Data shared across a business network is more secure, transparent, and traceable with blockchain technology, resulting in cost savings and enhanced efficiency.
The blockchain concept has grown quite popular over the years. By 2020, Citrusbits estimates that the global blockchain market will be worth $20 billion. It is possible to grow your business in a number of ways using blockchain technology, but this post will focus on 10 blockchain benefits. Before we start, let’s take a closer look at blockchain technology.
Blockchain Technology: What is it?
Blockchains are systems that store cryptocurrencies’ transactional information. Peer-to-peer networks store transactions in a decentralized database that is distributed among several computers. This keeps the information secure and makes it less likely to be hacked.
There are various transactions in each block of the Blockchain, along with their details. A transaction record is added to the ledger of every entity involved in a transaction with each new transaction.
There is no single authority managing or running the Blockchain. Due to the fact that multiple entities manage it, it is called Distributed Ledger Technology (DLT). It is distributed across several computer systems.
Blockchain Technology’s Benefits for Businesses
1. It is Trustworthy
One of the key elements contributing to the successful completion of a business transaction is trust. It is often necessary to involve a known third party when dealing with a business for the first time. This third party regulates and verifies the transaction.
However, blockchain benefits users to transact confidently with any business entity. A key feature of Blockchain is that there is no need to establish a formal business relationship to share transactional data. A blockchain transaction facilitates the exchange of information among entities with which you would not normally be in contact. The Blockchain would also enable you to exchange various types of data and transactional information that you would not have been able to do otherwise.
2. Decentralized Platform
Blockchain’s decentralized nature is another interesting feature. Due to the decentralization of blockchain transactions, they are not regulated by the government. An independent status of a process may help build trust among users.
There is no single entity in charge of the Blockchain. Several businesses exchange information and data freely, with no single entity in charge. Throughout the supply chain, data is passed between suppliers, producers, retailers, and distributors.
3. Increased Privacy
It is possible to maintain your anonymity in a blockchain setup. Unlike traditional computers, the blockchain system ensures high levels of privacy for all individuals involved in the transaction. Due to the fact that the transaction process cannot be changed at any point along the way, Blockchain gives stakeholders and companies great confidence and integrity. You can also grant permission to someone who wants to view certain details of your transactions using the blockchain system.
4. The Enhancement of Security
Businesses around the world have been concerned about security for all types of transactions. However, blockchain benefits ensure the security and safety of your transactions. It ensures that hackers and fraudsters cannot access your personal information. In addition, they have an untraceable record of transactions that are encrypted from end to end.
Blockchain technology entails the storage of transactional information across multiple computers. A blockchain-based system is, therefore, far more secure than a traditional system, where all data is available on a single computer.
5. Improved Speed & Efficiency
Blockchain transactions are far superior to those of conventional transaction methods. Businesses increasingly use blockchain-enabled systems since they eliminate third-party intermediaries and save time. There are instances when a blockchain can complete a transaction within a matter of seconds. This is where the concept of transactions per second (TPS) comes into play. The average number of transactions that occur in a network every second.
Let us consider the example of a bitcoin transaction in order to better understand TPS. In general, bitcoin transactions take approximately ten minutes to complete. Another popular cryptocurrency getting hype for its fast transaction speeds is EOS. At present, EOS processes up to 15 transactions per second, with the goal of achieving a million transactions per second in the future.
For a better understanding, here is a comparison of blockchain cryptocurrency transaction speeds with VISA: Bitcoin – 7 transactions per second, and VISA – 24,000 transactions per second.
Currently, the most advanced payment system in the world, Tkeycoin, offers a powerful, blockchain-powered artificial intelligence system that can process as many as 50,000 transactions per second. This is a huge leap over Bitcoins (7), Ethereum (15), Ripples (1,500), and Visa (24,000). The fact is that Tkeycoin has the fastest crypto transaction speed.
6. Improved Transparency
Blockchains are of decentralized nature, making it easy for you to access the details of your transactions with other entities that share a node. Blockchain explorers can provide users with real-time access to their transactions.
As a result of the transparent nature of blockchains, it becomes quite easy to trace and locate an issue. The ability to detect tampering with our data is very convenient. Additionally, each party involved in the transaction has a copy of the data.
7. Providing Traceability
Tracing a product’s origin is a bit difficult in traditional transaction procedures. However, the systems operating on Blockchain allow you to trace transactions easily since the data is stored as nodes. It is possible to determine the origin of an asset with the help of an audit trail.
To ensure the authenticity and security of your transaction, you can also view every step of the process. A blockchain’s traceability feature is a great way to track a product’s origin or where it may have encountered problems. In the opinion of experts, Blockchain can assist in tracking the origins of a variety of items, such as medicines, in verifying they are legitimate and organic items to verify they are genuine.
8. Cost-savings
Often, businesses pay enormous amounts of money to third-party intermediaries for basic processes. As an alternative, a blockchain-enabled system can reduce unnecessary costs. Rather than being bound by the usual rules and regulations imposed by a middleman, you only have to trust your trading partner. Additionally, it saves you money on the cost of documentation and other formalities.
According to an estimation, Blockchain benefits in saving the largest banks between $8 billion and $12 billion per year by reducing bureaucratic red tape, making ledger systems real-time, and reducing third-party fees. Moreover, Blockchain has been used to cover the costs associated with processes such as amending data, aggregating data, and auditing.
9. Immutability
Blockchain data is not only encrypted from end to end, but it is also immutable. Immutability, in the context of blockchain technology, refers to the ability to maintain a record of each step of the transaction process. In order to maintain immutability, every transaction on the Blockchain is properly time-and-date-stamped. In this way, data can be examined, and audit trails can be tracked over time. By using it, you will be able to keep track of all parties involved in the transaction. It can also assist you in identifying faults early in the process so as to correct them as soon as possible.
10. Automated Processes
With smart contracts, blockchain technology enables you to automate your transactions. In general, smart contracts are digital contracts that are stored on a blockchain. As soon as the predetermined conditions are met, the smart contract moves on to the next step of the transaction process.
In addition to increasing the speed and efficiency of the blockchain process, this is a great way to enhance its efficiency further. In addition, it facilitates the elimination of the concept of middlemen taking care of manual contracts between entities. In other words, once you have provided your documentation details in a transaction, you will automatically move on to the next step.
Concluding Thoughts
Over the past few years, blockchain technology has revolutionized the business sector. Businesses often pay enormous amounts of money to third-party intermediaries for basic processes. Nowadays, the conventional methods used by businesses for their daily operations are a bit outdated. There is no doubt that blockchain technology is here to stay, and you can also benefit from it. After discovering the benefits of a blockchain-enabled system, you should integrate it into your own organization.