Blockchain is considered to be the concept that pre-empted the entrance of cryptocurrency into the mainstream financial market. The technology launched in 2008 and began to gain traction in 2011. Fast-forward nearly a decade later, and it’s become a viable technological option for businesses to use to refine their financial strategy, as well as offer a more transparent and technologically-savvy solution to finance and record management.
Despite these benefits, many business owners are still unsure of using blockchain in their day-to-day operations. This is generally due to the novelty and relative newness of blockchain, or the lack of general knowledge of its benefits in the business community. Below, we’re discussing what blockchain really is and the benefits of using blockchain technology at all levels of your business.
What is blockchain?
Blockchain technology is considered a “peer-to-peer” network within the light or surface side of the internet. Peer-to-peer networking indicates when two computers are able to share files and access seamlessly, generally on the same network. Blockchain, using this framework, is able to designate machines and entities as “senders” and “receivers,” keeping a completely immutable track of all transactions flowing between businesses and consumers. It’s a sophisticated ledger technology that has the potential to overtake manual methods of business management in the very near future.
How can blockchain benefit businesses?
The main benefit that blockchain can bring to small businesses and enterprises lies in the protection of a business’ brand perception. The 2020s have ushered in a new era of transparency, and consumers are interested in buying from brands that are trustworthy and straightforward with financial and transaction management. As blockchain technology is a more secure way of managing your business’ financials, it offers a more strategic approach for businesses to take to differentiate themselves from competitors and appeal to a new, more cautious demographic.
1. Replication across the “network”
Blockchain works to create a single source of truth for your record keeping purposes. As soon as an entry is transcribed in the system, it will be sent to all ledgers across your network as a permanent transaction or event. These ledgers can be viewed by any entity who has been given access and are managed and separated by “channel” designations for security and specificity.
2. More stringent authorization authority
Only the lead administrative user can authorize any entity at any time. Access is far more centralized and approval-based and cannot be slighted — keeping your records adequately protected.
3. Immutable nature of records
Within a blockchain framework, entities cannot void or remove blocks for any reason. It’s similar to nailing a hole in a piece of wood. Even after the nail is removed (i.e. the transaction completion notice), the hole will remain — and so will the permanent record of your block “insertion point.” This is, in essence, the safest and most transparent method of financial management available for business use to date.
The world of alt-currency and technology is changing daily — but a fundamental understanding of legal implications and strategy behind each option is key to set your business up for success.
