Blockchain technology is becoming popular across the world. Businesses are speculative on how to incorporate it into their projects and what benefits it may provide. Some are looking for custom solutions and are considering Blockchain App Development Services. Others engage with blockchain by accepting various cryptocurrencies as payment.
Blockchain – Overview
Blockchain technology is now widely used in various fields. But what exactly is it, and why is it so popular these days? Blockchain is a distributed ledger technology (DLT) that keeps track of the history of any digital asset and aids in the management of digital transactions. Its security features aid in reducing fraudulent activities. Additionally, it also provides all users with transparency.
A blockchain is an excellent choice for all businesses that involve multi-party workflows. This technology offers numerous benefits that are attracting business leaders all over the world:
- It has a high level of transparency.
- It provides users with 24-hour access to their funds.
- It lowers clutter, costs, and hacking risks.
- It boosts efficiency and speed.
Blockchains Implementation Methods
The Bitcoin block effectively stores data related to financial transactions. There are currently over 10,000 other cryptocurrency systems running on the blockchain. However, experts consider blockchain a reliable method to store data about all types of transactions.
Companies like Walmart, Pfizer, Siemens, AIG, Unilever have adopted blockchain technology. The Food Trust blockchain developed by IBM is designed to track the travel path of their food products until it reaches their destinations.
The blockchain helps brands track a product's path from its source to the delivery phase. Food contamination is well traced back through every stop to its origin. Additionally, these businesses can now track multiple things that come into contact. Certainly, this enables brands to identify issues much faster and possibly save lives. The above described is a single instance, but there are multiple ways to implement blockchain.
Tracking the product’s Source
The standard function of blockchain technology is to operate as a distributed digital ledger. Some companies have embraced this technology to demonstrate how products are sourced, with each ledger serving as a sort of permanent record. Customers can remain confident as the product is genuine and blockchain technology tracks the goods.
Accepting Bitcoin And Other Cryptocurrencies As Payment
Accepting Bitcoin and other cryptocurrency payments are likely to be the most important and applicable way for most small businesses to interact with blockchain-based technologies. AT&T, Overstock, Microsoft, and Tesla are renowned organizations that have started to accept Bitcoin and other similar digital currencies. As a result, small businesses may want to fall into line.
Several well-known companies allow businesses to acknowledge cryptocurrency assets. These are some examples:
- BitPay: BitPay is one of the quickest payment processors for crypto-assets, charging only a 1% processing fee.
- CoinPayments: As one of the oldest cryptocurrency processing companies, CoinPayments has amassed a lot of customers worldwide and charges a processing fee of only 0.5 percent.
- Coinbase Commerce: Coinbase is renowned as a cryptocurrency exchange, as it also provides a robust business product.
- PayPal: PayPal recently announced that millions of their merchants will accept Bitcoin.
In early 2021, the world of NFTs exploded when a digital artist auctioned an NFT of his artwork for over $69 million. However, NFTs can be more than just digital artwork, and businesses may wish to sell their own NFTs.
NFTs are unique codes that do not have a conventional value attached to them. They are protected by blockchain technology in the same way that Bitcoin and Ether are, but each NFT asset is unique and cannot be replicated. NFTs, like a one-of-a-kind painting, are worth whatever someone believes they are worth.
Users want to know that their transactions are secure and using Bitcoin and other digital currencies ensures that they are. As a result, clients select Crypto Wallets that accept debit cards and opt for the service provider that accepts payment in BTC and other digital coins. For instance, Tesla and Microsoft have already begun to accept such payments. Small businesses follow them and implement revenue-increasing solutions. The majority of them make use of BitPay, CoinPayments, and PayPal. These are the tenable choices for those who wish to start accepting cryptocurrencies.
NFTs are also an excellent way for businesses to begin conversing with blockchain technologies. They are free to create every type of media or artifact and sell it as an NFT. It is one method of interacting with blockchain technology and earning money from it.
Relevant Article: Unveil The Importance of the Flow Blockchain-Based NFT Marketplace
How Businesses Benefit From Blockchain?
Blockchain's unique functionalities resolve various complex business challenges. Some of the advantages of blockchain are mentioned in the following lines.
Bitcoin's blockchain is decentralized in nature, so it makes the transaction as transparent as possible. By having a node or by making use of the blockchain explorer, viewing the transactions taking place in real-time is possible. Every node maintains its chain copy which keeps on updating upon the confirmation of the new blocks. Ultimately, that means it is possible to follow Bitcoin in multiple ways.
In the past, there were some instances where financial transactions were hacked, and people on the Bitcoin platform lost everything. The hackers are anonymous, but the Bitcoins are easily traceable. Hence, when the stolen Bitcoin is spent somewhere or moved, it can be tracked.
The Bitcoin blockchain stores records that are encrypted. Hence, only the record's owner has permission to decrypt it and reveal their identity by using the public-private key pair. Hence people using blockchain can remain anonymous while maintaining transparency.
When compared to other storage systems, blockchain technology implements advanced security. Every transaction that is recorded must be agreed upon using the consensus method. Moreover, utilizing a hashing method, each transaction is encrypted and has a link to the previous transaction. All nodes have a copy of every transaction carried out on the network. That adds a layer of security. Consequently, if a malicious actor tries to modify the transaction, they will not be able to do so as other nodes will reject their request to write transactions to the network.
The nature of blockchain can also help organizations save money. It improves transaction processing efficiency. The efficiency results in cutting down tasks like data aggregation, editing, auditing and reporting processes. Experts suggest that financial institutions can potentially save costs by implementing blockchain.
Blockchain can handle transactions much faster than traditional methods because it eliminates intermediaries and replaces remaining manual operations in transactions. In a few cases, blockchain can process a transaction in a matter of seconds or less.
Drawbacks Of Blockchain For Businesses
There are two sides to every coin. Blockchain has progressed from its infancy, but it still has some flaws, and it must be addressed before it can be extensively used for daily transactions.
Blockchain could only manage seven transactions per second, compared to 10,000 for Hyperledger and 24,000 for Visa. With scalability in mind, the practical use of blockchain becomes a little difficult to imagine. A transaction must be verified and approved by each participant node, taking several hours for a single Bitcoin exchange.
Immutability of data is still one of the blockchain's significant drawbacks, and it benefits a variety of systems, including financial systems, supply chains, etc. However, if you think about how networks work, you'll see that this immutability can only exist if network nodes are distributed evenly.
Overall, blockchain is a game-changing technology that has already been incorporated in various industries. Businesses started to incorporate it into their operations and are looking for new ways to benefit from it. Without a doubt, this technology has many advantages, that is why it has become so popular. The main benefits are cost savings, increased security, and a high level of transparency.
Indeed, this technology has some drawbacks, and businesses must consider the risks before implementing it in their operations. The good news is that technology is rapidly evolving, giving business owners more choices for increasing revenue.