Currently, blockchain technologies are the hot topic in the business world. It is the next big thing in the financial world as the innovative technology can change the way business is done. Blockchain technology reinvents the way traditional currency and assets are handled in the real world. There are now a host of other real-world applications for the blockchain technology to be applied to.
What is Blockchain?
The concept behind Blockchain may appear complex but it is simple and still extremely powerful. It is a distributed database that records and stores information regarding transactions done with cryptocurrencies such as Bitcoin. The records that are stored in this database cannot be altered as the records are highly encrypted. It is a platform that allows cryptocurrency holders to execute transactions without interference from a third party. In traditional banks, transactions are carried out at the end of the day, followed by charges that could take a great toll on businesses if mishandled during processing. However, the blockchain is a decentralized public ledger that alleviates system inefficiencies including the need to pay additional costs to perform a transaction.
It’s Impact on Businesses
Blockchain has been gaining wide acceptance over the year as a mode of making payment by various businesses. This is because it establishes accountability, trust, efficiency and transparency for any type of digital transaction. There are several other ways that Blockchain is revolutionizing businesses. A few of the top ones are:
Increases Profit Margin
With the end of decentralization of power by the corporate organizations such as credit card companies and banks, businesses can complete transactions without the fear of being charged excess fees. This will, in turn, allow them to save money, which they can reinvest into their businesses for its growth. Furthermore, it will allow consumers better value while avoiding ATM fees and other extra costs with using older payment methods.
Regardless of your location, simply with your mobile phone and data, you can carry out transactions at a quick pace via the blockchain. Today communications between business organizations using machines are slow, expensive and often require extensive human capital. Blockchain provides a universal standard for storing and receiving data, making it easier than ever before to work across systems and organizations.
The record of transactions stored in the public ledger allow for greater transparency and thus trust in the system. Furthermore, the records are permanent and secure which is usually verified by a decentralized peer-to-peer system of network users. This is unlike fiat currency whose records can be altered and cannot be traced other than by centralized institutions. This makes management of finance challenging and arduous. However, blockchain technology solves this problem by making the management of asset easy and secure.
All and all, blockchain technology is a revolutionary innovation that has impacted and changed the global business model across all sectors. Businesses that have adopted this innovative system of payments have been found to perform more efficiently. They have been saved from huge amounts of costs using peer-to-peer technology to perform transactions with various other organizations. The future of blockchain technology continues to brighten as the nascent industry sweeps the world quickly today.