Businesses are always looking for innovative ways to improve their service offerings, and one such method that is becoming increasingly popular is blockchain technology and cryptocurrencies as a whole. There are a huge number of cryptocurrencies on the market, with Bitcoin being the most popular, and others including Ethereum, Ripple and Litecoin, amongst a broad range of altcoins such as Golem, FunFair and more, all provoking an abundance of interest. With the Ethereum price beginning to appear more promising despite the downturn of the market in early 2018, more businesses are looking at how cryptocurrencies are likely to transform the way they operate.
Fast & Secure Transactions
The most important benefit to cryptocurrencies as a whole is the speed in which secure transactions can take place. The current banking system as we know it can take up to several days for a transaction to take place, and as a result, many people are left waiting to determine how much of their ‘current balance’ is actually available to spend. Small businesses and start-ups can often not afford for any transactions to take as long as this, and this is where blockchain is certain to have a very important role to play.
Blockchain works on a distributed ledger, and this ledger stores a data set which is made up of tens and thousands of nodes. The sheer capacity of this means that blockchain can transfer cryptocurrencies within a matter of seconds due to its immense computational power. In addition to this, transactions will remain even more secure, due to the fact that there is no single entity in complete control of how, where and when these transactions take place, ultimately protecting the blockchain from hacks. To make the process even more favourable for small businesses, transaction fees are also dramatically reduced, on both a national and international scale.
Transparent & Resilient Management
Blockchain offers more than just fast transactions to help impact businesses. The resilience of blockchain technology, coupled with its resilient manner means businesses can operate in a much more transparent manner helping to build trust between the business and its consumers. Existing business networks are notoriously vulnerable to hacks, human error and data manipulation, but blockchain can work to effectively eliminate this. Through the use of smart contracts stored directly within the blockchain, businesses are able to set up legally binding digital agreements to help streamline the entire process of business administration, further helping to reduce costs.
Reduction In Intermediaries
With blockchain working as a decentralised entity, the need for banks, law and real estate firms are reduced dramatically, meaning we are likely to see a huge number of intermediaries begin to lose business. Smaller businesses are able to capitalise on this, as they are able to cut out costly middle-men, while also helping to reduce overall mistakes. Higher operation speed and a huge reduction in costs is crucial in this particular area, and smart contracts are likely to be a key part of this.
The Reduction In Fiat Currencies
However, with the rise of blockchain comes the increase in popularity of cryptocurrencies, and the more businesses that begin to adopt these, the lesser the demand for regular fiat currencies will be. Fiat currencies are controlled by a single entity and as a result, governments are able to print unlimited amounts of money further helping to reduce its value over time. Cryptocurrencies on the other hand can allow businesses to accelerate the speed of transactions, while maintaining fully transparent and further improve a users’ privacy.
Currently, debit card and credit card transactions can be tracked and attached to an individual, helping to trace location and many other things. In addition to this, fraudulent activity can also occur and while there are systems in place aimed at preventing this, there are still a number of flaws. Cryptocurrencies on the other hand offer a pseudonymous way to transfer funds and purchase products or services, benefitting the user and also businesses as a result of the reduction in cost.
Access To The Unbanked
A huge proportion of the population around the world do not have access to a bank account, and as a result can find themselves cut off from a huge number of products and services. This is where blockchain and its attached cryptocurrency ecosystem can come in handy. As a decentralised entity, those without a bank account are able to purchase goods and services simply through their private and public keys, allowing them to make secure transactions across the globe, for minimal fees, quickly and transparently. This provides businesses with access to an abundance of individuals in their market, which have previously remained untapped.
Blockchain technology and the cryptocurrencies attached to this can have a huge number of advantages for businesses. With minimal fees, fast transactions, and access to a potential new demographic of customers, we’re likely to see more and more businesses begin to adopt this technology.