How Can Your Business Benefit From Blockchain Technology

19-09-2021

Share

Blockchain has emerged as a revolutionary technology in the past decade, continuing the hype in the present times. People have a misconception that blockchain technology is only applicable for the crypto transactions like Bitcoin. The success of cryptocurrencies like Bitcoin is indeed due to the decentralized distributed ledger systems of blockchain technology, but it can be implemented in every industry to facilitate convenient business operations and transactions. Most popular companies, government agencies, healthcare and financial institutions are adopting blockchain for its favourable business characteristics. If you are still dubious about how blockchain can be useful for your business, here are a few reasons to adopt blockchain technology and enhance your business.

 

WHAT IS BLOCKCHAIN?

Blockchain is a decentralized, distributed ledger of transactions that records every transaction into a block, and each block is well-knitted to its preceding and succeeding blocks forming a peer-to-peer network across systems. The entire network is decentralized ie., no single party has complete control over the network, the information gets shared on every node of the network.

 

Blockchain technology is highly sought for of its lucrative characteristics:

 

  1. Transparency: The information is stored on every node of the network, facilitating transparency and real-time access to the data so that you can easily trace back the transactions.

 

  1. Secure Transactions:The entire network is decentralized, and the blocks are interconnected and encrypted with powerful hash functions. To make a change in a particular block, you have to access all the blocks on the network. If someone tries to tamper with the information, they have to make changes in the entire network on all the nodes, making it a highly safe network.

 

BENEFITS OF BLOCKCHAIN FOR YOUR BUSINESS

 

  1. SMART CONTRACTS

A smart contract is a digital self-executing and self-enforcing protocol based on certain agreed-upon terms and conditions. These contracts work by the principle of simple “if/when…then” code, executing the necessary actions in chronological order when the necessary pre-determined conditions are met.

 

Smart contracts are used in various sectors these days, including the trade-in digital financial assets where the ownership gets transferred legally, in supply chain management and logistics processes, hotel and travel bookings, etc.

 

One of the simple real-time use cases of smart contracts is their use in insurance companies. It has forever been quite difficult for an insurance claim to be processed and settled. The claim gets validate after days and months of hardships and verifications. However, when smart contracts are used, the entire process gets simplified as the automatic triggering of a claim occurs when a pre-determined event occurs. It ensures quicker release of insurance money, and as the records are populated with the necessary information, it is easier to determine the exact compensation.

 

  1. REDUCED BUSINESS COSTS & NO MIDDLEMEN

A smart contract eliminates the need for an attorney or a legal organization to govern the contract, thus eliminating the third-party costs. Also, the transactions are made directly between two parties, and hence there is no need for a banking institution or the extra charges levied by them. The costs that get saved can be channelized into better investments for the business.

 

The use of smart contracts and blockchain can simplify the mortgage process. To execute a mortgage agreement, various details, including the mortgagee’s income, expenses, credit score have to be assessed that get performed by a third party, acting as a middleman between the mortgagee and the lender. It makes the entire process lengthy, tedious and cost-incurring. With blockchain, the lender and mortgagee can directly file the deal and facilitate the transactions reducing significant costs and time.

 

  1. TRACEBACK EVERY TRANSACTION

With blockchain systems, you can trace back every transaction and find the origin of every product. Every product goes through various development stages, packing and marketing phases before it gets sold to the end consumer by the retailer.

 

Assume you’re a leading mobile phone brand, and at some point in time, you receive complaints from consumers of poor quality phones or phones that are damaged. To maintain the reputation of your brand, you must find out where the issue originated and rectify the source to avoid such issues further. Manually, this could be a tedious process to track where the fault occurred, but if a blockchain-based system gets integrated, you can easily track the condition of the mobile phone parts at every step of the delivery. It gives you a clear picture of where the issue began and say, it is the fault of a battery manufacturing company, you can directly deal with them instead of disturbing others in the process.

 

Thus supply chain management is one of the most beneficial applications of blockchain to monitor the quality of products at every stage of production and post-production. It finds a good application in tracing the source of the contaminant responsible for the food-borne illness, too.

 

  1. SAFER TRANSACTIONS 

Every transaction made on the blockchain system gets recorded on all the nodes, ensuring transparency of the transactions. The payments made on blockchain are irreversible and establish direct contact between the business and its consumer.

 

As online shopping has become mainstream these days due to the covid-19 pandemic, online frauds have also increased to a greater extent. One of the recent frauds that came out in the context of e-commerce is the chargeback fraud. The consumer purchases the product but cancels the payment with the credit card company against chargeback complaints that further incur a loss on the merchant for paying the charges while losing their merchandise.

 

Mostly, the bank takes the side of the consumers because the merchant fails to prove the purchase with a lack of evidence. However, if these transactions get recorded on the blockchain, with a quick traceback the purchase can be proven, preventing the chargeback frauds.

 

  1. SECURE BUSINESS ENVIRONMENT

Data breaches, hacking of the systems, tampering with the business records have been quite popular security threats to businesses of all sizes. It is easy to tamper with the records on a single computer or even on ten computers in the office network but can you imagine tampering with records on thousands of blocks on a blockchain? That’s something impossible!

 

To tamper a record on a particular block, a hacker must access every block on the chain encrypted with cryptographic hashing. Thus blockchain systems are highly secure, and hacking is never a threat to these systems.

 

Blockchain systems are robust and highly secure that simplifies and streamlines business processes, making things convenient for both the business and the consumers. Cryptocurrency and blockchain are not a fad but a permanent solution for the present and future of businesses. Blockchain applications are beneficial for businesses of all sizes and in all sectors. If you are looking to leverage blockchain systems and their applications for your business, reach out to GAE Co., the best consulting firm in Dubai. We provide highly reliable IT services, digital transformation of business and blockchain services to businesses all across the world.

Search