As small businesses find ways to serve their clients with excellent services and products, blockchain technology can be a great way to improve their transactions with customers. Advanced technology is not only made for bigger corporations. Small businesses can benefit from it too.
Blockchain technology is starting to emerge in the background as more than associated with Bitcoin or any cryptocurrency transactions. Businesses from different industries are beginning to adapt to the technology. With the benefits it provides, companies with blockchain technology find transactions with their customers better than before.
It is not as expensive as small business owners might think. Blockchain-based technology is starting to become more affordable. Also, it can be used even in businesses that are not found online.
If you are a small business owner and thinking of blockchain technology, here is an article for you. Get to know how you will benefit from this advanced technology.
What is Blockchain Technology?
Before figuring out what small business owners can get from investing in blockchain, let’s get to know what is blockchain technology and its uses.
Blockchain works as a ledger that is shared between every user. It manages all transactions and the recording of them. Anything can be tracked and traded using blockchain. More importantly, the data stored in its system is hard to modify. Hence, making it an excellent option for businesses who want to accept payment and need security for their data.
It delivers and receives information immediately without having a middleman intervene or view the data. It’s an end-to-end transaction, giving businesses and customers the confidence that their data is safe.
How Does Blockchain Work?
Let’s get to understand how blockchain works and why more and more businesses are investing in it.
Blockchain data works through a time-stamped series. It’s managed by a group of computers by every user. There is no single entity or corporation that owns it. The data (known as blocks) are bound together with a “chain.”
There are three technologies involve for blockchain to work.
Once you have an account, you’ll receive private and public cryptogenic keys. These keys are crucial when sending cryptocurrencies or files without the need for a third party to verify the transaction. The private key should be kept by the user, while the public key is shared to receive transactions. These keys create a digital signature for authorizing and managing transactions.
The digital signature is used to conduct transactions and more within the peer-to-peer network.
1. Transaction requested
2. Transaction broadcasted to a P2P network
3. The nodes validate the transaction with the help of an algorithm
4. After the transaction happens, a block is added to the chain. It becomes permanent and cannot be altered.
Now that we understand how blockchain works, it’s time to get to see the advantages that small businesses can get from adopting blockchain technology.
Advantages of Blockchain Technology for Small Businesses
Improved the Security and Privacy
Security is one of the most valuable parts of a business. Every business owner should practice how to secure their data and payment transaction. Aside from keeping it safe, they should also use an antivirus to protect the system, update the system with AVG updater, use VPN, and follow a cybersecurity checklist to be sure.
With the help of blockchain, it improves the security and privacy of each business. Since blockchain cannot be altered and has end-to-end encryption, an unauthorized individual will find it difficult to access the data secured in the blocks.
Blockchain keeps privacy safe by anonymizing the data and limiting access to it.
It Can Be Used For Payment
As most of us go online to shop, online stores and payments are popular. However, what concerns most are the security of online payment and the cost of it.
But now, blockchain technology can be an advantage to businesses. Business owners can transfer payment to remote employees with no delay since there is no third party involved. Also, it reduces the need for additional cost since it is an end-to-end transaction.
Customers can pay online with no worries as they’ll have a secure payment transaction and no third party that can see their information. Furthermore, customers don’t have to think about additional costs when asking for a refund.
Creating Smart Contracts
Businesses work with contracts on a regular basis. No matter what form of contract, a well-written document should be laid out for both parties.
A blockchain contract is similar to a traditional paper contract. The only difference is that it’s a digital copy, and the content cannot tamper at all.
When two parties decide to work on a project, they need a contract that includes all the terms and conditions. Once done and uploaded in the blockchain, the contract cannot be seen or accessed by unauthorized individuals.
Furthermore, creating smart contracts becomes easy for small businesses and their supplier to negotiate the terms. There is no need for a middleman. Hence, it eliminates the need to pay extra.
Supply Chain Interaction
Small businesses deal with supply chains, logistics, and shippings. Sometimes there are delays and loss of shipment. It involves plenty of paperwork for organizations to take care of. But with blockchain, business owners can fast track the process. It increases transparency, visibility, reduces fraud, improves inventory, and there would be fewer delays in the process.
Furthermore, small businesses will reduce their expense and get a more secure transaction with their supply chain.
Raising Capital
Business owners can find an alternative way to raise capital, and this is via a method known as Initial Token Offerings (ITOs). It works like a traditional bank or crowdfunding site, but tokens are used when trading. Tokens are used as equity or revenue share.
Investors will buy token offerings from companies that offer. The token can represent a project, product, or stake of the company. These tokens are then traded and sold in the marketplace. Since blockchain is highly secured, customers and investors trust a business that uses blockchain as part of its operation.
The increased number of token investors made ITOs popular and a better way for businesses to add to their capital.
Conclusion
Small businesses should not be afraid to invest in blockchain technology. It should be seen as a new way to build trust, security, and transparency. Blockchain technology has come a long way. It’s known for being of excellent value for cryptocurrency to what most industries are now utilizing for their business.
Also, there are more customers who are aware of blockchain technology and its safety. Therefore, small businesses shouldn’t hesitate to include blockchain technology in their operation. It enhances the overall security, speed, and trust.
Author Bio:
Vanessa Venugopal is a passionate content writer. With four years of experience, she mastered the art of writing in various styles and topics. She is currently writing for Softvire Australia and Softvire New Zealand.
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