How Small Businesses Can Benefit from Blockchain Technology

by Chris Cantrell Gadgets & Tech Expert

For small companies, competition with larger and more established businesses is quite intense. If the company is just starting out, it may be difficult to go up against established giants and find clients that will help the business grow. It takes a clever and cost-efficient strategy to generate profit and success. There must always be room for innovation and ingenuity within the company.

How can small businesses stand out from the rest? One simple answer is incorporating virtual currencies or use blockchain technology into their systems.

Most major companies and financial institutions all over the world have already jumped into the blockchain bandwagon. Nearly 84% of large companies have begun dabbling into and exploring the innovative benefits of this technology. While blockchain technology is usually associated with cryptocurrency, there are many other applications for it.

Outside of digital currencies, blockchain technology can also be used for data sharing, payroll management, drafting contractual agreements, biometric authentication, digital voting, real estate and land transfers, retail loyalty awards programs, royalty and copyright protection for musicians, medical recordkeeping, equity trading, and many others. This powerful technology has so much more to offer.

Blockchain technology works by recording large sets of data that are linked together into one massive online ledger. If you change a piece of information in one block, it will not be overridden; instead, a new block will be formed, where the change in data will be updated and documented.

Each change in block has a timestamp that prevents tampering and fraud. Unlike traditional financial ledgers, blockchain technology is decentralized and distributed across thousands of computers. Additionally, since blockchain uses cryptography, the risk of hacking is low.

Why should you use blockchain technology for your business? How can you bring the best out of this technology? Below, we explain the business advantages of cryptocurrency and how integrating it to your small company can contribute to its growth and expansion.

1. Ensures secure and direct transfer of funds to clients and employees

Intermediaries such as banks often slow down the process of transferring funds. Since there are no intermediaries in blockchain, direct transfer of funds between business and clients through cryptocurrency is secure and can be accomplished quickly and with minimum fees. This means that the use of billing statements and invoices will be eliminated, and payment can be done instantly.

2. Provides extensive cloud storage for more hard drive space

Since blockchain technology runs on a massive, decentralized network, it can double as cloud storage with more hard drive space. Several cloud storage apps are based on blockchain, including Sia and Stori. These apps are encrypted and can only be accessed if you have a special key.

Compared to a traditional cloud, blockchain-based cloud storage can store data 300 times over. This could help reduce costs for small companies with little to no budget for cloud storage.

3. Reduces contractual problems and frauds through smart contracts

With blockchain technology, companies can make use of a strategy known as smart contracts. These smart contracts allow credible peer-to-peer transactions without the need for third parties or intermediaries. Basically, smart contracts operate autonomously and are automated to accomplish tasks to ensure that the commitments are met. Smart contracts can help save money for legal fees and more.

4. Promotes trust and transparency in online transactions

The use of blockchain technology can improve and promote trust and transparency between the business and its customers. Thanks to the exchange of data, customers are provided with more choice and small businesses can reduce costs. This can also help challenge the dominance of large firms that have been more established.

5. Provides efficient supply chain management and shipment tracking

The transaction between a business and a client is usually linear. The business owner knows who is on the other end of the bargain, but they may not know who the client’s suppliers are. This is where blockchain technology comes in.

This technology can provide transparency in a way that the business owner can see every company that has contributed to the growth of a business, as well as in the manufacturing of the products it sells. Blockchain can help ensure that you can track the supply chain management effectively and without any delays.

Blockchain technology has revolutionized the ways in which small to medium businesses can grow and improve. It has become a game-changer in just a decade. By integrating cryptocurrency into your systems, it can help streamline business dealings and conserve the company’s energy and resources.

While smaller businesses should proceed with caution, there is definitely no harm in experimenting and exploring how blockchain technology can bring more profit. However, due to its novelty, there are still much to learn about blockchain, and you should certainly do your due diligence first to avoid any issues or problems as you work with it.