How blockchain can improve your business operations

20
September 2022

If you own a business, you've probably had a quarter or two where you worked extremely hard, cared for many customers, and still had a few pennies in your bank account. But you know what they say: you must spend money to make money". As a business owner, you'll probably want to see the success of your labor sooner rather than later.

Nowadays, human error, procedural delays, and mediator's fees are companies' leading causes of financial loss. Can you picture how much money you'd have in the bank if you could run your firm more quickly, avoid dumb mistakes, and eliminate those middlemen? You'll be shocked to learn that this is pretty feasible. How? Easy: with blockchain technology. This article will show you everything you need to know about blockchain and how it works to make your business run more efficiently, faster and cost-effective.

What is blockchain?

Blockchain is a digital record of who holds what that is constantly updated, to put it simply. A "block" containing transaction-related data, including the time, date, dollar amount, and participants, is encrypted and connected to other blocks to build a chain.

One of the remarkable things about Bitcoin and other cryptocurrencies is that no single central authority regulates the blockchain. Everyone has access to the same data in a blockchain, ensuring transparency and ongoing reconciliation. Having a dependable third party confirm details regarding you and a transaction you wish to complete will no longer be essential.

Although cryptocurrency is the most popular application, businesses can use blockchain for anything from data management to regulatory compliance. As stated in Harvard Business Review, "with blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision."

An example of blockchain: Financing companies

Let's use a tangible example to show how blockchain works. Financial services are starting to use blockchain to develop services and reduce costs. For example, if a stock exchange uses blockchain to settle transactions, this technology will record shareholdings and manage the clearing and settlement of equity transactions.

Features of Blockchain

Why is the blockchain so powerful? It is a secure method to capture and preserve digital data. Let's look at some primary features of blockchain technology:

  • Decentralization: There is no central authority or watchdog in a decentralized network. You can store anything, including valuable digital assets, contracts, essential papers, and cryptocurrencies. Using your private key and the blockchain, you'll have complete control over them. So, as you can see, a decentralized system restores control and ownership rights to the general populace.

  • Secure: Blockchains use encryption to safeguard data using a sophisticated algorithm that serves as a deterrent against intrusions. Said, the network information masks the underlying nature of the data. Any input data is placed through a mathematical procedure for this process, resulting in a different form of value whose length is permanently fixed.

  • Distributed ledgers: The simultaneous access, validation, and updating of records in an immutable manner across a network divided up across several entities are made possible by distributed ledger technology. A distributed ledger is essential to blockchain technology because it enables the protection of a decentralized database of digital transactions. Distributed networks eliminate the requirement for a third party to verify the authenticity and detect manipulation.

  • Immutable records: Immutability means something that can't be changed or altered. Records kept on a blockchain are unchangeable. A copy of the digital ledger is stored on each node in the system. Every node must verify a transaction's authenticity before adding it. If the majority agrees that it is legitimate, it is recorded in the ledger. This encourages transparency and makes it impervious to corruption.

  • Faster settlement: Traditional banking procedures are very cumbersome. After the system completes all settlements, it might occasionally take days to finalize a transaction. Additionally, it is pretty easily corruptible. In comparison to conventional financial systems, blockchain provides a speedier settlement. This method allows a user to transfer money more quickly, saving time.

A visual representation of Blockchain

Blockchain for businesses 

Business owners will learn to use blockchain to create new financial models and more effective business procedures. Below are a few ways your business can benefit from the blockchain:

Transactions and reimbursements

Perhaps the most well-known use of blockchain technology today is in transactions and reimbursements. Blockchain technology underpins cryptocurrencies like bitcoin and Ethereum. With blockchain support, companies are now developing initial coin offerings (ICOs) for their platforms and currencies.

Securely Share Records

Using blockchain networks with powerful, built-in encryption allows businesses to store and move data more securely, as we said previously. Sometimes, this can be a more affordable data storage option than renting a data center space.

Supply Chain Management

Supply chains are intricate, and managing them takes businesses and their teams countless hours of work, mainly when different components in the chain are located in other states or countries. By removing the lack of transparency and inefficiencies in payment processes, a blockchain's immutable record-holding technology resolves several problems related to supply chain management.

Smart Contracts

A business can use Blockchain technology in smart contracts to reduce the hassles of handling contracts for businesses. An automated, self-fulfilling contract known as a "smart contract" is one in which funds are only delivered after verification that both parties have complied with the conditions of the contract, making it reliable.

Quality assurance

Blockchain also has possibilities for quality control, mainly when something goes wrong within the business. Blockchain provides a definitive, contiguous ledger to quickly identify the issue if anything ever went wrong since companies can link every component of the supply chain.

Get your business ready for decentralization

You might be able to replace a lot of the routine corporate operations with blockchain technology. Why not give it a shot to keep one step ahead? For many established companies in the banking and insurance industries, it is already a dependable option. Even if you're starting, using the blockchain's capabilities will give you an immediate advantage over your rivals.

You can obtain the assistance you need from One Park Financial to become more financially secure and get ready for new changes, like blockchain. How? We strive to make it easier for small- and medium-sized business owners to get the operating cash they require. Our procedure is straightforward, and we've assisted numerous small businesses in obtaining money after banks rejected them.

We can assist you in finding the working capital you require promptly as long as you have been in the company for at least three months and generate at least $7,500 per month in revenue. Just fill out our online form to check if your small business qualifies.

Disclaimer: The content of this post has been prepared for informational purposes only. It is not intended to provide and should not be relied on for tax, legal, or accounting advice. Consult with your tax, legal, and accounting advisor before engaging in any transaction.