How Blockchain and Cryptocurrency Can Revolutionize Businesses A brief overview of blockchain and cryptocurrency's various benefits and applications and how they can transform businesses.
By Nischal Shetty •
Opinions expressed by Entrepreneur contributors are their own.
The growth of blockchain and cryptocurrency has been skyrocketing for several years now, and the hype around it is not likely to end very soon. More and more people are investing in cryptocurrency each new day, and the sector has seen innovations like cross-border payments, real-time IoT operating systems, NFT marketplaces, decentralized finance (DeFi), identity management systems and more.
Certainly, cryptocurrencies are expected to become the future of money in the coming years, but the blockchain technology that underpins them is already changing the way businesses operate. Because blockchain provides a secure ledger for all transactions, it can be used to make businesses run more efficiently. From decentralized security to effective data management and improved transparency, blockchain has many benefits and is used for various applications across various sectors.
Walmart and other large corporations are already utilizing blockchain to track their supply chains. British Airways is another notable company that has adopted blockchain technology. They've used blockchain technology to coordinate data flights between London, Geneva and Miami's airports.
They're also putting a new blockchain-powered VChain Verification Service to the test, which may totally revolutionize the check-in process if it succeeds. Ecommerce giant Alibaba also uses a blockchain-based solution to track luxury products sold on its various websites. Today, the power of blockchain is being tested in a variety of fields, including education, healthcare and nearly everything else.
Here are some major benefits of blockchain and cryptocurrency which could potentially revolutionize businesses across the world.
Quick and secure transactions
Both blockchain and cryptocurrencies make transactions rapid, easy and safe, which can help businesses run more efficiently. Credit or debit cards may sometimes take a day or more for transactions to be finalized and reflected in your account, but crypto transactions can be carried out instantly. Furthermore, these transactions will be kept private.
Your transaction will not be recorded by financial intermediaries such as banks. You also do not have to provide your personal details or any other source of identification such as a driver's license and government-issued IDs. As a result, both your identity and your financial data will be safeguarded.
Related: How to Identify and Avoid 'Shitcoins' in the Cryptocurrency
Low transaction fees
Businesses often make hundreds of thousands of transactions each day. While Bitcoin and other crypto payments are just becoming mainstream, credit card payments are already widely accepted but they come with high transaction fees. Adopting cryptocurrency for these transactions means you'll pay significantly lower transaction costs than you would if you used credit cards or other means from banks or other financial institutions.
Increased decentralization
Because blockchain-enabled crypto transactions do not require a third party or a central authority, this paves the way for business transactions to become more decentralized. Hence, nobody will be monitoring your information. Only the sender and receiver will be involved.
Related: 8 Benefits of Blockchain to Industries Beyond Cryptocurrency
Reduced chances of fraud
Unlike traditional card payments, which can be reversed using the chargeback feature, Bitcoin and other cryptocurrency payments cannot be reversed. Because each transaction is securely recorded, there is a long-term audit trail that can be utilized to trace transactions and verify their authenticity. As a result, each transaction has greater audibility and accountability, dramatically reducing the likelihood of fraudulent transactions.
This audibility feature can also be used to track other assets, allowing businesses to keep a database of various types of information about these assets up to date.
Increased traceability of the supply chain
The use of blockchain-based applications makes it easier to track products and goods as they move through different stages of the supply chain. The ability to monitor suppliers in real-time, eliminate human errors in data updating and use smart contracts for payments is expected to transform the global supply chain industry.
With the supply chain becoming more efficient, organizations can shift their focus on cutting down other costs and more efficiently streamlining other processes, including production.
Cross-border payments
Cryptocurrencies facilitate easy cross-border payments and thereby reduces barriers to international trade for various businesses. As a result, businesses can accept payments in cryptocurrencies from customers in any part of the world. Not only does this improve the global prospects of a business, but this will also give a significant competitive advantage.
Improve your core capabilities
Because the adoption of cryptocurrencies by businesses is still a new concept, businesses can enhance their core capabilities and enhance their prospects among rivals by implementing them early on. By offering crypto payments, they can also attract new customers who are interested in the crypto field.
With cryptocurrencies having the potential to overturn even central currencies, and with even governments now planning to offer their own central bank digital currency, this will definitely put businesses way far ahead of the competition.
New sources of capital
Adopting cryptocurrency can give businesses wider access to capital and liquidity pools, thereby drastically increasing their investment options. Initial Coin Offerings (ICOs) are one of the most common ways in which businesses, especially startups, have been raising capital through cryptocurrency.
Similar to the traditional method of Initial Public Offerings (IPOS), through this method, businesses that raise funds through ICOs typically give back to investors through cryptocurrency tokens like Bitcoin and Ethereum.
Potential inflation hedge
Even though cryptocurrencies often come with high volatility, the market is seeing much growth these days, and undoubtedly businesses can use cryptocurrency as protection against inflation during tough market and economic conditions. Bitcoin is one of the most prominent cryptocurrencies that several investors and businesses have invested in to use as a hedge against inflation and the ever-changing market dynamics.
Despite Bitcoin being one of the most volatile cryptocurrencies, most people choose Bitcoin as an inflation hedge primarily due to its limited supply and because of its attractiveness when its real yields move closer to zero.
Improved treasury function and operations
Apart from just facilitating crypto payments, businesses can also move away from the payments area and implement cryptocurrency and blockchain technologies in their operations and treasury functions as well.
Conclusion
Businesses certainly have a lot of potential to improve themselves and maximize profits once they adopt cryptocurrencies and blockchain technologies in a serious manner. By considering stakeholder needs, overall strategy and short-term and long-term objectives, businesses can create the right crypto adoption strategy and then work towards its implementation.
Related: 5 Things to Consider Before Investing in Cryptocurrency
