Since the launch of the first cryptocurrency in 2009, blockchain moved from theoretical to real-world use demonstrating its ability to address many business issues. Organizations have been testing how to make blockchain technology work for them and improve their processes for many years. Big name companies, non-profit entities, and government agencies have used blockchain to enable new business models and improve existing processes.
The value of blockchain is mainly associated with its ability to share data quickly and securely without the need for intermediaries. Let’s look at some of the perks of blockchain, the underlying technology behind cryptocurrency.
Blockchain provides a lot of value when there is no central entity that facilitates trust. It enables data sharing between entities where no single intermediary is in charge. For instance, in the supply chain where multiple businesses, including suppliers, distributors, retailers, and transportation companies, are involved, blockchain can facilitate information sharing eliminating the need for intermediaries.
Where trust is non-proven or non-existent, blockchain brings value by creating trust. Consequently, the organizations or parties involved can engage in business dealings involving data sharing or transactions that may have required an intermediary to happen.
Without an intermediary, data sharing would not have happened; therefore, blockchain eliminates that dilemma. For instance, it removes the need for third parties like banks in financial transactions. Cryptocurrencies are an example of how blockchain enables trust between participants.
More security and privacy
Security and privacy are some of the benefits behind the success of blockchain technology in many industries. The unique thing about blockchain in data sharing is that it creates an unalterable record of data or transactions with end-to-end encryption, eliminating the risks of unauthorized activity and fraud.
Moreover, data in the blockchain is stored in a network of computers, making it impossible to hack, unlike traditional computer systems that hold all the data on servers. Blockchain addresses privacy concerns better by anonymizing data and requiring permissions to limit access.
Since blockchain eliminates manual processes and intermediaries, data sharing and transaction is fast. In some instances, blockchain can handle transactions in seconds or less which is why it has the potential to transform international financial transactions and make them faster. However, the time varies depending on how quickly a blockchain-based system can process data since it depends on the network traffic. But overall, blockchain technology beats other conventional processes regarding speed.
When transactions are recorded on blockchain technology, they cannot be deleted or changed hence a permanent record. Therefore blockchain comes in handy for tracking information over time, enabling a secure and reliable data audit. Unlike error-prone paper-based systems and computed systems that can be corrupted, blockchain enables immutability.
Another advantage of blockchain is that it reduces costs for organizations by eliminating manual tasks like aggregating data, reporting, and auditing processes creating much-needed efficiency. It also removes go-betweens in processing transactions eliminating unnecessary expenses.
The botton line
The unique characteristics of blockchain have the potential to address many business issues.