Blockchain technology is quickly gaining popularity, not only in the fintech industry, but in the ecosystem as a whole. People had their doubts about the technology in the past but nowadays, it has been seen to benefit businesses in many ways. This gives momentum to digital technology, where it is getting integrated into traditional businesses.
The major discouragement large and medium business owners get when they hear about blockchain technology is cryptocurrency. The currency is extremely volatile to change and is still not investor-friendly. At one instance, the currency can rise tenfold, and the very next moment, it could fall far below what you invested.
Media outlets mostly cover stories that highlight the negative aspects of blockchain technology. There are, however, certain benefits to this that will help businesses.
Major businesses around the world have suggested that blockchain in the future will mostly revolve around bitcoin. The technology will therefore be impacting several departments in a business, especially in the fields of Operations and Finance.
What is blockchain technology?
Blockchain technology involves electronically distributed ledgers, which are digital entries. Distributed ledgers resemble stock ledgers. Most people who participate in ledger maintenance keep one. They do this via the internet as an evolved form of keeping track of money.
Blockchains use several methods to verify transactions made by participants. One of the methods is to use cryptography to process the ledger accounts for accurate results. There is increased trust levels involved along with transparency in using blockchain technology. This is why its quickly gaining popularity.
More and more businesses are moving towards maintaining their ledger accounts digitally. Bitcoin, as we know, is an example of a blockchain technology that is the most popular one right now.
Benefits of blockchain technology
Blockchain technologies have a number of benefits that businesses need to realize. They are quickly becoming an integral part of organizations and have been seen to be applicable in many industries, such as crowdfunding.
The data structure involved in a blockchain is read-only, which means they cannot be changed from when its entered. This safeguards company data during transactions.
Other benefits of the blockchain technology include transactions being recorded in chronological order. This helps when there are any kind of errors related to time of transaction. The time stamps allow for companies to keep track of when the transactions were made.
The technology also has a decentralized structure as data is stored in millions of computers around the world. It is stored in blocks, and all transactions are transparent. Companies can therefore view what happens to their funds over the long run.
One of the biggest advantages of blockchain technology is that any transaction that is made can be traced back to when it was made. This means if any party tries to mislead another party, whatever transactions that are made have a digital footprint. This further adds to the security of the technology, making it a clear preference for businesses around the world.
Five ways blockchain is changing businesses
Business owners are finding this new tech to be quite useful in daily transactions. The fact that the entire information is transparent to the owners of the data whilst still being protected from outsiders is mind-blowing. Here are reasons how blockchain is changing businesses.
Accounting practices are a thing of the past. The current blockchain technology makes accountants feel like they are cavemen trying to make a stone wheel.
There are several challenges that arise from managing business operations in several places, especially when the business spans over the entire world. The top hierarchy and the board of directors require precision in the accounting practices.
This is where blockchain tech can help out with almost all of the things mentioned. The transparency aspect of the blockchain system allows for the accounts to be completely transparent in front of selected users.
Auditors therefore do not have to manually check each and every account. This is already done for them. Instead, they can focus more on investigating any kind of anomalies.
Marketing and advertising:
Bitcoin and other cryptocurrencies are rumored to save advertising companies a total of $19 billion worldwide. That is almost $55 million a day for 365 days. How? Well, advertising agencies and companies are mostly vulnerable to click frauds that occur. These frauds eat up necessary resources the company invests, hoping more people would end up purchasing their product. That never happens and companies lose millions from their marketing budget online.
Blockchain technology can assist by monitoring the system to keep a check on the budget and where it goes. This allows advertisers to keep track of all the money that they have put into the media, from the production point to the publication point. There is always a chance of overcharging in the older system but the newer systems negate that effect.
The Human Resources (HR) department is integral in recruiting the next generation that will lead the company to greater heights. Their job is not only to recruit the best, but also to train and coordinate the employees into working spaces that increase the overall output. The HR department handles employee relations and provides compensations, bonuses and training that benefits the employees experience. Imagine the use of technology in all of these areas.
The immense importance of keeping track of the transactions, as well as the progress of each individual, cannot be more highlighted. Blockchain is said to reduce the chances of the previous companies of employees in providing wrongful data about the people that are hired. Historical data is stored inside the massive servers of the blockchain technology and cannot be altered. This, therefore, gives an overview of what the employee has been like in previous firms before joining this one.
Lastly, blockchain technology can also play a huge role in payroll systems. Businesses are advised to maximize on how the technology does the backend work so payments get standardized. This makes it easier to pay each employee.
Cybersecurity and online practices:
Statistics say that the amount of data that was produced in the year 2018 was more than the amount of data ever produced in human history. Thats a lot of data! Companies of all sizes today are looking for ways to protect such massive data sources from predators and hackers.
The data stored is very sensitive. Ranging from transaction details of employees to the data of the companys customers, all has to be protected from being damaged and unauthorized access. The worth of the cyber security market is well over $122 billion globally. Blockchain technology has the potential to protect such markets from hackers and other cyber threats. Because blockchain is transparent, highly resistant to leakages and auditable, not to mention efficient, the chances of a companys data leaking are close to none.
Operations and management:
Blockchain technology is one day going to play a key role in shaping the way businesses function. Another reason for how the technology is changing businesses is by creating operational efficiencies and newer opportunities for companies in developing markets. These markets are not yet fully capable of comprehending the companys products and therefore require a certain advantage or market edge. Operational efficiency through the use of this technology provides that.
Companies seek to secure their credit and cryptocurrency allows for the companies to do that. The financial transactions in nations with high inflation indexes along with high currency devaluations have a higher risk of credit going down. Blockchain technology can help reverse this effect and protect vulnerable companies from incurring heavy losses leading to bankruptcy.
The internet in the future is going to be the main source through which transactions are going to take place worldwide. More and more people are getting access to it; therefore, it has become the biggest market worldwide.
Blockchain technology can truly revolutionize the way companies maintain their ledgers. Having read all the reasons above, it is quite clear that the use of blockchain technology immensely benefits companies. Further advances in tech will lead to rise in its demand; hence, the value of bitcoin and other cryptocurrencies will rise through the roof. In a world like that, leaders who make smart decisions will greatly reap the profits in the years to come. The opportunities and applications of the technology are endless. It doesnt take a genius to realize that.
The whole idea of businesses getting integrated with technology is occurring right now. The idea of money being transferred digitally from place to place is new and will need some time to get incorporated in daily routines. So before everything ends up with the ones who understood the opportunity first, you better get on the bandwagon and take advantage of blockchain.