How SMEs can benefit from the Blockchain?
Dec 23, 2017 Posted / 2150 Views
If we talk about the potential benefits of Blockchain for businesses, the impact can vary drastically for every industry, mainly because of the size of the business. The blockchain has the ability to super transform the transactions process through enhanced connectivity, effectiveness and security measures. The report of the Research group Frost & Sullivan stated almost 10-15% of all transactions in the commercial vehicle industry would be processed on blockchain by 2025.
You can actually term it as a momentous swing in the protocol of conducting business. There are some topmost companies like Microsoft and IBM, which are preparing to revise their business models as per the needs of blockchain technology. They realize that it will completely maneuver their ecosystems. However, the biggest question mark has appeared amongst the entrepreneurial community speculating if blockchain is something that can be applied within their small and mid-sized organizations.
“Blockchain” can sometimes term by many as Abstract. The entire technology is conceptualized on maintaining a public consensus. The users form a network, which is known as “chain” and the transaction record within the chain, is termed as a “block”. Each block is allocated to a particular user. The chain of the blocks thus formed is a program intended to carry out tasks precisely as specified at the beginning. The characteristic, which makes it distinct from other technologies, is that the there is no moderator or middleman to administer the process. Instead, every user on the chain verifies and monitors the network. Further, the blockchain records transactions and replicates them immediately across the network.
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If you look at the theory, it seems a very simple idea, which works as the underlying concept for speedy and reliable transactions, just like the financial models used by the early civilizations. In those eras faith and assurance were easily reached. However, with the evolution in technology, trust was battered instead of monetary assets. Blockchain brings back the similar experience of peer-to-peer transactions.
Now, after understanding the technology, let us review how small and medium enterprises can benefit from this relatively simple technology model, which is evaluated as the business disrupter.
Think about a contemporary art painter, who just completed his latest painting and moves to a local art gallery to sell his work. The value of the work is limited to the value estimated and there is no validation of the painting, which is submitted. However, if the same work is put on the blockchain network consisting of the group of dealers around the world who concurrently verifies and records the transaction the very moment it go into the gallery’s inventory.
Then again, when the painting is transferred among the collectors, the transactions are instantaneously recorded in the blockchain and duplicated across the network of dealers (nodes).
Ease in Payment: Convenience in transferring funds from one place to another without bank delays and avoiding additional third party costs is perhaps the most apparent advantage that Blockchain can provide to the SMEs who need fast payment processing.
Discovering Frauds: Blockchain can radically reduce the forgeries. Blockchain can immediately find about data manipulation as the record is distributed on the network. Blockchain technology inherent attribute is that it authenticates and track permanent entries and digital signatures.
Record Keeping: Blockchain’s scrupulous record keeping provides immediate lucidity into intricate supply-chains permitting retailers, manufactures and transportation sectors to work immaculately in harmony.
Smart Contracts: Blockchain technology assists those applications, which accomplish the precise agreement requirements, programmed by its author. These agreements to fulfill the needs are called smart contracts. Smart contracts cannot be misused or manipulated in any way, which makes them a critical tool in digital business.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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