Is Blockchain Technology Made For Every Business?
Since the beginning of 2017, cryptocurrencies and blockchain technologies have continued to disrupt the financial world with their potential. From entrepreneurs to seasoned business heads, all are looking for ways to get on this trending technology’s bandwagon. Amongst the appreciative talks of all the potential benefits of this trending technology, the markets are also abuzz with the repeated waves of crypto scams. This led to the birth of many stringent regulatory measures from the authorities and at times even the governments went on abridging the development of the technology in their state. Consequently, there are certain queries popping up regarding the potential benefits of the blockchain, are they really good for all? Is blockchain feasible for all businesses or not? And, is it necessary to do the blockchain compatibility test, before incorporating it into the current business model? This article will focus on all these and more such queries related to the dos and don’ts of the blockchain trend in order to clarify the concepts related to the technology and have a better understanding regarding the same.
What Is Blockchain?
To understand the blockchain feasibility of your business, the first step is to actually understand what ist actually means and how its overall system functions. Simply put, blockchain is a decentralized ledger recording, checking and verifying each withdrawal, payment and trade processes within its bounds. Hosted around a network of nodes, it keeps track of all the transactions in blocks arranged in chronological order. Each block in this order carries a time stamp and reference to the previous ones thus, forming a chain- hence the name blockchain.
How Can It Help The Businesses?
For businesses, the spectrum of opportunities spans a great breadth- from the use of blockchain’s ability to achieve remote and autonomous consensus between users. The technology can help improve the transactional productivity and security, reduce the overall cost heads and even reduce the potential lag or downtime if faced any in the supply chain. Apart from securing the payment transactions from third-party interferences, blockchain technology also brings about a new level of transparency in the business ecosystems-something that is in high demand from the consumers nowadays. Data tracking regarding shipments, payments and other information is done instantly with a few smart clicks, thereby giving businesses a better mode of investigation and ultimately cutting down the administration time and costs.
Contractual transactions which are otherwise time-consuming and extremely costly for the businesses due to the involvement of mediators are made a quick breeze with blockchain technology. The technology has provided access to the smart contracts, agreements which can be automatically signed, validated and enforced. With several features consolidated in one single technology, businesses are facilitated with the opportunity of integrating services without disclosing an excessive amount of crucial data to third parties.
Are There Any Downsides?
Quick transactions, increased transparency & security in business processes and availability of much more efficient supply chains are coming up as all good reasons for businesses to take a plunge in the blockchain world. But there are a few reasons apart from the instances of periodic volatility that the business owners and managers need to be extremely careful about before actually adopting the blockchain technology system in its operations. As far as legally considered cryptocurrencies and blockchain exist, there are still considered grey operational areas which not many legislative and regulatory bodies are really fond of in and outside the country. While the technology is there to benefit the businesses with speedily transaction procedures, but the same won’t be achieved with the issues of data limits and corrupt verification techniques prevailing in the system. Apart from this, the blockchain system seems to offer tremendous savings in transaction costs but the initial cost of switching to the technology could be deterrent and needs to be adequately planned and executed under the technological and financial expert’s close supervision.
No matter how extensively blockchain is providing solutions to the businesses, there is still a huge pocket of cybersecurity concerns that need to be addressed otherwise the damage caused by the technical glitches inflicted by hackers and spammers can be much severe than the previous ones. The inclusion of blockchain technology in operation leads to a complete switch from a centralized hierarchy to a decentralized system. So, it is advised to the companies planning for a switch to strategize well with close consideration of all positive and negative aspects of the technology before opting for a transition.