When bitcoin first arrived in 2009 it also brought along a source code dubbed the blockchain along for the long ride. The blockchain, which is a virtual, shared ledger, has since disrupted not only the payment industry, but also businesses across multiple industries. In fact, these disruptions are so beneficial for businesses that it’s surprising that many of them have yet to join the blockchain.
But, if you’re still not convinced, here are 12 reasons why your business needs the blockchain.
1. Thwarts payment scams.
The most discussed benefit regarding the blockchain is how it can prevent payment scams. This is possible through;
- ‘Smart contracts’ that ensure that both parties follow through with an agreement by creating an escrow type system.
- Tamper-proof public ledgers which makes it difficult to alter, counterfeit, or double-spend coins.
- Decentralization which prevents manipulation from occurring since there isn’t a central point of failure.
- Transactions are transparent so that people can’t ‘cook the books’ or price gouging, like Enron did.
While the blockchain won’t stop each and every scam or security threat, but it’s definitely more promising and secure than the current infrastructure.
2. Improves enterprise collaboration.
“Today, collaboration tools are changing the nature of knowledge work and management inside organizations,” write Don and Alex Tapscott in the Harvard Business Review. “But there are clear limitations to today’s suites of tools, as we still need central intermediaries to establish trust and coordinate much of the capability.”
This is a promising opportunity in blockchain-based systems. For example, “if every employee had their own profile, which they owned and controlled, employees and companies would be able to keep data, rather than give this private information to large social network companies” because blockchain social networks are infinitely higher in privacy, richer and more flexible than current networks.
3. Industrial mash-ups.
The blockchain will also open the doors to new partnerships between businesses, which Ernst & Young calls it an “industrial mash-up.” This means that alliances between one or more parties can allow for the use of assets or capabilities of another party to create new business value. Best of all? The blockchain technology occurs without impacting the other party’s use of the assets or capabilities for their original business purpose.
4. Opens-up manufacturing.
The blockchain can also help introduce new markets for manufacturers of all shapes and sizes. Take for example 3D printing. While it’s revolutionizing mass customization, there still needs to be a central platform to sell their wares and protect the intellectual property (IP) of their creations.
As the Tapscotts explain, “With blockchain, data and [the] rights holders can store metadata about any substance, from human cells to powered aluminum, on the blockchain, in turn opening up the limits of corporate manufacturing while also protecting intellectual property. New markets could enable buyers and sellers to contract more easily in an open market.”
5. Cuts out the middlemen.
Remember, the blockchain is a peer-to-peer system. This means that transactions are only between you and the other party. This simple two party system is capable of facilitating cheap ecash transactions from anywhere in the world. For example, you could be a business located in in the U.S. but receive a payment from a client in China without having to pay for any transaction or currency fees that traditional banking or financial institutions have charged in the past, and continue to charge, now.
The blockchain also removes third-party individuals like lawyers, realtors, and banks when transferring a property title or house deed. This not only saves businesses from pricey fees, it would also speed the process up from a day to hours.
6. Facilitates the growth of the Internet of Things.
If there is another promising technology out there besides the blockchain — it’s the Internet of Things (IoT). By using blockchain technology, there is now an automatic go-to registry for the ownership and maintenance for everything within the Internet of Things. This not only makes security concerns a thing of the past, it can also eventually allow for equipment to automatically repair itself upon your approval.
7. Access to high quality data.
Blockchain data will always be “complete, consistent, timely, accurate, and widely available.” This will allow you to make more informed business decisions and monitor all of your business happenings in real-time, such as incoming payments, shipping information, and customer information.
8. Real-time transactions.
As I’ve mentioned several times, the blockchain is a decentralized, P2P system. This means that instead of waiting days or weeks for transactions, contracts, and deeds to clear, they happen almost instantly. This definitely increases your cash flow and helps your business do things that move your products faster to the marketplace.
9. Increases cloud-storage.
Cloud-storage is a necessity these days. But, you don’t have control of where your potentially critical information actually goes. Who, exactly, sees your information? What, exactly, is done with your private information. Your most private everything is controlled by companies like Google, Apple, Dropbox, and Facebook. Additionally, if you’re concerned over your privacy, you don’t want to use these services.
Since the blockchain requires an encryption key, you can be certain that no one can access your data except for you. For example, there are companies like Storj that provide more cloud storage at a cheaper rate than Dropbox.
Performance related pay is a financial reward system for your employees in which part or all of their monetary compensation is based on their performance. By leveraging smart contracts, you business can automatically enforce these pay-for-performance agreements.
11. Reward users.
Besides rewarding employees, you can also reward your loyal customers using blockchain technology. In fact, the blockchain can improve loyalty programs by giving customers the chance to trade points among each because transactions would be recorded in the public ledger.
It would allow customers to use points at different vendors. For example, in the blockchain system you can use your airline points at your favorite coffee shop or eCommerce site.
12. Improves regulatory compliance.
Regulations and compliance have become popular topics since the economic crisis of 2008. In fact, there’s an entire industry, RegTech, that is currently booming. Blockchain extensions have the power to keep transactions secure, as well as notify businesses of the latest regulations.
Furthermore, the blockchain will play an important role in KYC (know your customer) and AML (anti-money laundering).