing, which permits selective sharing across all layers of the business network. This helps maintain confidentiality.
- High-performance: The blockchain can handle a large number of transactions occurring every second, as well as periodic activity surges.
While the blockchain isn’t yet used at a global scale, and there’ll still likely be some time until that happens, there’s no denying that the decentralized ledger is one of the technologies that will impact the future significantly.
