The transformative nature of blockchain technology gives it the potential to significantly influence global trade for generations and add $1.76 trillion to the economy by 2030. A large part of this growth among small businesses are those looking to create a competitive advantage.
Blockchain offers a secure, transparent, and tamper-proof record of transactions. These transactions are verified and recorded on a public ledger, eliminating the need for intermediaries.
Blockchain is particularly suited for small businesses that want to increase transparency and efficiency while making organizational processes much more user-friendly.
Small businesses are turning to blockchain technology in an effort to streamline their operations. By using Blockchain, companies can reduce the time it takes to complete transactions, cut down on costs associated with third-party vendors, and increase trust among customers and employees.
But, while large corporations like Walmart already implement Blockchain into their day-to-day applications, can small to medium-sized companies reap similar benefits from the growth of Blockchain?
Small business owners should understand the benefits they could realize by incorporating blockchain solutions into their business strategies. Here are some Blockchain benefits small businesses should consider:
Despite the massive role small businesses play in economic growth, some of their most significant challenges are payment processing and sourcing finance. Blockchain technology can solve these issues by providing an alternate pathway to payment transactions that reduce the time and cost of each individual exchange. Blockchain allows businesses to transfer and receive payments directly, eliminating the need for third-party intermediaries like banks and credit card processors.
Using intermediaries usually delays the payment process for at least a week. These intermediaries charge hefty fees for the transactions. If a customer wants a refund, the chargeback fee charged by intermediaries also adds to the transaction costs.
But, with blockchain technology, customers can directly reach out to the business to request a refund, avoiding bank fees and enhancing business-to-consumer relationships.
In addition to saving time and money, blockchain technology can also provide small and midsize companies with secure transactions to consumers that creates a source of transparency that many consumers have never experienced.
Did you know? Cybercrime is a serious issue with global damages totaling around $6 trillion in 2021.
Blockchain offers a secure network that limits the damages of cybercrime because these transactions cannot be tampered with by anyone. Because blockchain is decentralized and fully autonomous, communication remains secure, automated, and immutable whereas the centralized nature of other methods are vulnerable to manipulation.
Blockchain solutions are verified mathematically and cryptographically secured, meaning no complete transaction can be altered. Other nodes in the blockchain network easily recognize potential hackers attempting to manipulate transactions.
In the end, all transactions are protected from fraudulent behavior and each step is transparent to businesses and their customers.
Communication is a significant part of stakeholder management because of the complexity of the communication channels within a project. As the number of stakeholders within a company grows, the number of potential communication lines increases exponentially. As such, be it a legal matter, an international project, or a partnership with other small businesses, effectively communicating and sharing the necessary data with the right stakeholders at the right time is extremely complex, yet crucial.
Blockchain technology solutions make stakeholder communications efficient using smart contracts. Think of smart contracts as one source of truth for every stakeholder in a project or business. They simplify the process of identifying the information shared among the stakeholders. At the same time, they ensure that the course of any project is visible and readily available for any stakeholder qualified to access the data and project information. As a result, misunderstandings or miscommunications between stakeholders are almost completely diminished.
Smart contracts in blockchain technology is one of the most beneficial features because of how important communication is in business. As a small business, communication between team members is the most important key to success, and smart contract tracing technology takes communication to a whole new level.
Blockchain is transformative, but it is still an innovation. Early blockchain implementations for businesses have identified specific concerns that a small or mid-sized company should expect.
The overall blockchain industry is concerned about the need for a pool of qualified developers to develop and maintain complex peer-to-peer solution networks. This means qualified specialists are either hard to find or costly for small and midsize businesses since Blockchain is still a relatively new concept. However, as the industry continues to grow, there will surely be an increase in software professionals ready to enter the world of Blockchain for small business.
Blockchain solutions are enabled by distributed ledgers (DTLs) so understanding blockchain technology has a foundation in understanding DTL. Although it can get extremely complicated, implementing blockchain solutions requires everyone within the process ecosystem, including customers, to use the system.
This, in turn, creates a demand for business owners, employees, and customers to understand, at the very least, the basic functioning of Blockchain and DTL technology. Since Blockchain is still an evolving innovation, this will take time and resources.
The world of blockchain technology is revolutionary. In fact, the IDC estimates that global spending on blockchain solutions will reach a total of $9.2 billion by the end of next year. As you grow your small or midsize business, it becomes necessary to consider implementing blockchain systems. After all, you want solutions that provide a competitive edge for your business now and in the future. However, implementing blockchain technology should remain a relative business decision based on its many challenges and rewards.
While Blockchain promises to reduce transaction costs and improve stakeholder communication, transparency, and security, it also requires very skilled workers and a deeper understanding of distributed ledgers which can go deep into your bottom line. Therefore, companies may choose Blockchain, but they should choose it wisely.
Blockchain integrates with some ERP systems and enhances operations by improving optimization, business processes, and internal data control. End-to-end tracking of goods in the supply chain is more accurate and transparent once Blockchain integrates with ERP systems.
Yes. Blockchain has the advantage of increasing the security and transparency of business transactions. It also eliminates the need for intermediaries in payment transactions, reducing payment delays and transaction fees. Stakeholders additionally communicate better where blockchain solutions are present.
The decision to implement blockchain solutions for any business should depend solely on the company’s needs. There are still vulnerabilities within blockchain infrastructure that should be patched with a highly-skilled blockchain developer who is bound to be hard to find and expensive to employ. However, adopting the technology is encouraged to give your small or mid-sized business a competitive edge in the market.