Why Blockchain Matters To Small Business
If you’ve been paying attention to the news in finance or technology lately, you’ve probably heard the word “blockchain” being tossed around quite a bit. However, you may not have a full understanding of what blockchain is or what it does—and furthermore, are you aware that blockchain technology may have long standing ramifications for small businesses of many kinds? If not, you’ll want to pay attention to the following article. We’re going to explore blockchain’s potential in detail so that you can see exactly how it might change your business practices.
Defining Blockchain: What the Heck Is it, Anyway?
Blockchain technology essentially functions as an anonymous and decentralized digital ledger that records the details of various transactions. Are you confused? Not to worry—it’s actually way more simple than it sounds. Basically, you can think of blockchain like a digital list. Whenever a new transaction takes place, the list is updated. In that sense, blockchain might not sound so different than any other form of recording data on a computer… but wait. Blockchain is unique in that each time the record is updated, multiple copies of the record itself are created and sent out to different devices around the world.
The major benefit that blockchain confers by working in this way is security. Imagine that the data in the ledger was all stored on a single server or in a single device. Any hacker who could access that device would then be able to alter the record—which would amount to theft. However, it is nearly impossible to hack records that use blockchain, because so many different copies of the real records exist. As such, it would be incredibly easy to identify a fraudulent entry in the ledger—all someone would have to do was compare the data against any of the existing copies.
How Can Blockchain Affect the Small Business World
The key phrase that small business owners must keep in mind when thinking about blockchain is “remote autonomous consensus”. Simply put, the ability to verify data from different independent devices can be useful for recording much more than just cryptocurrency transactions. Blockchain technology also has the potential to revolutionize small business by providing the following benefits:
- Protection of consumer data—keep financial information and medical records safe by updating them via blockchain.
- Safeguarding of KYC (Know Your Customer) protocols for anti-corruption and due diligence practices.
- The creation and use of smart contracts, which use blockchain to verify contracts of numerous kinds in a given business. Smart contracts can streamline payroll duties, as well as inventory and invoicing. As such, they allow small businesses to become much more scalable without the expense of purchasing a CRM.
Of course, it goes without saying that small businesses can also benefit by investing in cryptocurrency itself. Despite the volatility that accompanies such investments, they have the potential to deliver extremely high returns. The key is to invest carefully, and to use tools that allow you to change any cryptocurrency you purchase into dollars or other traditional currency quickly. Numerous digital wallets such as Uphold exist that can provide you with this ability.
Blockchain represents numerous opportunities for savvy small businesses to increase their odds of success. Choose your path, and use the information provided above to help you use this technology to your advantage.