Know The Business Benefits of Blockchain
Blockchain is one of the hottest as well as most discussed topics globally this year. It is a technology that will be transforming everything from the finance industry to global supply chains. However, there are still many people who are not very sure what exactly it means as well as how companies can make use of it in order to improve the efficiency of their processes. This is the reason why I decided to write this blog. In this blog, I will explain what is Blockchain technology as well as what are its business benefits.
So what is Blockchain Technology?
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
– Don & Alex Tapscott, authors Blockchain Revolution (2016)
Blockchain technology is nothing but a collection of database that is used to maintain a continuously growing list of records. It is a giant network known as a distributed ledger, which allows anyone with access to view the data. It is quite similar to Google docs. Blockchain networks can be private with restricted membership similar to an intranet, or public, like the Internet, accessible to any person in the world. To update any block you need consent of all the users involded in that particular block.
This technology records digital transactions in a sequential chain by using cryptographic digital keys, which are verified by the network as authentic. The longer the Blockchain as well as the wider the network the more complex the digital key, & therefore the more secure the Blockchain.
A new trading platform
We all know that any type of trade needs exchanging assets between 2 or more parties. There is always 1 central third party that is brokering the deal and providing trust into the trade as well as seeking their own compensation for their role.
Blockchain alters this trading platform. It brings parties together in a trusted network without a third party as well as records each transaction sequentially and securely.
Business benefits of utilizing this new trading platform
With Blockchain, transactions will be completed directly between the relevant parties with no 3rd party as well as with digitized information and therefore settling the transaction will be quick. In addition to this is the ability to operate ‘smart contracts’ that automatically trigger commercial actions based on satisfying the criteria laid out in the contract. This in turn can streamline processes dramatically & in doing so, remove time as well as cost from transacting.
As each transaction is recorded sequentially as well as indefinitely, it is offering an indelible audit trail for the life of an asset even between parties. This is particularly important if source data is necessary in verifying an assets authenticity.
Tracking goods forwards in a supply chain can be very helpful while seeking to trace the exact location of the components. The component related information can then be relayed to or from the new owner for possible action.
Lack of commercial transparency may sometimes lead to delays in commerce as well as a breakdown in relations. By providing transactions details against the commercial construct, trust can be built within the process and therefore there will be a more stable relationship based on transparency.
Authenticity of information will be assured because each transaction will be verified within the network by using independently verified complex cryptography.
Blockchain technology is gaining worldwide recognition. The above mentioned business benefits are just a few of the benefits that blockchain provides today. People are stating that this technology will completely revolutionise the world. As businesses are becoming more transparent with this technology, investors would be more interested to invest in companies that use such technology.